Govt bets big on mobiles, chips with Rs 1.9 lakh crore
The Union Cabinet has approved two major manufacturing initiatives with a combined outlay of nearly Rs 1.9 lakh crore ($22 billion) to expand India’s semiconductor ecosystem, scale up mobile phone production and strengthen its position as a global electronics manufacturing hub.
The Government on Wednesday approved the Rs 1.27 lakh crore Semicon 2.0 programme to accelerate semiconductor design and manufacturing capabilities, alongside the Rs 62,500 crore Mobile Phone Manufacturing Scheme (MPMS) aimed at increasing domestic production, boosting exports and deepening local value addition in the mobile phone industry.
The semiconductor programme builds on the first phase of the India Semiconductor Mission and will focus on six key areas — chip design, semiconductor equipment and materials, fabrication facilities, advanced packaging and testing, research and development, and talent development.
“We will be self-reliant in the production of indigenous chips by the end of this programme,” Minister for Electronics and Information Technology Ashwini Vaishnaw said at a news briefing.
Semicon 2.0 aims to encourage the development of semiconductor intellectual property, commercial and strategic chip designs, and manufacturing capabilities for critical components required across sectors. The programme will provide support to companies involved in semiconductor machinery, materials, chemicals and gases while seeking to attract additional fabrication plants to India.
The programme also seeks to expand Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) capabilities, while advancing research into more sophisticated chip technologies. India’s semiconductor push has already resulted in approvals for 12 manufacturing projects with a combined investment of more than Rs 1.64 lakh crore. These include a silicon fabrication plant, a silicon carbide facility, an integrated gallium nitride micro-LED display unit and nine packaging facilities, catering to sectors such as automobiles, telecommunications, consumer electronics, aerospace and industrial equipment.
Three approved projects by Micron, Kaynes and CG Semi have begun commercial production, while another facility is expected to start operations in 2026. The first phase has also supported 24 semiconductor design projects by startups and MSMEs, with 105 companies receiving access to industry-standard Electronic Design Automation tools.
The Mobile Phone Manufacturing Scheme will provide production-linked incentives to manufacturers over five years from fiscal year 2026-27 to 2030-31, Vaishnaw said. Incentives will range from 2.25 per cent to 5 per cent on eligible mobile phone sales, with additional support for domestic sourcing of key components and for Indian companies investing in product design and research.
The Government expects the mobile phone scheme to drive cumulative production of around Rs 39 lakh crore during its tenure, significantly increase exports and generate about 60,000 direct jobs.
India has emerged as the world’s second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones used domestically now manufactured within the country. Mobile phones became India’s largest exported product category in 2025, overtaking traditional export segments such as diesel fuel and cut diamonds.
