Union Defence Minister Rajnath Singh on Wednesday, 15 July 2026 welcomed the Union Cabinet's approval of Semicon 2.0, a landmark semiconductor policy package carrying an outlay of ₹1,27,500 crore, describing it as a transformative step toward making India a globally competitive chip-manufacturing hub.

Context

Rajnath Singh posted on X that the Union Cabinet, chaired by Prime Minister Narendra Modi, had approved Semicon 2.0, calling it 'a landmark decision that reaffirms India's long-term commitment to building a globally competitive semiconductor ecosystem.' He expressed gratitude to PM Modi for 'his unwavering commitment to making India a global technology powerhouse.'

The announcement marks a significant scaling-up of India's semiconductor ambitions. The minister highlighted that the initiative would strengthen 'chip design, advanced manufacturing, R&D, talent development and the entire semiconductor value chain,' while creating high-value jobs and enhancing technological self-reliance.

Policy Backdrop

The approval builds on a policy lineage that began in December 2021, when the Union Cabinet first approved the Semicon India programme with an outlay of ₹76,000 crore under the India Semiconductor Mission (ISM), administered by the Ministry of Electronics and Information Technology (MeitY). That programme sought to attract semiconductor fabrication, display, and assembly units to India through a combination of fiscal incentives and technology partnerships.

Semicon 2.0's outlay of ₹1,27,500 crore represents a substantial increase — roughly 68 per cent higher than the original programme — signalling the government's intent to move from policy foundation to industrial scale. India has pursued electronics and chip incentives since 2020 to reduce dependence on concentrated East Asian supply chains, a strategic priority amplified by global chip shortages that disrupted automotive, consumer electronics, and defence sectors.

The initiative also sits within the broader Atmanirbhar Bharat framework and complements international technology dialogues such as the initiative on Critical and Emerging Technology (iCET), through which India has sought chip-related cooperation with partner nations.

Stakeholders and Impact

The semiconductor value chain spans a wide range of actors. Domestic and foreign chip design firms, advanced manufacturing units, and assembly, testing, marking and packaging (ATMP) facilities are among the primary beneficiaries of fiscal support under such programmes. Engineering graduates and research institutions stand to gain from the talent-development pillar that Rajnath Singh specifically highlighted.

For the defence sector — which falls directly under Rajnath Singh's portfolio — semiconductor self-sufficiency carries strategic weight. Indigenously sourced chips reduce vulnerability in defence electronics, radar systems, and communication platforms, aligning Semicon 2.0 with the government's broader push for defence indigenisation. India's stated goal of positioning itself as a 'trusted global semiconductor hub' also targets supply-chain partnerships with allied nations seeking to diversify away from geopolitically sensitive sources.

What's Next

Detailed scheme guidelines from MeitY and the India Semiconductor Mission are expected to follow the Cabinet approval, outlining eligibility criteria, incentive structures, and timelines for project applications. Subsequent project-level approvals by the ISM will be the first concrete test of how quickly the expanded outlay translates into on-ground investment commitments.

Any supplementary budget provisions in the next fiscal year and the pace of international technology partnerships will be closely watched as indicators of whether India can convert this policy ambition into a functioning domestic semiconductor industry within the decade.