The Union Budget 2025 allocated a significant 48 percent increase in funding to the Ministry of Electronics and Information Technology (MeitY), raising the budget to over Rs 26,000 crore.

The budget for the "modified scheme" to establish semiconductor-related facilities -covering compound semiconductors, silicon photonics, sensors, discrete semiconductor fabs, assembly, testing, marking, and packaging (ATMP) facilities, was increased from Rs 2,500 crore in FY25 to Rs 3,900 crore in FY26. Additionally, the allocation for setting up semiconductor fabs rose significantly from Rs 1,200 crore to Rs 2,499.96 crore for FY26. 

The total approved budget for the IndiaAI Mission stands at Rs 10,371.92 crore, with Rs 4,563.36 crore earmarked for building compute capacity featuring over 10,000 GPUs over the next five years. For FY26, another Rs 2,000 crore has been allocated under the previously announced Rs 10,738 crore plan for the IndiaAI Mission. The government also increased funding for the modernisation of the Semiconductor Laboratory in Mohali, a key research and development hub under MeitY, from Rs 11 crore to support its efforts in microelectronics innovation. 

With these strategic allocations, the government aims to bolster India’s semiconductor manufacturing capacity, strengthen its artificial intelligence ecosystem, and promote technological self-reliance.