Semiconductor, electronics stocks rally after Cabinet clears Rs 1.9 lakh crore manufacturing push

The announcement are aimed at strengthening India's semiconductor and electronics manufacturing ecosystem.

Cyient DLM surged 7.49%, Dixon Technologies (India) advanced 6.15%, PG Electroplast gained 2.60%, Kaynes Technology India rose 2.51%, while Syrma SGS Technology added 1.14%.

The rally reflected investor optimism that the new policy measures could accelerate investments in semiconductor manufacturing, electronics production and localisation of critical components, benefiting companies across the electronics manufacturing services (EMS) value chain.

The Cabinet approved Semicon 2.0 with an outlay of Rs 1,27,500 crore, extending the government's long-term support for semiconductor manufacturing. The programme covers the entire semiconductor value chain, including chip design, fabrication facilities, packaging and testing units, manufacturing equipment, raw materials, research and development, and skill development.

Unlike the first phase, the new programme broadens incentives to manufacturers of semiconductor equipment, specialty chemicals, gases and materials, with the objective of developing a self-reliant semiconductor ecosystem and reducing dependence on imports.

The government said the first phase of the India Semiconductor Mission has already approved 12 manufacturing projects involving investments of more than Rs 1.64 lakh crore. These include one silicon fabrication plant, one silicon carbide fab, an integrated gallium nitride Micro LED display fab and nine semiconductor packaging facilities. Commercial production has already commenced at units operated by Micron, Kaynes and CG Semi, while the country's first silicon fabrication plant is expected to become operational in 2028.

Separately, the Cabinet cleared the Mobile Phone Manufacturing Scheme (MPMS) with a budgetary outlay of Rs 62,500 crore. The five-year programme will provide production-linked incentives ranging from 2.25% to 5% on eligible mobile phone sales, with additional incentives for companies increasing domestic sourcing of components and investing in product design and research.

The scheme succeeds the earlier Production Linked Incentive (PLI) programme for large-scale electronics manufacturing, which ended in March 2026. The government expects it to help generate mobile phone production worth around Rs 39 lakh crore over five years, create nearly 60,000 direct jobs, deepen domestic value addition and further strengthen India's position as a global electronics manufacturing hub.