Critically evaluate the evolution of India's semiconductor policy from the Semicon India Programme to ISM 2.0.

India's chip policy has travelled from a ₹76,000 crore fiscal-support framework announced in 2021 [1] to ISM 2.0's focus on equipment, materials and indigenous design IP [2]. The journey shows genuine institutional learning, but capability still rests at the back end of the value chain.

Achievements of the evolution

• Institutional autonomy: ISM was created as an Independent Business Division within Digital India Corporation, with administrative and financial autonomy — enabling faster approvals than a conventional ministry wing [1].
• Capital mobilisation: 12 manufacturing units with cumulative investment over ₹1.64 lakh crore stand approved; Micron, Kaynes and CG Semi have begun commercial production [3].
• Spatial diffusion: Cabinet clearance for units in Odisha, Punjab and Andhra Pradesh (₹4,600 crore) [4] widened the footprint beyond Gujarat, aiding balanced industrial growth.
• Design ecosystem: The Design Linked Incentive Scheme (₹1,000 crore) has sanctioned 24 chip-design projects and given 95 firms access to industry-grade EDA tools [5].

Persisting weaknesses

• Back-end concentration: Of the 12 approvals, nine are packaging (OSAT) units and only one is a silicon fab [3]. Assembly and testing capture far less technology and value than wafer fabrication.
• Design uptake remains thin: DLI reimburses up to 50% of cost, capped at ₹15 crore, after expenditure [5] — a barrier for cash-poor MSMEs, the scheme's intended beneficiaries.
• Upstream dependence: Lithography tools, ultra-pure chemicals and gases remain imported; self-reliance effectively stops at the factory gate.
• Talent deficit: ISM 2.0's plan to widen support from 315 to 500 academic institutions [2] itself concedes that the manpower pipeline lags plant approvals.

ISM 2.0 is therefore a correctly diagnosed course-correction — targeting equipment and materials manufacturing, full-stack Indian IP and supply-chain resilience [2] — rather than a mere continuation. Its ₹1,000 crore FY 2026-27 provision [2] is, however, modest against the front-end outlay, making sustained funding and talent-building essential. If that depth is delivered, India's stated goal of meeting 70–75% of domestic chip needs by 2029 [3] can anchor genuine technological Atmanirbharta.