India Unveils $2.5 Billion Plan for Mobile Phone and Semiconductor Manufacturing

The Indian government has approved two new manufacturing programs valued at a total of ₹1.9 lakh crore (approximately $2.5 billion USD) aimed at expanding the nation's mobile phone and semiconductor sectors. These initiatives include a ₹62,500 crore scheme for mobile phone manufacturing and Semicon 2.0, a ₹1,27,500 crore package to bolster chip design and manufacturing capabilities.

The mobile phone scheme, set to run from fiscal year 2026-27 to 2030-31, will offer incentives ranging from 2.25% to 5% on eligible sales for manufacturers. An additional incentive of up to 1.5% is available for companies sourcing key components and sub-assemblies domestically. This program signifies a strategic shift towards increasing domestic component production, design, and research, moving beyond simple assembly. The government anticipates this scheme will support cumulative mobile production worth around ₹39 lakh crore and create approximately 60,000 direct jobs by March 2031.

Semicon 2.0 extends government support for the semiconductor industry, encompassing six key areas: chip design, semiconductor equipment and materials, fabrication plants, assembly and packaging facilities, research and development, and workforce training. The overarching goal is to complement the mobile phone manufacturing push by fostering a more comprehensive domestic electronics supply chain.

Under the first phase of the semiconductor initiative, 12 manufacturing projects have garnered approval with investments exceeding ₹1.64 lakh crore. These include a silicon fabrication plant, a silicon carbide fab, an integrated gallium nitride Micro LED display fab, and nine chip packaging units. The government has also backed 24 semiconductor design projects from startups and MSMEs, providing them with access to crucial design tools.