In a landmark move to bolster self-reliance, the Union Cabinet on Wednesday has approved Semicon 2.0 and a new Mobile Phone Manufacturing Scheme, positioning India as a global electronics and semiconductor powerhouse.
India’s Union Cabinet, on Wednesday, approved the India Semiconductor Mission (ISM) 2.0 with a substantial outlay and the Mobile Phone Manufacturing Scheme (MPMS). These initiatives build on the foundation of previous policies, aiming to deepen domestic manufacturing capabilities, create high-skilled jobs, and reduce reliance on imports in critical sectors.
Building on Semicon 1.0 Success
India Semiconductor Mission 2.0 represents a significant escalation in the government’s long-term strategy for semiconductor self-reliance. Following the success of the first phase, which had an outlay of around ₹76,000 crore and attracted investments leading to multiple approved units across states, Semicon 2.0 comes with an enhanced financial commitment of approximately ₹1.27 lakh crore.
The mission focuses on the full semiconductor value chain, including design, fabrication, assembly, testing, packaging (ATMP/OSAT), raw materials, chemicals, gases, and equipment manufacturing. It emphasises indigenous intellectual property development, talent building through industry-led research and training centres, and fostering resilient global supply chains.
Recent milestones under the broader ISM include approvals for projects like Crystal Matrix Limited’s integrated compound semiconductor fab and ATMP facility in Dholera, Gujarat, and Suchi Semicon’s OSAT unit in Surat. These and other units are expected to generate substantial employment and position India in niche areas such as compound semiconductors, Mini/Micro-LED displays using GaN technology, and advanced packaging.
MPMS: Strengthening Mobile Manufacturing Ecosystem
Complementing Semicon 2.0, the Cabinet has approved the Mobile Phone Manufacturing Scheme (MPMS) with an outlay of around ₹62,500 crore. This scheme succeeds or extends the highly successful Production Linked Incentive (PLI) schemes for mobile phones, which transformed India into the world’s second-largest mobile manufacturer.
The MPMS aims to incentivise large-scale production, component manufacturing, and exports while encouraging deeper value addition. It targets sustaining momentum from previous PLI programs, where companies like Apple and Samsung significantly expanded operations in India. The focus will be on attracting further investments, boosting exports, and integrating with the semiconductor ecosystem for greater localisation of components.
Strategic Importance in Global Context
These approvals come at a pivotal time as global semiconductor supply chains face geopolitical tensions, rising demand for chips in AI, automotive, telecommunications, and consumer electronics. India’s strategy aligns with “China+1” diversification by multinational companies seeking stable, alternative manufacturing bases.
Electronics manufacturing in India has already seen remarkable growth. The sector is on track toward ambitious targets, with previous schemes like the Electronics Component Manufacturing Scheme (ECMS) attracting significant investments and job creation. Semicon 2.0 and MPMS are expected to accelerate this trajectory, potentially pushing electronics production and exports to new heights.
Economic Impact and Job Creation
Experts anticipate that these initiatives will catalyse investments exceeding previous benchmarks, create tens of thousands of direct high-skilled jobs, and support indirect employment in the supply chain. Talent development is a core pillar, with plans for specialised training programmes to address the skilled workforce needs of a modern semiconductor industry.
States like Gujarat, already hosting new projects, along with others such as Rajasthan and others with approved units, are poised to benefit immensely. The policy signals long-term government commitment, providing policy certainty to investors.
Challenges and Road Ahead
While the announcements mark a strong policy push, challenges remain, including high capital costs for fabs, technology access, water and power infrastructure requirements, and global competition. Successful implementation will require seamless coordination between central and state governments, robust R&D ecosystems, and continued engagement with global players.
