India Semiconductor Mission 2.0
Semiconductor mission 1.0 expanded India’s semiconductor sector capabilities. Building on this, Sitharaman announced the launch of India Semiconductor Mission 2.0 “to produce equipment and materials, design full-stack Indian IP, and fortify supply chains.”
“The Electronics Components Manufacturing scheme, launched in April 2025, with an outlay of Rs. 22,919 crores, already has investment commitments and doubled the targets. We propose to increase the outlay to 40,000 crores to capitalize on this momentum,” the announcement followed. The new phase will also prioritise industry-led research and training centres to address gaps in advanced semiconductor skills.
A scheme for Rare Earth Permanent Magnets was launched in 2025, November. “We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to establish dedicated rare earth corridors to promote mining, processing, research, and manufacturing,” Sitharaman noted.
What the shift implies for India’s tech ambitions
By targeting equipment, materials and full-stack IP, India is attempting to reduce its exposure to global chokepoints that can disrupt industries ranging from electronics and electric vehicles to defence and renewable energy. India’s move mirrors a broader effort to “de-risk” technology supply chains rather than fully decouple them.
The primary execution risk remains a skills-to-fab gap—India has the design talent, but it lacks the specialised operational workforce required to maintain high-yield manufacturing environments. For CIOs, India’s push for semiconductor sovereignty should be viewed as a vital China+1 insurance policy for mature nodes and industrial electronics, even as the cutting-edge AI silicon remains dependent on global supply chains for the foreseeable future,” says DD Mishra, VP Analyst, Gartner.
The focus on research and training also signals an acknowledgement that incentives alone are insufficient without sustained investments in skills and technology depth.
Why equipment and rare earths matter now
While semiconductor fabs often dominate policy discussions, recent global disruptions have highlighted the strategic importance of equipment, materials and critical minerals. Export controls, supply shocks and geopolitical tensions have exposed how concentrated these capabilities remain.
Control over these segments determines who can manufacture chips at scale and who remains vulnerable to external shocks.
What it means for enterprises
For enterprises, the impact will be gradual rather than immediate. Over time, stronger domestic capabilities could improve supply resilience, support long-term capital investment and ease talent shortages. However, much will depend on execution—how quickly policy intent translates into scalable industrial capacity and industry participation.
India targets services sector and emerging technologies to boost opportunities
The Indian government has announced a renewed focus on the services sector as a pathway to meeting the aspirations of a young population. Finance Minister Nirmala Sitharaman said the move is part of a broader effort to “fulfil aspirations and build capacities”, pointing out that nearly 25 crore people have moved out of multidimensional poverty over the past decade through reform-oriented policies.
As part of the initiative, a high-powered Education to Employment and Enterprises Standing Committee will be set up to recommend measures to strengthen services as a driver of Viksit Bharat. The government said the aim is to make India a global leader in services, targeting a 10% share of global trade in the sector by 2047.
The committee will focus on areas with the highest potential for growth, employment, and exports. It will also examine the impact of emerging technologies, including artificial intelligence, on jobs and skills, and propose interventions to prepare the workforce for these changes, Sitharaman said.
The announcement follows a series of government initiatives supporting new technologies, including the India AI Mission, National Quantum Mission, Anusandhan National Research Fund, and the Research, Development and Innovation Fund. Officials say the emphasis on services and skills is intended to create pathways for youth to access newer opportunities and for India to strengthen its position in the global economy.
CIO takeaways
- Talent pipeline: Enterprises should anticipate new skill requirements in AI, digital services, and allied sectors, and plan reskilling initiatives accordingly.
- Strategic planning: CIOs may need to align workforce development and recruitment strategies with evolving government priorities in services and technology.
- Opportunities for collaboration: The Standing Committee’s initiatives could create partnerships for tech adoption, innovation projects, and skills development programs in both private and public sectors.
