Daily News Analysis ‘Electronics Component Manufacturing Scheme (ECMS) & ISM 2.0’ : 2 February

Why in News: 

• In the Union Budget 2026-27, the Finance Minister announced the launch of the India Semiconductor Mission (ISM) 2.0 and nearly doubled the funding for the Electronics Component Manufacturing Scheme (ECMS) to ₹40,000 crore to deepen India’s electronics value chain.

Key Features and Budget Announcements

• ECMS Expansion (Component Push):
  • Allocation Hike: The budget increased the outlay for ECMS to ₹40,000 crore (up from the initial ~₹22,919 crore launched in April 2025) due to overwhelming industry response (249 applications received).
  • Objective: To move beyond mere assembly (screwdriving) and focus on manufacturing core components like PCBs (Printed Circuit Boards), camera modules, display modules, and passive components (capacitors, resistors).
  • Impact: This aims to increase Domestic Value Addition (DVA) and reduce the heavy import bill for electronic intermediates.
• India Semiconductor Mission (ISM) 2.0:
  • Strategic Shift: While ISM 1.0 focused on establishing foundational Fabs (fabrication units), ISM 2.0 expands the focus to the broader ecosystem: Equipment and Materials.
  • Core Pillars:
    • Materials & Chemicals: Promoting domestic production of specialized gases, chemicals, and raw materials required for chip making.
    • Equipment Manufacturing: Incentivizing the production of semiconductor manufacturing tools and machinery within India.
    • Indian IP: Developing “Full-stack Indian Intellectual Property (IP)” and design capabilities.
• Budget Support: An initial provision of ₹1,000 crore has been set aside specifically for ISM 2.0 in FY 2026-27.