ISM 2.0 to act as a semiconductor push for future: IESA

Ashok Chandak, President, IESA, presented his views on the Union Budget 2026-2027 today. 

He said the Union Budget announced today represents a strong continuation of the momentum built under India Semiconductor Mission (ISM), ECMS, PLI, DLI, C2S and other ESDM initiatives over the past year. India has demonstrably transitioned from aspiration to credibility, establishing itself as a credible and investible destination for electronics and semiconductor manufacturing. The budget offers strong policy continuity and support as the ecosystem enters a crucial phase of execution and scaling.

Announcement of ISM 2.0 as a semiconductor push
The Finance Minister’s statement on ISM 2.0 is a very important signal for India’s semiconductor ambitions. It marks a clear evolution from a fab-centric approach to a full value-chain strategy, covering equipment, materials, Indian IP, and supply-chain resilience ( chemicals, gases, materials, etc.). This is critical if India is to move from being a participant to a structural player in the global semiconductor ecosystem.

For India, this means the ambition is no longer limited to manufacturing chips, but to own capabilities across design, tools, materials, and upstream inputs—areas that define long-term competitiveness and strategic autonomy. The quantum of funds for ISM 2.0 have to be clarified. 

Electronics
The significant enhancement of the Electronic Component Manufacturing Scheme to ₹40,000 crore as this scheme has received strong response. The mention of value addition, customs simplifications, SEZ made DTA support, focused support for MSMEs, capital goods, ease of doing business, and reforms-led manufacturing growth provide strong continuity and confidence to the electronics industry. 

The expanded focus beyond fabs—covering semiconductor equipment, materials, chemicals, design tools, R&D and trainings, and supply-chain resilience—will help reduce import dependence and strengthen domestic capabilities and build end to end ecosystem for sustainable future.

Equally important is the emphasis on Technology Adoptions through industry-led research and training, job creation, and strategic initiatives focus such as AI Mission, Quantum Mission, and RDI funding. 

Taken together, these measures will consolidate recent gains, accelerate execution of approved projects, deepen domestic value addition, and further establish India as a globally competitive and trusted hub for electronics and semiconductor manufacturing—while laying a strong foundation to meet a significant share of domestic semiconductor demand through local design and manufacturing in the years ahead.

The semiconductor and electronics sector support mentioned in Union Budget is a direct result of MeitY’s sustained and applied efforts in working closely with industry to move from vision to execution. IESA applauds Meity officials for this achievement and enablement of the Semiconductor and Electronics sector growth.