Budget 2026: Nirmala Sitharaman unveils Semiconductor Mission 2.0, widens chip push to equipment, materials and IP

On February 1, Finance Minister Nirmala Sitharaman announced a transformative initiative aimed at bolstering India's semiconductor industry. During her presentation of the 2026 budget to the Lok Sabha, she introduced the India Semiconductor Mission 2.0, which marks a significant expansion of the country’s efforts beyond mere chip fabrication. This new approach focuses on enhancing the entire semiconductor ecosystem by prioritizing the domestic production of essential equipment and materials, as well as promoting the design of indigenous intellectual property. Sitharaman emphasized that this revamped program is crucial for strengthening the supply chains within the semiconductor sector. As global companies increasingly seek to diversify their chip supply chains in response to geopolitical challenges and the surging demand driven by advancements in artificial intelligence and computing, India aims to position itself as a viable alternative manufacturing hub. Additionally, the government has raised the allocation for the Electronics Component Manufacturing Scheme to Rs 40,000 crore, highlighting its commitment to not only expand the production of finished electronics but also enhance component-level manufacturing.