INDIA —India's central government has issued official notification for the Semicon 2.0 program, allocating ₹1.27 trillion to build comprehensive domestic capabilities across the microelectronics lifecycle. Designed to expand beyond foundational manufacturing initiatives, the framework targets six key operational verticals, including semiconductor fabrication, chip design, equipment production, and advanced testing. The Ministry of Electronics and Information Technology serves as the executive body responsible for policy formulation, digital infrastructure governance, and electronics sector development across the country. Through this updated program, government policy shifts focus toward building sovereign technological capacity while scaling local component availability for strategic sectors.
The policy structure offers targeted financial support to lower capital barriers for enterprise entry across primary hardware segments. Front-end silicon wafer fabrication initiatives with investments exceeding ₹2 trillion are eligible for up to 40% capital expenditure support, while packaging, compound semiconductors, photonics, and specialized display facilities can access support tiers ranging from 25% to 35%. To foster domestic intellectual property creation, the framework incorporates design-linked incentives, offering seed funding up to ₹150 million alongside equity co-investment mechanisms for local startups and small businesses. Specialized screening panels co-chaired by national security and scientific advisors will oversee target design projects, ensuring strategic alignment with domestic infrastructure priorities.
By extending incentives to upstream capital equipment makers and raw material vendors, the government aims to establish a self-sustaining industrial cluster capable of withstanding global supply chain disruptions. The program introduces production-linked incentives of 2% to 10% for equipment manufacturing, alongside high-ratio support of up to 75% for research, development, and workforce training initiatives. Broadening eligibility rules to encompass firms owned by non-resident Indian citizens further broadens the influx of technical expertise and capital, positioning the region to capture a larger share of global hardware demand over the next decade.
