The government on Monday notified the Semicon 2.0 scheme with an outlay of Rs 1.27 lakh crore to strengthen and expand India’s semiconductor manufacturing and design ecosystem, with fiscal support planned across the chip industry’s entire value chain.

The scheme has been structured into six segments, covering areas such as semiconductor design by Indian companies, manufacturing of capital equipment required for chip production, semiconductor fabrication units, as well as chip assembly, packaging and testing.

According to the government notification, Semicon 2.0 is aimed at providing sustained policy support to the semiconductor sector and accelerating the development of a comprehensive design and manufacturing ecosystem in the country.

The scheme will provide fiscal assistance across various verticals, ranging from chip design and fabrication to packaging and other segments of the semiconductor industry.

Union Minister for Electronics and Information Technology Ashwini Vaishnaw has said that the government will constitute a high-level expert panel to identify strategic semiconductor chips that will qualify for incentives under the scheme.

The committee will be chaired jointly by the Principal Scientific Adviser (PSA) and the National Security Adviser (NSA). It will identify semiconductor products based on their national importance and strategic priorities, Vaishnaw said while speaking to reporters.

The government’s focus under Semicon 2.0 is not limited to building manufacturing capacity but also developing capabilities across the semiconductor value chain.

The initiative seeks to encourage domestic companies to participate in chip design while supporting facilities involved in fabrication, packaging, testing and the production of specialised equipment.

Vaishnaw said the scheme is also expected to help India reduce its dependence on overseas supplies for several semiconductor-dependent products.

Asked about areas where India could eventually meet domestic demand, he said the initiative aims to enable products such as sensors to meet up to 100 per cent of domestic requirements.

The notification comes as India seeks to build a globally competitive semiconductor ecosystem and establish greater domestic capabilities in a sector considered critical for electronics, automobiles, telecommunications, defence and other strategic industries.