Finance Ministry EFC Clears ₹1.25 Lakh Crore for ISM 2.0 — Cabinet Approval Next
The Finance Ministry's Expenditure Finance Committee (EFC) has cleared a ₹1.25 lakh crore proposal for India Semiconductor Mission 2.0 — a 64% increase over ISM 1.0's ₹76,000 crore — with Cabinet approval now the final step before the programme launches.
ISM 2.0, once Cabinet-approved, will expand India's semiconductor programme beyond fabrication and packaging to cover: semiconductor manufacturing equipment (India currently imports 100% of its chipmaking equipment), speciality chemicals and industrial gases, semiconductor design IP, supply chain strengthening, and industry-led R&D and training centres. The EFC clearance of ₹1.25 lakh crore signals that the Finance Ministry has accepted the expanded scope — a significant internal hurdle given the scale of the outlay.
ISM 2.0 is also expected to modify ATMP/OSAT incentive structures — potentially reducing the 50% capex subsidy and redirecting support toward equipment and materials procurement, which has stronger domestic supply chain multiplier effects. Final contours pending Cabinet notification.
ISM 2.0's training centre emphasis is the most direct signal for institutions yet: the government is explicitly planning to fund industry-led semiconductor education infrastructure. Institutions that have already started semiconductor programmes — or that can demonstrate a credible plan — will be better positioned to access ISM 2.0 training centre support when it opens. The window to be an early mover in ISM 2.0 is the same window that was open for ISM 1.0 facility applications in 2022. The institutions that moved in 2022 are now operational. The ones that waited are not.