Continuing her Union Budget 2026–27 speech, Union Finance Minister Nirmala Sitharaman announced the launch of India Semiconductor Mission (ISM) 2.0, marking a major step towards strengthening domestic manufacturing, technology ownership and resilient supply chains.
She said the next phase of ISM will focus on producing critical equipment and materials, designing full-stack solutions and building Indian intellectual property, while reducing vulnerabilities in global supply chains.
ISM 2.0 to deepen semiconductor ecosystem
The Finance Minister said ISM 2.0 will move beyond fabrication to cover the entire semiconductor value chain. This includes equipment manufacturing, materials development and full-stack design capabilities rooted in Indian IP.
By doing so, the government aims to reduce dependence on imports and ensure that India plays a larger role in the global semiconductor ecosystem, which is increasingly vital for electronics, defence, automotive and clean energy sectors.
Focus on resilient supply chains
Sitharaman stressed that fortifying supply chains is critical amid global disruptions and geopolitical uncertainties. ISM 2.0, she said, will help create a more secure and predictable ecosystem for manufacturers operating in India, encouraging long-term investment and innovation.
Experts believe this approach will make India a more reliable destination for global firms looking to diversify supply chains.
Industry-led research and skill development
The Finance Minister also announced a strong focus on industry-led research and training centres under ISM 2.0. These centres will aim to bridge the gap between academia and industry, ensuring that technology development aligns with real-world manufacturing needs.
She said the initiative will prioritise building a highly skilled workforce capable of supporting advanced manufacturing and design. Training programmes will focus on emerging technologies, helping young professionals and engineers gain industry-relevant skills.
Analysts say ISM 2.0 reflects policy continuity with a sharper emphasis on innovation, skills and self-reliance. If implemented effectively, it could significantly boost India’s position in high-value manufacturing while creating quality employment opportunities across regions.