NewKerala.com

Budget 2026: India Boosts Chip & Electronics Manufacturing with Rs 40,000 Cr Outlay

Finance Minister Nirmala Sitharaman announced a major boost to domestic manufacturing in the Budget 2026-27, increasing the outlay for electronics component manufacturing to Rs 40,000 crore. She launched India Semiconductor Mission 2.0 to focus on producing equipment, developing Indian intellectual property, and strengthening supply chains. The budget also introduced an integrated programme for the textile sector and a Rs 10,000 crore fund for SME growth. Additionally, support was announced for mineral-rich states to establish dedicated rare earth corridors.

Key Points: Budget 2026: Rs 40,000 Cr for Electronics, India Semiconductor Mission 2.0

  • Rs 40,000 crore for electronics components
  • India Semiconductor Mission 2.0 launched
  • Rs 10,000 crore SME growth fund
  • Integrated textile sector programme
2 min read

Govt hikes component manufacturing outlay to Rs 40,000 crore, announces India Semiconductor Mission 2.0

FM Nirmala Sitharaman announces India Semiconductor Mission 2.0, hikes electronics component outlay to Rs 40,000 crore, and details textile & rare earth plans.

"We will also focus on industry-led research and training centres to develop technology and a skilled workforce. - Nirmala Sitharaman"

New Delhi, Feb 1

Giving a thrust to 'Make in India' and domestic manufacturing, Finance Minister Nirmala Sitharaman on Sunday announced the launch of the India Semiconductor Mission 2.0, while increasing the outlay for electronics component manufacturing to Rs 40,000 crore to strengthen local production and innovation.

India's Semiconductor Mission 1.0 expanded the country's semiconductor capabilities, and building on this, the government will launch ISM 2.0 to produce equipment and materials, develop full-stack Indian IP, and strengthen supply chains, she said while presenting the Budget 2026-27.

"We will also focus on industry-led research and training centres to develop technology and a skilled workforce. The Electronics Components Manufacturing Scheme, launched in April 2025 with an outlay of Rs 22,999 crore, already has investment commitments at double the targets," the Finance Minister told the House.

The Union Budget 2026-27 also proposed to introduce a dedicated Rs 10,000 crore SME growth fund to create future jobs, incentivising enterprises based on select criteria.​

For the labour-intensive textile sector, the Finance Minister proposed an integrated programme with five key components. The first is the National Fibre Scheme, aimed at achieving self-reliance in natural fibres like silk, wool, and jute, as well as man-made and new industrial-age fibres.

The second is the Textile Expansion and Employment Scheme, which seeks to modernise traditional clusters by providing capital support for machinery, technology upgrades, and common testing and certification centres.

The third component is the National Handloom and Handicraft Programme (NHHP), designed to integrate and strengthen existing schemes while ensuring targeted support for weavers and artisans.

A government scheme for rare-earth permanent magnets was launched in November 2025.

"We now propose to support the mineral-rich states of Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors," announced FM Sitharaman during her Budget speech.

- IANS

Share this article:

Reader Comments

P
Priya S
The focus on handloom and handicrafts is very welcome. Our artisans are the backbone of our cultural heritage. Hope the NHHP scheme ensures the benefits actually reach the weavers on the ground and not get stuck in bureaucracy.
V
Vikram M
Rs 40,000 crore is a huge commitment. The doubling of investment targets for the component scheme shows industry confidence. My only concern is execution speed. We need these fabs and corridors to be operational within this decade, not just on paper.
S
Sarah B
As someone working in tech, the emphasis on industry-led research centres is crucial. We have the talent, but need the infrastructure and industry-academia linkage to innovate. The SME growth fund could be a game-changer for startups too.
R
Rohit P
Good to see a balanced budget touching high-tech semiconductors and traditional textiles. The rare earth corridors in Odisha, AP, TN, Kerala make sense. But hope the environmental impact and rehabilitation of local communities are properly addressed. Development should be sustainable.
K
Kavya N
Finally some concrete steps for the textile sector! Modernising clusters and providing capital for machinery can help our MSMEs compete with Bangladesh and Vietnam. The National Fibre Scheme for self-reliance is a visionary step. 👏

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50