New Delhi: Ahead of Union Budget 2026, India’s semiconductor and electronics industry has urged the government to continue and strengthen key incentive schemes to sustain momentum in domestic manufacturing and design capabilities.
The Indian Electronics and Semiconductor Association (IESA) has called for the continuation of the India Semiconductor Mission (ISM) 2.0 and the Design Linked Incentive (DLI) scheme, stating that these initiatives are crucial for building a strong and globally competitive semiconductor ecosystem in the country.
IESA President Ashok Chandak said the industry strongly believes that long-term policy stability and sustained government support are essential to attract investments, scale up manufacturing, and promote indigenous chip design. He emphasized that ISM 2.0 should be carried forward with enhanced scope to support semiconductor fabs, display fabs, compound semiconductors, packaging, testing, and assembly units.
In addition to continuing existing schemes, the industry body has also requested the government to increase budgetary allocation for projects that have already received approval. According to IESA, several approved semiconductor and electronics manufacturing projects are at various stages of execution and require timely financial support to meet implementation timelines and cost commitments.
Chandak noted that the semiconductor sector is capital-intensive and highly sensitive to global competition. Countries across the world are offering aggressive incentives and policy support to attract chipmakers, and India must maintain comparable fiscal and policy measures to remain competitive.
The industry also highlighted the importance of the Design Linked Incentive (DLI) scheme, which aims to promote domestic chip design and innovation. IESA stated that the DLI scheme has helped nurture Indian startups and design firms, and its continuation would further strengthen India’s position in semiconductor intellectual property and value-added design services.
Experts believe that continued support through Budget 2026 would help India reduce its dependence on imports, strengthen supply-chain resilience, generate high-skilled employment, and support strategic sectors such as defence, telecom, electric vehicles, and artificial intelligence.
With semiconductor demand expected to grow sharply in the coming years, the industry hopes that Budget 2026 will reinforce the government’s commitment to making India a global hub for semiconductor manufacturing and design, ensuring long-term growth and technological self-reliance.