Semicon 2.0: India Sees Rs 1 Lakh Crore Semiconductor Investment Interest, Says Ashwini Vaishnaw
Under Semicon 2.0, the government is targeting at least 200 startups and companies involved in chip design.
India is seeing semiconductor investment interest of around ₹1 lakh crore ($11–12 billion) under the second phase of its semiconductor programme, Semicon 2.0, Union Electronics and IT Minister Ashwini Vaishnaw said at SEMICON India 2026 in New Delhi.
The figure represents proposed investments and ongoing discussions with companies rather than fully committed projects. Vaishnaw said some companies involved in the discussions have not yet made their plans public and that the proposed investments could be deployed over the next two to three years. The interest covers semiconductor equipment, materials, gases, chemicals, substrates, fabrication and advanced packaging.
The announcement comes as global semiconductor companies expand their India plans. Applied Materials announced a $5 billion investment over the next decade under its India Vision 2035, covering research and development, supply-chain expansion and talent development. Lam Research separately announced plans to invest around ₹10,000 crore in India to establish its first silicon-component manufacturing facility and expand its R&D operations.
Under Semicon 2.0, the government is targeting at least 200 startups and companies involved in chip design. The programme also aims to develop one lakh technicians and other industry-ready professionals for the semiconductor sector. This expands the focus beyond chip designers to include clean-room, manufacturing and factory-floor skills.
The Union Cabinet approved Semicon 2.0 in July 2026 with a total outlay of ₹1,27,500 crore. The programme is structured around six pillars: chip design; semiconductor machines and materials; fabrication; advanced packaging; research and development; and talent development.
The programme was subsequently notified with detailed financial support mechanisms for different parts of the semiconductor value chain. Eligible semiconductor startups and MSMEs under the commercial chip-design programme can receive milestone-linked seed funding of 50% of project cost or up to ₹15 crore, whichever is lower. Companies that already have venture capital or private equity backing can also access equity co-investment support under the scheme.
The policy also provides deployment-linked incentives for eligible newly launched semiconductor intellectual property, chips and system-on-chip products. Eligible products can receive a 9% reimbursement on net sales for five years, subject to prescribed limits.
For manufacturing, eligible CMOS-based silicon wafer fabs can receive fiscal support of up to 40% of eligible capital expenditure. Other categories, including compound semiconductor, photonics, sensor and discrete semiconductor fabs, have different support levels. Advanced semiconductor packaging projects, including 2.5D and 3D packaging and heterogeneous integration, are also covered.
Semicon 2.0 builds on the first phase of the India Semiconductor Mission, which was launched with an outlay of ₹76,000 crore. The government has so far approved 12 semiconductor manufacturing projects involving more than ₹1.64 lakh crore in cumulative investment. According to the latest government update, five semiconductor units have commenced commercial production.
The first phase also supported chip design. Vaishnaw said more than 105 startups participated in chip-design activities, with around 20 securing venture capital funding totalling approximately ₹800 crore. Separately, government data shows that 24 semiconductor design projects from startups and MSMEs have been approved for financial support, while 105 startups and MSMEs have received access to industry-standard electronic design automation tools.
India’s first large-scale semiconductor fabrication facility is currently scheduled to be commissioned in 2028, while the government is also expanding advanced packaging capacity. The latest government update says three companies Micron, Kaynes Semicon and CG Semi have already started commercial production, with further facilities moving toward production.
SEMICON India 2026 has also brought new supply-chain partnerships. Tata Electronics is set to sign 16 MoUs with domestic and international companies as it expands its semiconductor ecosystem. The event is bringing together more than 600 companies from 52 countries, according to Reuters.
The scale of the investment interest comes against a rapidly expanding domestic market. The government estimates that India’s semiconductor demand could reach $110 billion by FY2030 and more than $200 billion by FY2035. India spent nearly $150 billion on semiconductor product imports between FY2017 and FY2025, with imports growing at a 23% CAGR during the period.