The Indian government has clarified that its Semicon 2.0 policy will not impose a cap on equity-linked incentives for domestic chipmakers, a move designed to attract large-scale private investment in advanced semiconductor design.
The Information Technology Secretary confirmed that firms can receive support through grants, equity stakes, or royalty-based payments, removing previous ambiguities that had constrained capital deployment in the sector.
This clarification is critical for the execution of the India Semiconductor Mission (ISM) 2.0, which was recently approved with a budget of approximately ₹1.25 lakh crore (around $15 billion).
By allowing flexible equity structures, the government aims to de-risk capital-intensive projects for Indian companies seeking to develop cutting-edge technologies, including artificial intelligence chips.
The policy shift signals a more aggressive stance on building indigenous semiconductor capabilities, moving beyond simple manufacturing subsidies to foster a comprehensive design ecosystem.
The move comes as global supply chains continue to diversify away from concentrated production hubs.