Electronics components manufacturing gets Rs 40,000 crore push in Budget 2026
01 Feb 2026, 03:03 PMIndia Semiconductor Mission 2.0 announced to focus on equipment and materials manufacturing and design full-stack Indian IP.
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Finance Minister Nirmala Sitharaman announced the India Semiconductor Mission 2.0 to "capitalise on the momentum of the semiconductor mission."
The Budget proposed a significant increase in funding for electronics manufacturing. The Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of Rs 22,919 crore, has received investment commitments that are already double the original target, according to the government.
To capitalise on this response from industry, the Finance Minister proposed increasing the scheme's outlay to Rs 40,000 crore.
The union minister said the ISM 2.0 will be launched to produce equipment and materials, design full-stack Indian IP, and fortify supply chains with focus on industry led research and training centres to develop technology and skilled workforce.
Ajay Jain, founder and managing partner at venture capital firm Silverneedle Ventures, noted that with renewed focus on strategic sectors like semiconductors, one thing the Budget makes it very clear is that scale matters.
"For AI-first and deep-tech startups, it’s fertile ground to build in India and scale globally. For investors, the signal is simple: back teams that can convert demand into durable, scalable businesses. Policy has set the tone; the ecosystem must now deliver," added Jain.
The Union Budget 2026 is Sitharaman's ninth consecutive Budget, bringing her closer to former Prime Minister Morarji Desai's record of presenting 10 Union Budgets.
Union Electronics and Information Technology Minister Ashwini Vaishnaw had earlier this month said the first commercial semiconductor chip production will begin in 2026, with "four plants expected to commence operations this year."
The pilot production has already started in three plants in 2025.
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