Govt widens scope of Semicon Mission 2.0, doubles ECMS outlay to Rs 40,000 cr
New Delhi: The government has announced the next edition of India Semiconductor Mission with a broad objective to promote chip manufacturing ecosystem, covering equipment, materials, indigenous designs and other components that are required to produce the high-tech components.
Finance Minister Nirmala Sitharaman on Sunday, without announcing the outlay for the scheme, proposed that the India Semiconductor Mission 2.0 will also focus on industry-led research and training centres to develop technology and skilled workforce. "India Semiconductor Mission (ISM) 1.0 expanded India's semiconductor sector capabilities. Building on this, we will launch ISM 2.0 to produce equipment and materials, design fullstack Indian IP, and fortify supply chains," she said. Buoyed by the response to the electronics component manufacturing scheme (ECMS), Sitharaman almost doubled the outlay for it. "The Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of Rs 22,919 crore, already has investment commitments at double the target. We propose to increase the outlay to Rs 40,000 crore to capitalise on the momentum," Sitharaman said. The Ministry of Electronics and IT has received 46 applications by January, totalling an investment proposal of Rs 54,567 crore and promising to generate direct employment for about 51,000 people. The scheme has seen participation from Samsung, Tata Electronics, Dixon, Foxconn's Yuzhan Technology, ATLbattery, Motherson Electronic, Kaynes, Amber Electronics, etc.
The budget has made an attempt to reduce dependency on imports including access to high-level experts for electronics manufacturing. The move follows the impact of the recent geopolitical situation that threatened the local production of electronic products. Sitharaman proposed a five-year income tax exemption for any non-resident who provides capital goods, equipment, or tooling to a toll manufacturer in a bonded zone.
"To encourage a vast pool of global talent to work in India for a longer period of time, I propose to provide exemption to global (non-India sourced) income of a non-resident expert, for a stay period of 5 years under notified schemes," she said. Mobile manufacturers industry body India Cellular and Electronics Association (ICEA) said that measures such as the five-year income tax exemption for foreign suppliers of capital equipment in bonded zones, the safe harbour framework for non-resident component warehousing, customs decriminalisation, and extended validity of advance rulings are expected to improve ease of doing business, reduce compliance friction, and strengthen investor confidence.
