Finance Minister Nirmala Sitharaman’s Union Budget 2026-27 marks a strategic inflection point in India’s technology ambitions. Unlike previous budgets focused on attracting assembly operations, this one targets indigenous capability across the entire value chain — from raw materials to intellectual property. In an era of supply chain fragmentation and technological nationalism, the budget positions India not as a low-cost alternative, but as a strategic technology partner.

The cynosure is India Semiconductor Mission (ISM) 2.0, with an Rs 8,000-crore allocation that signals evolved policy thinking. While ISM 1.0 focused on fabrication facilities, the new iteration targets the less glamorous but critical infrastructure: Equipment manufacturing, materials production, and IP development.
This addresses a fundamental gap. India currently imports nearly 100 per cent of its semiconductor manufacturing equipment and materials, which undermines long-term competitiveness. The expanded mission recognises that sustainable semiconductor ecosystems require more than chip factories. Taiwan’s dominance wasn’t built on fabs alone, but on vertically integrated capabilities from design tools to testing equipment.

Link: https://indianexpress.com/article/opinion/columns/budget-2026-india-tech-ai-semiconductor-rare-earths-10511370/