India’s Semiconductor Push: New Consortium Targets ISM 2.0 Implementation

What Happened

The Startup Policy Forum (SPF) has officially launched The Semicon Consortium, a strategic alliance designed to integrate semiconductor startups, venture capital investors, and global technology players into the broader framework of the India Semiconductor Mission (ISM) 2.0. This announcement, which occurred just days after the Union Cabinet approved the second phase of the mission on July 15, 2026, aims to establish a permanent platform for industry-government dialogue.

The launch was formalized during a high-level roundtable titled Semicon Baatcheet, which was chaired by S. Krishnan, Secretary of the Ministry of Electronics and Information Technology (MeitY). The event served as a critical venue for stakeholders to deliberate on the operationalization of the ISM 2.0, which boasts a substantial fiscal outlay of INR 1,27,500 crore. This funding represents a significant escalation in government commitment, approximately 68 percent larger than the initial allocation provided under ISM 1.0 in 2021.

Key Details

The Semicon Consortium is structured to address the specific needs of the startup ecosystem, which often faces different hurdles than large-scale manufacturing entities. By creating a dedicated channel for policy input, the consortium intends to ensure that the implementation of ISM 2.0 is both practical and effective. The roundtable featured a diverse group of participants, including:

• Semiconductor Startups: Agrani Labs, Agnit Semiconductors, Incore Semiconductors, Mantra Semiconductor, Photonsilica, and Bharat Semi.
• Venture Capital Firms: Bessemer Venture Partners, Speciale Invest, Elevation Capital, and Iron Pillar.
• Global Industry Leaders: AMD, Intel, and Ericsson.

During the discussions, participants identified several priority areas required to catalyze the domestic semiconductor industry. These priorities include the deployment of patient capital, the refinement of government co-investment models, the strengthening of talent pipelines, and the improvement of access to shared infrastructure. Furthermore, the group emphasized the need for strategic public procurement to generate demand for domestically produced chips and the simplification of operational guidelines to facilitate scaling.

Context

The launch of The Semicon Consortium arrives at a juncture where India is attempting to transition from a consumer of semiconductor technology to a significant contributor to the global supply chain. The first iteration of the India Semiconductor Mission established the foundational infrastructure, but stakeholders have frequently pointed to the need for more granular support for the startup layer of the ecosystem.

At the roundtable, the Startup Policy Forum and Speciale Invest released a joint report titled India's Semiconductor Startup Landscape 2026. This document maps the current state of the industry, identifying specific opportunities in chip design, materials science, manufacturing technologies, and packaging. The report serves as a baseline for the consortium’s future policy recommendations, which are being developed in collaboration with knowledge partner Ikigai Law.

"India's semiconductor journey requires strong partnerships between government, industry, startups, academia and investors. As we implement ISM 2.0, our objective is to build an ecosystem that rewards innovation, accelerates commercialisation and creates globally competitive semiconductor capabilities. Structured industry engagement such as today's discussion plays an important role in ensuring that policy design remains grounded in practical realities," stated S. Krishnan, Secretary, MeitY.

Why It Matters

The shift toward ISM 2.0 reflects a maturation of the government's strategy. While the initial phase was heavily focused on attracting large-scale fabrication units, the current phase acknowledges that long-term sustainability requires a robust pipeline of intellectual property (IP), material science breakthroughs, and next-generation design capabilities.

Startups are the primary engine for this specialized innovation. However, they face unique challenges, such as long development cycles and high capital expenditure requirements. By institutionalizing the engagement between these startups and government policymakers, The Semicon Consortium aims to mitigate these risks. The consortium provides a mechanism for evidence-based policymaking, ensuring that the INR 1,27,500 crore outlay is not just distributed as subsidies, but is deployed to solve specific bottlenecks in the value chain.

Shweta Rajpal Kohli, President & CEO of the Startup Policy Forum, noted the necessity of this approach:

*"India's semiconductor ambitions will ultimately be realised not only through large manufacturing investments, but also through a thriving ecosystem of startups building intellectual property, equipment, materials and next-generation technologies. As ISM 2.0 enters its implementation phase, sustained dialogue between government, startups and investors will be essential to ensure that policy translates into globally competitive businesses."

Bottom Line

The formation of The Semicon Consortium signals a shift toward a more collaborative industrial policy in India. By bringing together the disparate elements of the semiconductor value chain—from venture capital firms looking for long-term returns to government officials managing large-scale fiscal outlays—the consortium creates a feedback loop that is intended to refine the implementation of ISM 2.0.

As the consortium operationalizes over the coming weeks, its success will be measured by its ability to translate high-level policy objectives into actionable guidelines that lower the barrier to entry for domestic startups. If successful, this could create a self-sustaining cycle of innovation, reducing India's reliance on foreign technology and positioning the country as a key node in the global semiconductor landscape. The upcoming policy recommendations from the SPF and Ikigai Law will be the first test of whether this collaborative model can effectively influence the trajectory of the nation's semiconductor ambitions.

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