UNION BUDGET 2026-27 Overview

From ISM 2.0 to a big boost for manufacturing, Budget 2026-27 reshapes the electronics playbook. Yet, what it delivers and what it leaves unsaid may matter even more for the industry.

- By SHUBHA MITRA

The Budget projects GDP growth of 7.4% for 2025-26 and 6.8-7.2% for 2026-27. For electronics, it combines incentives, supply-chain strengthening, and a clear policy thrust towards semiconductors, data centres, and emerging technologies such as artificial intelligence (AI).

Central sector schemes and projects account for nearly ₹177.69 billion of the total. Much of the increase supports semiconductor manufacturing, AI, and electronics components. The Modified Semiconductor and Display Manufacturing Programme records the sharpest rise, almost doubling to ₹80 billion from ₹43 billion a year earlier.

MeitY's budget

The allocation for the Ministry of Electronics and Information Technology (MeitY) stands at roughly ₹216.33 billion, up from ₹202.3295 billion in the previous estimates.

ISM 2.0 announced

A key announcement is the expansion of the India Semiconductor Mission (ISM). Building on ISM 1.0, which laid the foundation for fabs and ecosystem development, ISM 2.0 widens the mandate to domestic production of semiconductor equipment and materials, alongside full-stack Indian intellectual property. Industry-led research and training centres will support both technology advancement and skills creation.

The focus shifts from capacity alone to depth across the value chain, aligning with pre-Budget industry expectations. Hareesh Chandrasekar, CEO and Co-founder of AGNIT Semiconductors, described Budget 2026 as an opportunity to move 'from intent to impact,' adding that funding beyond the earlier $10-billion outlay could catalyse the next phase of semiconductor growth.

A ₹400 billion boost for ECMS