NEW DELHI: The Union cabinet on Wednesday approved two schemes, with govt support of Rs 1.9 lakh crore, aimed at taking India’s electronics manufacturing ambitions beyond assembly lines into semiconductor fabrication, advanced packaging, materials and homegrown mobile phone brands.The Cabinet cleared Semicon 2.0 with an outlay of Rs 1,27,500 crore and the Mobile Phone Manufacturing Scheme (MPMS) with a budget of Rs 62,500 crore. Both schemes will run for five years from 2026-27 to 2029-31 and are intended to deepen domestic value addition, reduce import dependence and strengthen India’s position in global electronics supply chain. Govt’s long-term target is to build a $500 billion electronics manufacturing industry by 2030-31.

Semicon 2.0 significantly broadens govt’s strategy beyond fabrication, electronics and information technology minister Ashwini Vaishnav told reporters. Besides, supporting new fabs and advanced packaging units, the scheme will extend incentives for semiconductor materials, specialty chemicals, manufacturing equipment, research and development, chip design and talent development, Vaishnaw said.The scheme also aims to create an indigenous ecosystem for semiconductor manufacturing equipment and materials – segments where India currently has limited presence. Govt said the programme is expected to attract investments of around Rs 4 lakh crore, generate semiconductor production worth Rs 2 lakh crore and exports of nearly Rs 1 lakh crore over time. Govt is also placing renewed emphasis on semiconductor design. Financial support will be available for Indian startups and companies designing chips for both strategic and commercial sectors, while additional investments will go towards research, advanced-node technologies and workforce development.Alongside the semiconductor push, the Cabinet approved MPMS to succeed the existing production-linked incentive scheme for mobile phones, shifting the focus from large-scale assembly towards deeper localisation and Indian intellectual property. The scheme will provide sales-linked incentives ranging from 2.25% to 5%, with additional incentives of up to 1.5% linked to domestic sourcing of key components and sub-assemblies. Indian brands, which are undertaking design and R&D, will be eligible for an additional 3% incentive.