India Industrials: ISM 2, MPMS & 10-yr road map

Research evidence excerpt

India Industrials: ISM 2, MPMS & 10-yr road map

Update

July 16, 2026 05:41 AM GMT

Morgan Stanley India Company Private Limited+MIndia Industrials | Asia Pacific Girish Achhipalia

Equity Analyst

ISM 2, MPMS & 10-yr road map Girish.Achhipalia@morganstanley.comParth Karia +91 22 6118-1124

Research Associate

Parth.Karia@morganstanley.com +91 22 6118-1036

The cabinet has approved ISM 2.0 with an outlay of Rs1.27trn

and Mobile Phone Manufacturing Scheme with an outlay of

Rs625bn. Niti Aayog has also released a 10-year road map for

semiconductors in India.

India Industrials

Key Takeaways Asia Pacific

Industry View In-Line

Semis & electronic thrust: Approvals for ISM 2.0 (Rs1.27tn) & Mobile Scheme 2.0

(Rs625bn)

Sharper instruments: grants + equity for design, flat 30% for equipment,

materials, chemicals & gases

ISM (1.0+2.0): Investment Rs4trn, production Rs2trn & exports: Rs1trn

Phase I: 12 projects approved, investment of >Rs1.6trn & 3 plants commenced

production

Playbook stays selective: mature-node, packaging, materials, design; not leading-

edge logic

ISM 2.0 (India Semiconductor Mission) is not a scale-up, but is focussed on import-

dependent materials, thin design IP, & equipment ecosystem. The outlay is deployed

across six pillars:

1. Design: build on 105 startups in chip design; deepen IP ownership across

strategic & commercial products, positioning India as a chip-design IP nation.

2. Machines & materials: incentives for domestic manufacturing and R&D of

semi equipment, chemicals & gases; push for precision-manufacturing

upstream.

3. Fabs: attract silicon, compound semiconductor, discrete component &

display fabs; first fab likely by 2028.

4. ATMP/OSAT: Deepen ISM 1.0 to bring advanced packaging tech (not just

conventional OSAT).

5.