FM boosts electronics push, hikes component manufacturing scheme outlay to ₹40,000 crore, unveils ISM 2.0

New Delhi (The Uttam Hindu): In the Union Budget 2026, Finance Minister Nirmala Sitharaman announced the India Semiconductor Mission 2.0. Through this initiative, the government aims to capitalize on emerging opportunities in the semiconductor sector. Additionally, the outlay for the Electronics Component Manufacturing Scheme has been increased to ₹40,000 crore to boost local production.

The Finance Minister stated that the government has allocated ₹40,000 crore for this purpose. This initiative aims to promote industry-led research and training in the semiconductor sector.

In her Budget speech, Finance Minister Sitharaman said, "India's Semiconductor Mission 1.0 has expanded the country's semiconductor capabilities. Building on this, the government will launch ISM 2.0 to strengthen equipment and materials production, full-stack Indian intellectual property (IP) development, and supply chains. To leverage India's semiconductor development momentum, the outlay for the Electronics Component Manufacturing Scheme has been increased to ₹40,000 crore."

Finance Minister Sitharaman said, "We will also focus on industry-led research and training centres for developing technology and a skilled workforce. The Electronics Components Manufacturing Scheme (ISM), launched in April 2025 with an outlay of ₹22,999 crore, has already received investment commitments twice the target."

Apart from this, the Union Budget 2026-27 also proposes the introduction of a dedicated fund of Rs 10,000 crore for Small and Medium Enterprises (SME) development, aimed at creating future employment and incentivising enterprises based on selected criteria.

For the labor-intensive textile sector, the Finance Minister has proposed an integrated program with five key components. The first component – ​​the National Fibre Scheme – aims to achieve self-sufficiency in natural fibres such as silk, wool, and jute, as well as man-made and new industrial-age fibres.

The second component – ​​Textile Extension and Employment Scheme, aims to modernize traditional clusters by providing capital support for machinery, technology upgradation and common testing and certification centres.

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