On July 15, 2026 the Union Cabinet approved India Semiconductor Mission (ISM) 2.0 with a Rs 1,27,500 crore outlay. It uses a grant-plus-equity model for smaller startups designing chips (keeping IP in India) and offers combined central-plus-state support of up to 75% of project costs for companies and startups doing advanced-semiconductor R&D, plus a matching 75% incentive for talent programs. The mission targets roughly Rs 4 lakh crore in investment and Rs 2 lakh crore in chip production.
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Cabinet clears India Semiconductor Mission 2.0 with Rs 1.27 lakh cr, startup design grants
Why this matters for founders
Deeptech and fabless/chip-design founders can tap ISM 2.0's Design Linked Incentive, grant-plus-equity funding, EDA-tool access, and up to 75% R&D cost support by applying through the India Semiconductor Mission (ism.gov.in). Founders building semiconductor equipment, materials, specialty chemicals, or IP cores now have a defined central scheme to co-fund early R&D.
Source: Business Standard
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