Government Amplifies Budget for Electronics, Semiconductors & AI, Boosting Allocation to Rs 18,000 Crore

• Chinmay
• February 3, 2025
• News
• Budget 2025, Dixon Technologies, Electronics Budget, Foxconn, Government Technology Investment, IndiaAI Mission, IT Hardware, Lava International, Ministry of Electronics and IT, Mobile Phone Manufacturing, Production-Linked Incentives, Semiconductor Budget, Tata Electronics
• 0 Comments

In a significant move for the technology sector, the government has raised the allocation for key technology projects—including production-linked incentives for mobile phones, IT hardware, semiconductor schemes, and the IndiaAI Mission—by approximately 84% to Rs 18,000 crore for the next fiscal year.

According to budget documents, the current financial year’s allocation for the key electronic sector project stood at about Rs 9,766 crore. Notably, the IndiaAI Mission, which is pivotal in advancing the nation’s artificial intelligence ecosystem by providing crucial support for compute infrastructure, has seen its allocation surge over 11 times to reach Rs 2,000 crore.

Overall, the Ministry of Electronics and IT’s budget has been increased by nearly 48%, rising from Rs 17,566.31 crore in the current fiscal to Rs 26,026.25 crore for 2025-26. The highest funding of Rs 8,885 crore is earmarked for the production-linked incentive scheme aimed at Large Scale Electronics Manufacturing, with a strong focus on mobile phone production. Beneficiaries of this scheme include prominent Apple vendors such as Foxconn, Tata Electronics, Dixon Technologies, and Lava International.

The semiconductor sector has also received a robust boost, with its allocation more than doubling to Rs 2,499.96 crore for 2025-26, up from Rs 1,200 crore in the current revised allocation. This comes on the back of a total investment commitment of Rs 1.52 lakh crore for various semiconductor projects.

Additionally, the budget for compound semiconductors, sensors, chip assembly, testing, and packaging units has been raised by 56%, from Rs 2,500 crore to Rs 3,900 crore. In response to the Economic Survey 2024-25’s observations on the low research spending in the electronics sector, the allocation for the design-linked incentive scheme has almost doubled from Rs 105.46 crore to Rs 200 crore.

This comprehensive budget boost underscores the government’s commitment to strengthening India’s position in electronics manufacturing, semiconductor development, and artificial intelligence innovation, paving the way for accelerated growth in these critical technology domains.