India's semiconductor ambitions have moved decisively from policy aspiration to industrial reality. The Department of Expenditure has finalised a ₹7,100 crore fiscal-support package for FY 2026-27 specifically designed to supercharge the domestic chip ecosystem — covering one major fabrication unit, nine specialised semiconductor facilities, and a substantial expansion of the Design Linked Incentive scheme that backs Indian semiconductor design firms. The package is calibrated to crowd in approximately ₹15,000 crore in fresh private investment, generate over 4,500 direct jobs across manufacturing and design, and establish India's first set of indigenous semiconductor intellectual property cores — building substantially on the foundation laid under the original India Semiconductor Mission of 2021 and the newly-launched India Semiconductor Mission 2.0 announced in the Union Budget 2026-27.

The package arrives at a moment when India's semiconductor ecosystem has, by any measure, reached its inflection point. Ten major semiconductor projects with a combined committed investment of ₹1.60 lakh crore have been approved under ISM 1.0 since December 2021. Commercial production is already underway at Micron Technology's Assembly, Test and Packaging (ATMP) facility at Sanand in Gujarat, inaugurated by Prime Minister Narendra Modi in February 2026; at Kaynes Semicon's plant also at Sanand, inaugurated in March 2026; and at CG Power's facility scheduled to commence operations in July 2026. The Tata Electronics fabrication plant at Dholera in Gujarat — the largest single semiconductor investment in India's history at ₹91,000 crore — is on track for completion by 2028. The Tata OSAT plant in Assam, India's first major semiconductor presence in the North-East, is slated to commence operations by end of 2026.

What the ₹7,100 crore covers

The Department of Expenditure's FY27 package is structured around three coordinated components, each addressing a distinct segment of the semiconductor value chain.

**Component One — Major Fabrication Unit:** ₹2,000 crore in fiscal support is allocated for one major semiconductor fabrication unit. The provision is calibrated to attract ₹4,000 crore in matching private investment and create approximately 1,500 direct jobs. This component continues the strategic emphasis on building India's silicon-wafer manufacturing capability — the most capital-intensive segment of the value chain, which forms the foundation of any sovereign semiconductor capability.

**Component Two — Specialised Facilities:** ₹5,000 crore is allocated across nine specialised semiconductor facilities, covering three distinct technology categories. Assembly, Testing, Marking and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) facilities — which take raw silicon wafers and convert them into packaged, tested, market-ready chips — form the largest sub-category. Compound semiconductor facilities, addressing categories such as silicon carbide (SiC) and gallium nitride (GaN) that are essential to power electronics, electric vehicles, renewable energy systems, and high-frequency communications, form the second sub-category. Sensor-manufacturing facilities, addressing the rapidly-growing demand for sensors in automotive, industrial, defence, and consumer electronics applications, form the third. The component is calibrated to attract ₹11,000 crore in private capital and generate approximately 3,000 jobs.

**Component Three — Design Linked Incentive:** ₹100 crore is allocated through an expanded Design Linked Incentive (DLI) scheme to back 30 semiconductor design firms — Indian companies developing indigenous chip designs, intellectual property cores, and design-services capabilities. The target outcome is the development of ten Indian semiconductor IP cores — the foundational design blocks that future Indian-designed chips will incorporate, building the country's strategic capacity to design chips for its specific application requirements without dependence on foreign IP.

The three components together amount to ₹7,100 crore in government fiscal support, calibrated to attract approximately ₹15,000 crore in private investment, and generate substantial employment across the high-skill semiconductor manufacturing and design ecosystem.

The wider ISM architecture

The Department of Expenditure's FY27 package sits within the substantially larger architecture of the India Semiconductor Mission (ISM). The original ISM, approved by the Union Cabinet in December 2021, established an incentive outlay of ₹76,000 crore — offering up to 50 per cent fiscal support for silicon fabrication units, compound semiconductor facilities, ATMP/OSAT plants, and chip design activities. As of December 2025, ten projects with cumulative investments of approximately ₹1.60 lakh crore had been approved across six Indian states, covering silicon fabrication, silicon carbide fabs, advanced and memory packaging facilities, and specialised assembly and testing infrastructure.

The Union Budget 2026-27, presented in February 2026, launched the next phase — India Semiconductor Mission 2.0. The new phase marks a strategic shift from ecosystem creation to ecosystem consolidation, technological depth, and global integration. ISM 2.0 has been allocated a foundational provision of ₹1,000 crore for FY 2026-27, with a strong emphasis on industry-led research and training centres, indigenous production of semiconductor equipment and materials within India, full-stack Indian semiconductor intellectual property development, and the fortification of domestic and global supply chains.

