Union Coal and Mines Minister G. Kishan Reddy on Wednesday, 15 July 2026, welcomed the Union Cabinet's approval of Semicon 2.0, a flagship semiconductor initiative carrying a total budget outlay of ₹1,27,500 crore, describing it as a 'transformative step towards building a robust, self-reliant semiconductor ecosystem in India.'

Context

The cabinet meeting was chaired by Prime Minister Narendra Modi. In his post on X, Kishan Reddy outlined that Semicon 2.0 encompasses chip design, semiconductor manufacturing, machines and materials, advanced ATMP (Assembly, Testing, Marking, and Packaging), OSAT (Outsourced Semiconductor Assembly and Test) facilities, Research and Development, and talent development. The minister said the programme will 'strengthen India's technological capabilities, enhance supply chain resilience, generate high-value employment, and position India as a global semiconductor hub.'

The announcement builds directly on the India Semiconductor Mission, a central government programme established to develop domestic chip design, fabrication, and packaging capabilities since its inception.

Policy Backdrop

India's semiconductor push has a clear policy lineage. In December 2021, the Union Cabinet approved the original Semicon India programme with an outlay of ₹76,000 crore, aimed at attracting semiconductor manufacturing and assembly projects to the country. Semicon 2.0, at ₹1,27,500 crore, represents a significant scaling-up of that ambition — an increase of over ₹51,500 crore from the original programme.

Since 2021, successive policy iterations have combined fiscal support for fabrication units, design-linked incentives, and skill development programmes. The broader objective has been to position India as an alternative semiconductor manufacturing base alongside established hubs in East and Southeast Asia, reducing the country's dependence on chip imports.

Stakeholders and Impact

The scheme is expected to benefit a wide range of stakeholders — from global and domestic semiconductor firms and electronics manufacturers to the engineering and technical workforce seeking high-value employment. The inclusion of ATMP and OSAT facilities is particularly significant, as these segments represent the assembly and testing end of the semiconductor value chain that India has targeted as an early entry point.

Kishan Reddy framed the initiative within the government's twin strategic goals of Aatmanirbhar Bharat (self-reliant India) and Viksit Bharat (developed India), signalling that semiconductor manufacturing is viewed as a cornerstone of India's industrial and technological ambition through the decade.

What's Next

The immediate focus will shift to the announcement of specific investment proposals and ground-breaking ceremonies for new fabrication or ATMP units approved under the expanded outlay. Industry observers will watch for the pace at which domestic and foreign semiconductor firms submit proposals and the timelines set for operationalising new facilities under Semicon 2.0.

With ₹1,27,500 crore now committed, the government's ability to attract anchor investors — particularly global chip giants evaluating India as a manufacturing destination — will be the defining measure of whether the programme delivers on its ambition of making India a credible node in the global semiconductor supply chain.