Economy · 16 Jul 2026

India Semiconductor Mission 2.0

Which one of the following statements about India Semiconductor Mission (ISM) 2.0, recently approved by the Union Cabinet, is correct?

AISM 2.0 offers a uniform 50 percent capital subsidy to all categories of semiconductor manufacturing units, identical to the structure under ISM 1.0
BISM 2.0 extends capital subsidies for the first time to upstream suppliers of specialty gases and process chemicals used in chip fabrication, in addition to fabs
CISM 2.0 excludes fabrication plants entirely, focusing its entire outlay exclusively on chip design, R&D and talent development
DISM 2.0 was launched with a lower total outlay than ISM 1.0, reflecting a scaled-back approach to semiconductor self-reliance
This question is based on: Semicon 2.0's Real Shift: From Funding Fabs to Funding the Supply Chain
Take this in full test mode → Instructions for 16 Jul 2026
About this question

Why in news

The Union Cabinet approved India Semiconductor Mission 2.0 with an outlay of ₹1.27 lakh crore on July 15, 2026, alongside a Mobile Phone Manufacturing Scheme and other infrastructure projects.

Why for UPSC

UPSC has tested MSME manufacturing policy directly (2023, GS3); this question checks whether aspirants grasp the specific structural innovation of ISM 2.0 (supply-chain extension) rather than just its headline outlay figure.

Prelims summary

ISM 2.0 (₹1.27 lakh crore) introduces tiered subsidies (40% for fabs, 35% for other units) and, unlike ISM 1.0's uniform 50% subsidy, extends incentives for the first time to upstream gas and chemical suppliers in the semiconductor supply chain.

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