India’s Union Cabinet approved a second semiconductor mission with an outlay of ₹1.27 lakh crore ($13.3 billion) and a separate ₹62,500 crore mobile phone manufacturing scheme, marking a sharp escalation in state support for electronics production. The semiconductor programme, Semicon 2.0, is expected to catalyse investments of around ₹4 lakh crore and generate chip production worth ₹2 lakh crore during the scheme period. The mobile scheme targets cumulative output of ₹39 lakh crore over five years, with the government projecting 60,000 direct jobs.

The semiconductor initiative covers the entire value chain, from chip design and fabrication to raw materials including minerals and gases. It is structured around six pillars, the first being indigenous chip design, and the government states it aims for self-reliance in domestic chip production by the programme’s end. The predecessor scheme, with a ₹76,000 crore allocation, approved 12 projects drawing ₹1.64 lakh crore in investments, including a Micron Technology assembly and test facility. The expansion arrives as global memory chip shortages persist and demand from artificial intelligence applications accelerates.

The parallel mobile phone manufacturing scheme offers production-linked incentives of 2.25% to 5% on eligible sales, an additional up to 1.5% for domestic sourcing of key components, and a further 3% for Indian brands investing in design and research and development. The policy seeks to build Indian brands, capture greater economic value, and strengthen supply chain resilience. India has become the world’s second-largest mobile phone manufacturer by volume, with 99.2% of devices sold domestically now made locally, and mobile phones surpassed traditional exports to become the country’s top export category in 2025.

Viewed from New Delhi, the twin approvals form part of a broader push to localise manufacturing against the backdrop of the West Asian crisis and persistent global supply chain disruptions. The cabinet also cleared highway projects worth ₹25,400 crore, but the electronics packages dominate the industrial policy agenda. The mobile scheme will run from fiscal year 2026-27 to 2030-31. For semiconductors, the government has yet to release detailed guidelines on fund utilisation; the next factual milestone is the publication of those operational rules and the first project approvals under Semicon 2.0.