The Cabinet approved Semicon 2.0 with an outlay of Rs 1,275 billion (bn) and authorised a mobile phone manufacturing scheme backed by Rs 625 billion (bn). Union minister Ashwini Vaishnaw said the mission builds on the earlier programme and aims to provide long-term policy support for chip design and manufacturing. The plan is structured on six pillars to deepen the domestic ecosystem.

He said the first pillar will strengthen chip design, including support for intellectual property and system design after more than 100 start-ups entered the segment under the first phase. The second pillar offers incentives for firms making semiconductor equipment, materials and gases, while the third and fourth aim to attract fabrication plants and to expand assembly, testing and packaging through advanced technologies. The remaining pillars cover research and development on advanced process nodes and talent development.

The government noted that the first phase approved 12 manufacturing units with cumulative investments of Rs 1,640 billion (bn), including one silicon fabrication plant, one silicon carbide fab, one integrated gallium nitride micro LED display fab and nine packaging units. Three companies have begun commercial production and another is expected to start in 2026. Support was approved for 24 semiconductor design projects and 105 start-ups and MSMEs have been given access to industry-standard electronic design automation tools.

The mobile scheme will run for five years from FY27 to FY31 and will provide incentives ranging from two point two five per cent to five per cent on eligible sales, with an extra incentive of up to one point five per cent for manufacturers sourcing key components locally and a further three per cent for Indian brands investing in product design and research and development. The government expects the scheme to support cumulative mobile phone production of Rs 39,000 billion (bn) and to generate 60,000 direct jobs. The programme aims to deepen value addition and improve global competitiveness, noting that India is the world's second-largest mobile phone manufacturer by volume, with 99.2 per cent of mobile phones used domestically being manufactured locally.