| India Semiconductor Mission (ISM) | |
|---|---|
| Country | India |
| Prime Minister(s) | Narendra Modi |
| Ministry | MEITY |
India Semiconductor Mission is a specialised nodal agency set up by the Government of India in December 2021 to build a robust domestic semiconductor and display manufacturing ecosystem, with the broader aim of positioning India as a global hub for electronics manufacturing and design. Operating under the Ministry of Electronics and Information Technology (MEITY), the agency is responsible for the efficient implementation of all fiscal-support schemes under the Modified SemiconIndia Programme.[1][2].
Backed by an initial outlay of 76,000 crore ₹ under Phase 1 and a further 1,27,500 crore ₹ under Phase 2 (announced in 2026), ISM funds up to half the project cost of semiconductor fabs, display fabs, compound-semiconductor and ATMP/OSAT facilities, and chip-design startups through the Design Linked Incentive scheme.[1][3] As of December 2025, ten projects worth a combined 1.60 lakh crore ₹ have been approved across six states.
Background[edit | edit source]
India imports nearly all of the semiconductors it consumes; a vulnerability exposed by the global chip shortage of 2020–22 that disrupted automotive, telecom, and consumer-electronics supply chains worldwide. Semiconductors sit at the heart of every modern digital system, from smartphones and EVs to defence radar and data-centre AI accelerators; ensuring a secure, domestic supply of chips became a matter of strategic autonomy.
The Union Cabinet approved the comprehensive SemiconIndia programme on 21 December 2021 with a financial outlay of 76,000 crore ₹ to develop a sustainable semiconductor and display ecosystem. The India Semiconductor Mission was created as the dedicated nodal agency to administer this programme, led by global experts drawn from the semiconductor and display ecosystem.
The mission serves as the single point of contact for the coherent deployment of the Programme for Development of Semiconductor and Display Ecosystem, working in consultation with government ministries, industry, and academia. It also vets proposals, negotiates fiscal-support structures, and coordinates with state governments that may offer additional incentives.
ISM 1.0 — The Four Schemes[edit | edit source]
ISM 1.0 is structured around four fiscal-support schemes, each offering up to 50% of project cost on a pari-passu basis — meaning government support is released in proportion to the applicant's own investment. The schemes collectively cover the full semiconductor value chain: from wafer fabrication and display manufacturing to chip packaging, testing, and indigenous chip design.
Scheme 01 - Semiconductor Fabs[edit | edit source]
Supports setting up silicon CMOS-based wafer fabrication facilities for manufacturing logic, memory, digital ICs, analog ICs, mixed-signal ICs, and System-on-Chips (SoCs). Fiscal support tenure is six years.
Up to 50% of project cost
Scheme 02 - Display Fabs[edit | edit source]
Provides financial support for establishing AMOLED and LCD display fabrication units in India, reducing dependence on imported display panels used in smartphones, televisions, and laptops.
Up to 50% of project cost
Scheme 03 - Compound Semiconductors & ATMP/OSAT[edit | edit source]
Supports compound semiconductor, silicon photonics, sensors (including MEMS), and discrete semiconductor fabs, as well as assembly, testing, marking, and packaging (ATMP/OSAT) units — the critical back-end of chip manufacturing.
50% of capital expenditure
Scheme 04 - Design Linked Incentive (DLI)[edit | edit source]
With an outlay of 1,000 crore ₹, this scheme nurtures domestic chip-design startups and MSMEs through R&D support and deployment-linked incentives. Implemented by C-DAC as nodal agency; runs over a five-year period.
Up to 15 crore ₹ per company
Pari-passu explained[edit | edit source]
Under the pari-passu model, the government does not front-load its contribution. Fiscal support is released in tranches matching the applicant's own capital deployment, ensuring that public money follows private commitment and both parties share risk proportionally throughout the project lifecycle.