Sun Feb 01 05:30:00 UTC 2026: # Indian Chipmaker Stocks Surge Following Budget Announcement of Semiconductor Incentives

The Story

Indian stocks in the semiconductor and electronic components manufacturing sectors experienced a significant surge following Finance Minister Nirmala Sitharaman’s budget announcement. The budget included an increase in the EMS PLI (Electronic Manufacturing Services Production-Linked Incentive) to ₹40,000 crore, the establishment of rare earth mineral corridors in Tamil Nadu, Kerala, and Andhra Pradesh, and a ₹40,000 crore support package for the semiconductor industry. This initiative aims to reduce reliance on China and bolster domestic manufacturing capabilities.

The government is also initiating the BioPharma Shakti Yojana to establish India as a global biopharma manufacturing hub and is soon launching the India Semiconductor Mission (ISM) 2.0. The allocation for the electronic component manufacturing scheme will be increased to ₹40,000 crore. Dedicated rare earth corridors will be created in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.

Key Points

  • EMS PLI is proposed to be increased to ₹40,000 crore.
  • Rare earth mineral corridors will be established in Tamil Nadu, Kerala, and Andhra Pradesh.
  • A ₹40,000 crore support package is allocated for the semiconductor industry.
  • The government aims to reduce reliance on China in the semiconductor sector.
  • Shares of Sirma SGS Technology Limited, Dixon Technologies (India) Limited, and other companies surged by up to 7% following the announcement.

Key Takeaways

  • The Indian government is making a substantial investment in the semiconductor and electronic component manufacturing sectors.
  • The focus is on reducing dependence on foreign sources, particularly China, for crucial components.
  • The market has reacted positively to the budget announcements, signaling investor confidence in the government’s strategy.
  • The development of rare earth mineral corridors and the BioPharma Shakti Yojana indicates a broader strategy to boost manufacturing and innovation across multiple sectors.
  • The India Semiconductor Mission (ISM) 2.0 is poised to play a crucial role in executing the government’s vision for the semiconductor industry.

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