SPARKS OF HOPE FOR ELECTRONICS MAKERS

The electronics component manufacturing scheme expanded to ₹40,000 crore to promote domestic chip making

- Shouvik Das & Saloni Goel

The government announced a second tranche of incentives under the India Semiconductor Mission (ISM), five years after rolling out the first ₹76,000-crore programme, and expanded the electronics component manufacturing scheme (ECMS) to a net outlay of ₹40,000 crore from ₹22,919 crore, to deepen domestic chip and electronics manufacturing.

Finance minister Nirmala Sitharaman, while presenting the budget 2026-27 on Sunday, also announced rolling out tax exemptions for India’s contract manufacturers if they partner with foreign brands to import high-end equipment for manufacturing devices such as smartphones, laptops and other electronic appliances.

The announcements were welcomed by India's electronics and chipmaking industries, with analysts and stakeholders flagging the measures as supportive of attracting more firms from global technology supply chains into India.

India Semiconductor Mission 1.0 expanded India’s semiconductor sector capabilities. Building on this, we will launch ISM 2.0 to produce equipment and materials, design full-stack Indian IP and fortify supply chains. We will also focus on industrial research and training centres to develop technology and skilled workforce.