Lack of big announcements worries electronics and semiconductor industry

Industry is seeking more clarity on the lack of announcements in the semiconductor and electronics sector

The electronics and semiconductor industry in India has welcomed the Budget 2025-26 but lack of major incentives such as production-linked incentives (PLI) not being extended to component manufacturing has caused disappointment.

According to India Electronics and Semiconductor Association (IESA) president Ashok Chandak, the budget includes indirect benefits for various sectors but key demands related to semiconductor manufacturing expansion have not been fully addressed.

"The budget lacks to provide clarity on India Semiconductor Mission 2.0 (ISM 2.0) (incentives beyond the $10 billion mark) and does not introduce a major PLI scheme for components or a dedicated product creation initiative as a growth driver," Chandak said in a statement.

"This could potentially slow the pace of value addition in India's electronics ecosystem. We remain optimistic that these aspects will be addressed through specific policy measures beyond the Budget announcement," he added.

Finance Minister Sitharaman announced a significant 48 percent hike in the FY26 allocation for the Ministry of Electronics and Information Technology (MeitY). The ministry is responsible for key schemes in the electronics manufacturing and semiconductor ecosystem, and the funds available have increased to Rs 26,026.25 crore.

Most of the increased allocation for MeitY is reflected in several IT-specific programmes such as the IndiaAI Mission, semiconductor development, PLI schemes for large-scale electronics manufacturing, and IT hardware.