The Modified Programme for Development of Semiconductor and Display Manufacturing Ecosystem in India — operating in parallel with ISM 2.0 — has a total financial outlay of ₹8,000 crore for 2026-27, accelerating capital investment, employment generation, and capability expansion across fabrication, packaging, and chip design. The Electronics Components Manufacturing Scheme (ECMS) — which addresses the upstream electronic components ecosystem that supports semiconductor manufacturing — has had its budget outlay increased to ₹40,000 crore in the Union Budget 2026-27. Together, these programmes constitute one of the largest integrated industrial-strategy commitments in any nation's semiconductor history.

Where India stands today: the ten approved projects

The ecosystem that the FY27 package will further accelerate already has substantial physical infrastructure on the ground. The ten approved projects under ISM 1.0 span six Indian states and cover the full breadth of semiconductor manufacturing.

The Tata Electronics fab at Dholera, Gujarat — the largest single investment at ₹91,000 crore (55 per cent of total committed investment under ISM 1.0) — is targeted for completion in 2028 and will be India's first major silicon fabrication facility. The Micron Technology ATMP plant at Sanand, Gujarat, has been the early flagship — commercial production began in FY 2025-26, and the facility was formally inaugurated by Prime Minister Modi in February 2026. The Kaynes Semicon plant at Sanand was inaugurated by the Prime Minister in March 2026 and has commenced commercial production. The CG Power semiconductor facility is expected to commence commercial production in July 2026. The Tata OSAT plant in Assam — India's first major semiconductor presence in the North-East — is slated to commence operations by end of 2026. Two additional semiconductor manufacturing units were approved by the Cabinet on 5 May 2026, with cumulative investment of more than ₹3,900 crore. Rajasthan received its first semiconductor plant approval on 15 May 2026. India's first advanced 3D semiconductor packaging unit, in Odisha, had its groundbreaking ceremony on 19 April 2026, providing critical capability for AI, 5G, and defence-electronics applications. The HCL-Foxconn joint venture project had its groundbreaking ceremony on 21 February 2026.

The design ecosystem: where the DLI dovetails

The ₹100 crore Design Linked Incentive component of the FY27 package builds on substantive momentum that has accumulated in India's semiconductor design ecosystem over recent years. As of January 2026, the DLI scheme already supports 24 semiconductor design startups across the country. These startups have collectively attracted nearly ₹430 crore in venture capital funding — a substantive validation of investor confidence in India's design capabilities. The Advanced Electronic Design Automation (EDA) national chip-design platform has enabled access to high-end design tools for academic and startup users, recording approximately 2.25 crore (22.5 million) tool hours of usage. Around 67,000 students and over 1,000 startup engineers are actively using these tools for chip design and development.

The tangible outputs are increasingly visible. In academic settings, 122 chip designs have been "taped out" — the technical term for completing a design and submitting it for manufacturing. Of these, 56 chips have been fabricated at 180-nanometre technology nodes at the Semiconductor Laboratory in Mohali. Startups have completed 16 tape-outs, resulting in six chips fabricated at advanced foundry nodes — including technologies as advanced as 12 nanometres, comparable to commercial production at major global foundries.

The Digital India RISC-V (DIR-V) Programme has been a particular standout. The programme has developed indigenous Indian processors — including VIKRAM and THEJAS — built on the open-source RISC-V architecture, which eliminates licence costs and enables collaborative innovation across the ecosystem. These processors collectively form the foundation of an Indian processor ecosystem with applications across 5G infrastructure, automotive electronics, industrial automation, consumer devices, and the Internet of Things. The development of indigenous processor platforms is particularly consequential given that India consumes approximately 20 per cent of global microprocessor demand — a substantial market that, until recently, was almost entirely served by imported processors.

The FY27 ₹100 crore DLI expansion will scale this design ecosystem from 24 supported startups to over 50, and will target the development of ten indigenous semiconductor IP cores — the foundational design blocks that Indian-designed chips will incorporate going forward.

