Cabinet Approves Schemes For Semiconductors, Mobile Manufacturing And Urea

The Union Cabinet has cleared three major policy measures covering Semiconductor Mission 2.0, mobile phone manufacturing and urea production, with the combined aim of strengthening domestic manufacturing and reducing India's dependence on imports.

The decisions include a ₹1.28 lakh crore outlay for the second phase of the semiconductor mission, a ₹62,500 crore mobile manufacturing scheme and a new investment policy for the urea sector.

What Is Semiconductor Mission 2.0?

The government has decided to extend the semiconductor mission from five years to 12 years, giving investors a much longer period to plan their long-term projects. With 1.28 lakh crores, the second phase of the Semiconductor Mission 2.0 has been allocated much more funds, which is almost triple of the first phase amount.

The second phase will cover the wider chip ecosystem, including design, fabrication and packaging. It will also focus on domestic manufacturing of semiconductor equipment and materials, along with the development of Indian intellectual property.

Under the first phase, the government approved 12 semiconductor projects with a combined investment pipeline of around ₹1.64 lakh crore. These included one semiconductor fabrication unit, two compound semiconductor fabrication units and nine packaging facilities.

What Is The New Mobile Manufacturing Scheme?

The Cabinet has also approved the Mobile Manufacturing Scheme, which will run for five years from FY27 to FY31 with an outlay of ₹62,500 crore. The government expects the programme to generate cumulative mobile phone production worth ₹39 lakh crore, exports of ₹15 lakh crore and around 60,000 direct jobs.

Manufacturers will receive incentives ranging from 2.25% to 5% on eligible mobile phone sales. Companies that increase domestic sourcing of components and sub-assemblies can receive an additional incentive of up to 1.5%. Indian brands will also be eligible for an additional 3% incentive linked to product design and research and development.

The scheme will replace the mobile phone PLI programme launched in 2020 and is expected to be notified within 20 days.

What Is The New Urea Policy?

The Cabinet has also greenlit a new policy on urea investment with the goal of boosting production in the country and cutting down on imports. India is currently facing an almost 10 million tonnes shortfall annually. Moreover, the government has sanctioned the continuation of the urea subsidy beyond the current financial year.

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