India has launched the second phase of the India Semiconductor Mission (ISM 2.0) to accelerate the nation's chip manufacturing capabilities.
The initiative marks a strategic shift for the country as it attempts to move beyond basic fabrication. By targeting the entire supply chain, India aims to reduce its reliance on foreign technology and establish itself as a global hub for semiconductor intellectual property.
IT Minister Ashwini Vaishnaw said the program is designed to reposition the country as a leader in design and equipment. The Union Cabinet approved the mission on July 15, 2026, with a total outlay of ₹1.27 trillion [1, 2].
Vaishnaw said the mission now emphasizes design, equipment, and IP rather than just fabs [3]. This shift targets the high-value segments of the semiconductor lifecycle, which include the creation of blueprints and the specialized machinery required for production.
The government is leveraging existing momentum to attract further private capital. Vaishnaw said India now has 12 semiconductor units with about $20 billion investment [4]. These units serve as the foundation for the next phase of growth.
According to the minister, the goal is to attract roughly $20 billion in private investment to further scale the ecosystem [5]. The strategy involves creating a comprehensive environment where design houses and equipment manufacturers can operate alongside fabrication plants.
Vaishnaw said the country is moving into the next phase of the semiconductor mission with 12 units already on board [6]. The program intends to integrate these units into a broader network of intellectual property and technical expertise.
“The mission now emphasizes design, equipment, and IP rather than just fabs.”
The transition from ISM 1.0 to 2.0 indicates that India recognizes that owning factories (fabs) is insufficient for true technological sovereignty. By investing heavily in intellectual property and equipment design, the government is attempting to capture the most profitable and innovative parts of the semiconductor value chain, moving the country from a consumer of chip technology to a primary architect of it.
