Semicon 2.0 Approved: India’s Biggest Push Yet for Chips and Smartphone Manufacturing

India just made its boldest bet yet on building electronics from the ground up, not just assembling them. The Union Cabinet has cleared Semicon 2.0 and a new Mobile Phone Manufacturing Scheme in the same sitting, together worth close to ₹1.9 lakh crore, marking one of the country’s biggest moves to cut electronics imports and build high-value manufacturing at home.

What Got Approved

Union Minister Ashwini Vaishnaw confirmed the details after Wednesday’s Cabinet meeting, part of seven major decisions cleared that day with a combined outlay of ₹2.19 lakh crore. Semicon 2.0 and the mobile scheme were the two announcements with direct implications for India’s electronics and smartphone industry.

Semicon 2.0 with a total outlay of ₹1,27,500 Cr will strengthen India's semiconductor ecosystem across six pillars 🇮🇳
1️⃣ Chip design
2️⃣ Machines & materials
3️⃣ More Fabs
4️⃣ Strengthening ATMP/OSAT
5️⃣ Research & Development
6️⃣ Talent development pic.twitter.com/NTXBfr8czd

— Ashwini Vaishnaw (@AshwiniVaishnaw) July 16, 2026

Building on Semicon 1.0’s Head Start

This isn’t India starting from zero. Under Semicon 1.0 (2021-2026), the government has already approved 12 semiconductor projects worth more than ₹1.64 lakh crore. Micron, Kaynes, and CG Semi have already begun commercial production, with another unit expected to come online later in 2026. Tata Electronics’ Dholera fab, the marquee project of the first phase, is expected to begin commercial production in Q2 or Q3 of 2028, according to Vaishnaw. Semicon 2.0 is designed to build directly on that foundation, expanding into advanced packaging and equipment manufacturing rather than starting a fresh cycle.

Why the Mobile Scheme Matters as Much as the Chips

India has quietly become a manufacturing powerhouse on the assembly side already, having produced around 125 crore mobile phones and become the world’s second-largest mobile manufacturing ecosystem, with 99.2% of phones used domestically now made in India. The gap has always been components: displays, chips, camera modules, and the machines that make phones, most of which are still imported. MPMS is aimed squarely at closing that gap, and notably includes support for the machines used to manufacture phones themselves, not just the phones.

The government’s own targets for the scheme by FY31 are ambitious: ₹4 lakh crore in investments, ₹2 lakh crore in additional production, ₹1 lakh crore in exports, and around 60,000 direct jobs, with a longer-term goal of pushing mobile exports to ₹15 lakh crore.

This kind of state-backed manufacturing push is exactly the sort of structural shift that eventually shows up in device pricing and availability, something we’ve tracked in our recent coverage of component-driven price hikes hitting Xiaomi and Redmi tablets and the global chip and memory shortages squeezing device costs.

The Takeaway

Semicon 2.0 and MPMS together signal a real shift in India’s electronics strategy, from assembling imported parts to building the chips, components, and machines behind them. Whether the ambitious FY31 targets hold will depend on execution over the next five years, but the funding and the framework are now officially in place.