Govt raises budget for electronics PLIs, semicon, AI by 84% to ₹18,000 crore

The government has enhanced allocation for key technology projects, including production-linked incentives for mobile phones, IT hardware, semiconductor scheme and IndiaAI Mission, by about 84% to ₹18,000 crore for the next fiscal.

The revised allocation for the key electronic sector project was around ₹9,766 crore in the current financial year, according to the budget documents.

The allocation for IndiaAI Mission has been increased by over 11 times to ₹2,000 crore. The IndiaAI mission is spearheading the development of the country's artificial intelligence ecosystem including providing financial support for compute infrastructure.

The total allocation for the Ministry of Electronics and IT has been raised by about 48% to ₹26,026.25 crore for 2025-26 against ₹17,566.31 crore under the revised allocation for the current fiscal.

The highest allocation of ₹8,885 crore has been made for the production-linked incentive scheme for Large Scale Electronics Manufacturing which focuses on the production of mobile phones. The beneficiaries under the scheme include Apple vendors Foxconn, Tata Electronics, Dixon Technologies, Lava International, etc.

The allocation for semiconductor projects has been more than doubled to ₹2,499.96 crore for 2025-26 from ₹1,200 crore revised allocation for the current fiscal.

The government has received a total investment commitment of ₹1.52 lakh crore for various semiconductor projects.

The union budget has increased allocation for compound semiconductors, sensors, chip assembly, testing and packaging units, etc by 56% to ₹3,900 crore from ₹2,500 crore under the revised allocation for the current fiscal.

In line with the observation of the Economic Survey 2024-25 of low research in the electronics sector, the budget has almost doubled allocation for the design-linked incentive scheme to ₹200 crore from ₹105.46 crore in the revised allocation for the current fiscal.