The market opportunity

The scale of the opportunity that India's semiconductor strategy addresses is substantial. India's semiconductor market has grown from approximately USD 38 billion in 2023 to USD 45-50 billion in 2024-25, and is projected to reach USD 100-110 billion by 2030 — more than doubling in less than five years. India consumes approximately 20 per cent of global microprocessor demand, making it one of the largest end-markets globally. The Government has set ambitious milestones: 70 to 75 per cent self-sufficiency in domestic chip demand by 2029, and 3-nanometre and 2-nanometre manufacturing capabilities by 2035 — placing India progressively at the frontier of global semiconductor capability.

The applications driving this growth span virtually every consequential sector of the Indian economy: electric vehicles (which require substantially more semiconductor content than internal-combustion vehicles), 5G and emerging 6G telecommunications, defence electronics, renewable energy power electronics, electric grid infrastructure, consumer electronics, industrial automation, healthcare devices, and the rapidly-expanding AI infrastructure. Each of these end-markets has its own substantial growth trajectory in India, and the cumulative demand profile makes the case for domestic semiconductor capability structurally compelling.

The strategic dimensions

The Indian semiconductor strategy carries strategic implications well beyond the immediate economic dimension.

**For economic resilience**, domestic semiconductor capability reduces India's exposure to global supply-chain disruptions of the kind that have, over the past several years, demonstrated the strategic vulnerability of countries dependent on imported chips. The COVID-period chip shortages, the subsequent geopolitical tensions, and the export-control regimes that major chip-producing nations have progressively implemented all underline the strategic value of sovereign semiconductor capability.

**For technological sovereignty**, the ability to design and manufacture semiconductors gives India the autonomy to pursue its own technology trajectory — particularly in areas of national strategic importance such as defence systems, secure communications, financial infrastructure, and AI. Indigenous IP cores, indigenous processors (VIKRAM, THEJAS), and indigenous manufacturing capability together provide the foundations for such autonomy.

**For the broader Aatmanirbhar Bharat doctrine**, semiconductors complete a critical missing piece in India's industrial-strategy architecture. The country has progressively built capabilities across defence manufacturing (₹38,424 crore in defence exports for FY 2025-26), pharmaceuticals (the "pharmacy of the world" positioning), digital infrastructure (UPI, ONDC, the world's largest digital identity system), and now critical minerals processing and high-speed rail. Semiconductors complete this architecture by adding the foundational layer on which most modern technology rests.

**For India's diplomatic positioning**, semiconductor capability strengthens India's positioning in the Quad, the Indo-Pacific Economic Framework, and bilateral relationships with the United States, Japan, South Korea, Taiwan, the Netherlands, Germany, and other major semiconductor-economy partners. India's progressive integration into the global semiconductor value chain — as a designer, manufacturer, packaging hub, and end-market — gives the country substantial strategic agency in shaping the future of the most consequential technology of the present century.

The road ahead

The FY27 ₹7,100 crore package will move through implementation over the coming twelve months. Applications for the fabrication-unit component, the specialised-facilities component, and the expanded DLI component will be invited and evaluated through the established institutional processes of the India Semiconductor Mission. Project clearances will progressively bring additional capacity into the development pipeline. Investments will commence in FY27 and progressively scale through subsequent years.

In the medium term, the trajectory is well-established. The Ministry of Electronics and Information Technology estimates that semiconductor companies under the ISM will collectively invest ₹31,299 crore by FY27 — representing approximately one-fifth of the committed investment of about ₹1.65 lakh crore under the scheme. By 2029, India targets the capability to design and manufacture chips required for 70 to 75 per cent of domestic applications. By 2035, the country targets 3-nanometre and 2-nanometre manufacturing capabilities, placing it at the frontier of global semiconductor technology.

In the longer term, India's semiconductor ecosystem — anchored by Indian-designed processors built on the RISC-V architecture, Indian-manufactured chips across multiple technology nodes, Indian-packaged products serving both domestic and export markets, and Indian-trained semiconductor talent across the design, manufacturing, and equipment-supply ecosystem — has the potential to position the country among the leading global semiconductor nations. The journey is multi-decade; the trajectory is now firmly established.

For now, on the morning of 24 June 2026, what stands on the official record is this: the Department of Expenditure has finalised a ₹7,100 crore FY27 incentive package targeting ₹15,000 crore in private investment, 4,500-plus direct jobs, ten indigenous IP cores, and the further consolidation of India's semiconductor ecosystem. ISM 2.0 is operational. Commercial production is underway at multiple facilities. Indigenous Indian processors are operating in real applications. The semiconductor mission that, just five years ago, looked like ambitious aspiration is, today, an operating industrial reality whose continued trajectory is among the most consequential strategic narratives in India's contemporary industrial story.