Engineering India’s Innovation Backbone of Semiconductors, Minerals, Climate Tech
The Union Budget places science and technology at the core of India’s future growth, strengthening semiconductors, electronics, critical minerals, climate technologies, and capital goods to build a resilient, innovation-driven industrial backbone for long-term economic and strategic self-reliance.
India Semiconductor Mission (ISM) 2.0
Strategic Leap
- ISM 2.0 builds on ISM 1.0’s fabrication focus to create a complete semiconductor ecosystem
- Objective: Move India from chip assembly to design, equipment manufacturing, and full-stack innovation
Key Focus Areas
- Equipment & Materials Manufacturing
- Indigenous semiconductor fabrication equipment
- Specialty chemicals and gases
- Reducing import dependency exceeding USD 23 billion annually
- Full-Stack Indian IP Development
- Proprietary chip architectures
- Electronic Design Automation (EDA) tools
- Process Design Kits (PDKs)
- Supply Chain Fortification
- Domestic capabilities for wafers, substrates, and advanced packaging
- Industry-Led Research & Talent Development
- Research centres linked with manufacturing clusters
- Addressing an estimated shortfall of 300,000 skilled professionals
Strategic Impact
- Positions India as a complete semiconductor ecosystem player
- Potential to generate over 500,000 jobs in design, manufacturing, and R&D by 2030
Electronics Components Manufacturing
Scheme Performance
- Original allocation (April 2025): ₹22,919 crore
- Investment commitments exceeded targets within 10 months
Enhanced Allocation
- Expanded to ₹40,000 crore under Union Budget push
Component Focus
- Active components:
- Transistors
- Integrated circuits
- Microprocessors
- Passive components:
- Resistors
- Capacitors
- Inductors
- Electromechanical components:
- Connectors
- Switches
- Relays
- Display technologies:
- LED
- OLED
- Micro-LED
- Power electronics:
- IGBTs
- MOSFETs
- Power modules
Strategic Relevance
- Positions India as a viable alternative to China-centric electronics supply chains
- Critical for automotive, consumer electronics, and industrial applications
Rare Earth Permanent Magnets
Dedicated Rare Earth Corridors
- Odisha
- Kerala
- Andhra Pradesh
- Tamil Nadu
Integrated Value Chain
- Mining
- Monazite
- Beach sand minerals
- Laterite deposits rich in rare earth elements (REEs)
- Processing
- Separation, refining, purification of 17 REEs
- Research
- Advanced separation techniques
- Recycling technologies
- Environmental remediation
- Manufacturing
- NdFeB magnets
- SmCo magnets
Applications
- Electric vehicles
- Wind turbines
- Renewable energy systems
- Defence electronics
- Consumer electronics
Strategic Importance
- Reduces dependence on China, which controls ~90% of global REE processing
- Enables India’s clean energy and EV transition
CCUS: Climate-Tech Scale-Up
Investment
- ₹20,000 crore over 5 years
Sectoral Coverage
- Power generation
- Steel manufacturing
- Cement production
- Refineries
- Chemical industries
Technology Pathway
- Advancing CCUS technologies to higher Technology Readiness Levels (TRL 7–9)
Implementation Focus
- Pilot demonstration plants (50–100 tonnes CO₂/day)
- Commercial-scale installations (1,000+ tonnes CO₂/day)
- CO₂ transport infrastructure (pipelines and shipping)
- Geological storage assessment and monitoring
- Utilisation pathways:
- Carbon-negative concrete
- Blue hydrogen
- Methanol synthesis
- CO₂-based polymers
Alignment
- Anchored to the December 2025 CCUS roadmap
Capital Goods & Precision Manufacturing Capability
A. Hi-Tech Tool Rooms
- 2 CPSE-operated facilities
- Digitally enabled, automated service bureaus
- Capabilities:
- Precision design
- Testing
- Local manufacturing
- Impact:
- Reduced costs
- Improved quality
- Faster industrial turnaround
B. Construction & Infrastructure Equipment (CIE) Scheme
- Domestic manufacturing of high-value equipment:
- Apartment lifts
- Fire-fighting systems
- Tunnel-boring machines
- Equipment for metros and high-altitude roads
- Objective:
- Reduce import dependence
- Strengthen infrastructure self-reliance
C. Container Manufacturing Ecosystem
- Allocation: ₹10,000 crore over 5 years
- Goal:
- Globally competitive container production
- Strategic Impact:
- Lower logistics costs
- Enhanced export competitiveness
Chemical Parks: Strengthening Domestic Chemical Production
Initiative
- Establishment of 3 dedicated Chemical Parks
- Implemented through a challenge-based selection route
Infrastructure Model
- Cluster-based, plug-and-play facilities
- Common effluent treatment plants
- Shared utilities and logistics
- Regulatory compliance support
- R&D collaboration platforms
Beneficiary Sectors
- Pharmaceuticals
- Agrochemicals
- Specialty chemicals
- Polymers
Outcome
- Reduced import dependency
- Improved environmental and compliance standards
- Boost to domestic chemical manufacturing ecosystems
Together, these measures signal a decisive shift—positioning science, engineering, and technology as foundational pillars of India’s industrial competitiveness, climate responsibility, and strategic autonomy.
– Rajesh K Pradhan
