Union Budget 2026 Reactions: Moving beyond chip assembly to build a complete, self-reliant semiconductor ecosystem for a strong electronics industry

The Union Budget 2026 indicated India wants to move from being a global assembly hub to a full-spectrum semiconductor and electronics powerhouse. With the launch of India Semiconductor Mission 2.0 and a INR40,000 crore outlay for the Electronics Component Manufacturing Scheme, the government is doubling down on localisation across materials, equipment, design, and intellectual property.

HIGHLIGHTS

• India Semiconductor Mission 2.0
• INR40,000 crore outlay for the Electronics Component Manufacturing Scheme

The Tech Panda spoke to industry experts across electronics, deep tech, automation, and manufacturing to understand how these announcements could reshape India’s high-value supply chains, unlock innovation-led manufacturing, and position the country as a serious global contender in semiconductors and advanced electronics.

Dhruv Chopra, Managing partner, Dewan P N Chopra and Co.

“With the allocation of INR40,000 crore for manufacturing electronics components, furthering the India semiconductor mission – India is moving beyond chip assembly to build a complete, self-reliant semiconductor ecosystem. This strategic investment targets the high-value supply chain—including specialized materials and equipment—that currently accounts for a massive portion of our imports. By incentivizing domestic production of these core elements, the mission aims to double local value addition and secure India’s position as a global nerve center for high-tech manufacturing.”

Shishir Gupta, Co-founder, CEO, Oakter

“The launch of India Semiconductor Mission 2.0 marks a decisive shift from assembly scale to technology depth and IP ownership, which is exactly what the electronics sector has been waiting for. Moving into equipment, materials, and full stack Indian IP creation strengthens the backbone needed for original design manufacturing to thrive at global standards. The increased outlay of INR40,000 crore for electronics component manufacturing is a strong signal that localisation will now be measured not just in volumes but in capability and value addition. For ODM-led companies, this creates room to design, build, and scale complex products entirely from India while integrating more resilient supply chains. The proposed INR10,000 crore SME growth fund is equally important as it addresses a chronic gap in growth capital that limits innovation led manufacturing. If implemented with speed and clarity, these measures can unlock automation, deepen component ecosystems, and help Indian electronics brands compete confidently in global markets as creators rather than contract manufacturers.”

Kumarraju, Managing Director, Titan Intech Limited

“Localising semiconductor manufacturing has been a persistent challenge for India. From LED chips to controllers, critical components remain heavily reliant on imports, creating both cost pressures and supply risks. Strengthening domestic production is essential to build a resilient manufacturing ecosystem and make advanced electronics more accessible to consumers. Achieving cost advantage requires scale, and the Union Budget’s India Semiconductor Mission 2.0 offers a clear pathway for the sector. The increased outlay for the Electronics Component Manufacturing Scheme to INR40,000 crore can support the development of a robust local supply chain and enable innovation across the value chain.”

Gokul NA Founder, CynLr

“The launch of ISM 2.0 marks an important shift in India’s semiconductor journey—from a narrow focus on fabrication to building capabilities across equipment, materials, design, and full-stack Indian IP. Alongside the expanded ?40,000 crore Electronics Components Manufacturing Scheme, this Budget strengthens the domestic electronics and semiconductor supply chain in a meaningful way. For hardware and deep-engineering startups, this creates the foundation to design and build globally competitive technology in India, with greater control over critical components rather than relying entirely on imported ecosystems.”

Anil Agrawal, Founder & CEO, CIMCON Automation

“The India Semiconductor Mission 2.0 represents a meaningful commitment by the Government of India to the growth of the utilities automation sector. With a INR40,000 crore outlay, this initiative provides vital support to full-stack, deep-tech enterprises like ours as we develop domestic intellectual property and scale Indian innovation globally. The localization of critical semiconductor components will create a powerful snowball effect: improving accessibility, reducing lead times, and lowering costs, unlocking opportunities in price-sensitive domestic markets, and accelerating the digital transformation of utilities.”