New Delhi, India — The Union Cabinet has approved two technology-manufacturing programmes with a combined budgetary outlay of ₹1.90 lakh crore to expand India’s semiconductor ecosystem and strengthen domestic mobile-phone production.
Approved on Wednesday, July 15, 2026, the package comprises ₹1,27,500 crore for Semicon 2.0 and ₹62,500 crore for the five-year Mobile Phone Manufacturing Scheme. The government is expected to issue the administrative notifications for both programmes within two weeks.
Semicon 2.0 will support India’s semiconductor design and manufacturing ecosystem through six principal areas: chip and intellectual-property design, semiconductor equipment and materials, additional fabrication facilities, advanced assembly and packaging, research and development, and talent creation.
The programme will provide support for companies manufacturing semiconductor equipment, chemicals, gases and other essential materials. It will also seek to attract silicon, compound-semiconductor, discrete-component and display fabrication facilities, while expanding India’s assembly, testing, marking and packaging capabilities.
Research efforts will focus on advanced semiconductor technologies and smaller process nodes through collaboration with Indian and international research institutions. The government will also expand university-level chip-design training and industry-led programmes covering clean rooms, fabrication facilities and semiconductor construction.
Under the first phase of the semiconductor programme, the government approved 12 manufacturing units involving cumulative investment exceeding ₹1.64 lakh crore. It also approved financial support for 24 semiconductor-design projects and provided 105 startups and small businesses with access to electronic design-automation tools.
The Mobile Phone Manufacturing Scheme will operate from FY27 to FY31. It will provide incentives ranging from 2.25% to 5% on eligible sales of mobile phones manufactured in India. Companies can receive an additional incentive of up to 1.5% for domestically sourcing key components and subassemblies.
The scheme also offers an additional 3% incentive on eligible sales to Indian brands undertaking their own product design and research and development. Its objectives include increasing production, improving domestic value addition, strengthening supply chains, supporting Indian intellectual property and expanding the global competitiveness of India’s mobile-phone industry.
The government expects cumulative mobile-phone production to reach approximately ₹39 lakh crore during the scheme period. It has projected the creation of around 60,000 direct jobs, although these remain programme estimates rather than completed employment outcomes.
India is currently the world’s second-largest mobile-phone manufacturer by volume, with the government stating that 99.2% of mobile phones used domestically are manufactured within the country. The new schemes extend India’s policy support beyond final-device assembly towards semiconductor fabrication, chip design, advanced packaging, domestic components and Indian-owned product development.
