The Government of India is set to take its semiconductor mission to the next level. A massive package has been proposed under India Semiconductor Mission 2.0, which aims to rapidly strengthen the country’s semiconductor ecosystem. This initiative marks a significant step toward making India self-reliant and positioning it as a global semiconductor hub.
Let’s break down the latest developments in the Indian semiconductor industry and explore whether India can successfully manufacture indigenous chips.
What’s Happening?
The India Semiconductor Mission has laid a strong foundation for the country’s journey toward electronics and technological self-reliance. Launched in 2021 with an initial outlay of Rs 76,000 crore, the mission has shown notable progress within just a few years. Between 2023 and 2025, 10 major projects across six states were approved, attracting investments worth nearly Rs 1.60 lakh crore.
At the Global Investors Summit 2025, it was announced that India’s first indigenous semiconductor chip will be ready for production this year. Currently, five production units are under construction, an achievement considered crucial in strengthening domestic capabilities.
India Semiconductor Mission 2.0 is now poised to take this journey into its next phase, focusing not only on chip production but also on building a globally competitive ecosystem.
ISM 2.0: Building an Ecosystem for Chip Manufacturing
The government’s focus is now on the second phase of the mission’ ISM 2.0’, which has an even bigger target. A new package worth $20 billion has been prepared and is expected to be approved by the end of 2025. The aim of ISM 2.0 is not just chip production but also the development of the entire semiconductor ecosystem in India. This includes setting up the country’s first display fabrication unit.
The proposal is expected to receive approval from the Finance Ministry by October, after which it will be presented before the Union Cabinet by the end of 2025. Under ISM 2.0, the government plans to allocate Rs 5,000 crore for Design-Linked Incentives (DLI), more than three times the Rs 1,500 crore allocated in the first phase.
Progress and Approved Projects
India’s semiconductor ecosystem is expanding rapidly. Between June 2023 and August 2025, several major projects received approval. Micron Technology launched an ATMP facility in Gujarat with an investment of Rs 22,516 crore. Tata Electronics set up a unit in Dholera with an investment of Rs 91,000 crore, with a capacity of 50,000 wafers per month. Meanwhile, Tata’s project in Morigaon, Assam, worth Rs 27,000 crore, will produce 48 million chips per day.
Alongside these, CG Power, Kaynes Semicon, and the HCL-Foxconn JV have also received approvals. Recently, the Union Cabinet chaired by Prime Minister Narendra Modi cleared four additional projects — SiCSem, CDIL, 3D Glass Solutions, and ASIP Technologies — worth a total investment of Rs 4,600 crore.
On September 2, 2025, Union IT Minister Ashwini Vaishnaw also presented India’s first indigenous microprocessor, ‘Vikram 3201’, to PM Modi. It has been developed by ISRO’s Semiconductor Laboratory.
What’s in it for Investors?
The proposed $20 billion investment under India Semiconductor Mission 2.0 offers an attractive opportunity for Indian stock market investors. This mission could directly impact listed companies in the semiconductor space.
With the government tripling the budget for the DLI scheme to Rs 5,000 crore, start-ups and chip design firms may witness significant growth, potentially leading to higher returns for investors. Small and mid-cap electronics manufacturing vendors, along with other allied sectors, could also benefit from this wave of sectoral growth.
What’s Next?
India’s semiconductor market, valued at $38 billion in 2023, is projected to grow to $100–110 billion by 2030. Amid this rapid expansion, the launch of India’s first indigenous chip in 2025 will mark a historic step toward self-reliance.
India’s semiconductor market is expected to double between 2024–25 and 2030.
Along with this growth, the country is moving beyond traditional silicon chips to explore new materials like silicon carbide. Advanced centres for 3-nanometre chip design have already been established in Noida and Bengaluru. At the same time, progress is being made in 3D glass packaging technology for defence, missile, and rocket applications.
*The companies mentioned in the article are for information purposes only. This is not investment advice.
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