Cabinet approvals for Semicon 2.0 and the Mobile Phone Manufacturing Scheme (MPMS) signal a strategic pivot from assembly-led growth toward building a full semiconductor value chain in India, with industry bodies projecting the two schemes could collectively create over 3.6 lakh jobs. The announcements, welcomed by leading electronics and semiconductor associations, are being described as among the most consequential industrial policy moves of the decade.

What the Two Schemes Commit

Semicon 2.0 carries a committed outlay of ₹1,27,500 crore, while the MPMS is backed by ₹62,500 crore. Together, they aim to move India decisively beyond the role of a low-cost assembly destination. According to industry bodies, Semicon 2.0 alone could attract $40–50 billion in fresh investment and generate 2–3 lakh high-skilled jobs. The MPMS, meanwhile, is projected to nearly double cumulative mobile phone production to approximately ₹39 lakh crore and cumulative exports to around ₹15 lakh crore, while adding 60,000 direct jobs.

Semiconductor Industry Response

The India Electronics and Semiconductor Association (IESA) noted that Phase 1 of India's semiconductor push had already helped secure more than $20 billion in announced semiconductor projects. Phase 2, the association said, places greater emphasis on fabs, advanced packaging, design, research and development, talent development, and equipment and materials — areas considered essential for long-term competitiveness.

'With several OSAT projects already under implementation and entering production, Phase 2 rightly places greater emphasis on semiconductor fabs, while continuing strong support for advanced packaging, thereby creating a balanced and future-ready semiconductor ecosystem,' IESA said in a statement.

Ashok Chandak, President of IESA and SEMI India, said: 'SEMICON 2.0 marks a decisive step in India's journey from policy intent to execution at scale. Phase 1 established India's credibility and phase 2 will build long-term capability.' Chandak also pointed to worldwide semiconductor manufacturing equipment spending expected to reach nearly $230 billion by 2028, positioning India to capture a share of that wave.

Mobile Manufacturing: From Assembly Hub to Innovation Base

Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), welcomed the policy continuity, saying ISM 2.0's focus on design, R&D, capital goods, and skills will help India become a 'skill capital' for the global semiconductor industry. 'ISM 2.0 can bring together manufacturing, supply chain, innovation and human capital to build a globally competitive semiconductor ecosystem,' he said.

Ashok Gupta, Chairman of Optiemus Electronics Limited (OEL), called the MPMS 'a landmark policy intervention' that will build on the success of the Production-Linked Incentive (PLI) programme. 'The approval of the Mobile Phone Manufacturing Scheme (MPMS) is a landmark policy intervention that will build on the success of the PLI programme and accelerate India's transition from a mobile assembly hub to a globally competitive manufacturing and innovation powerhouse,' Gupta said. He added that the scheme provides long-term policy certainty for fresh investments and fosters indigenous technology development.

Broader Context and What Comes Next

This comes amid intensifying global competition for semiconductor supply chain dominance, with the United States, the European Union, Japan, and South Korea all deploying large-scale incentive programmes. India's Phase 1 semiconductor initiative drew criticism for slow execution, but the commissioning of early OSAT facilities has lent Phase 2 credibility it otherwise might not have enjoyed. Notably, the combined outlay of nearly ₹1.9 lakh crore across both schemes represents one of the largest technology manufacturing commitments in India's post-liberalisation history. Sectoral guidelines and disbursement timelines are awaited, and industry observers will watch closely whether execution matches the ambition of the headline numbers.