India's $22bn tech push lifts Cyient DLM, Dixon shares
India approved a $22 billion semiconductor and mobile phone manufacturing package, sending electronics stocks higher as the government targets a major expansion in tech exports.
The Indian government approved a ₹1.9 lakh crore ($22 billion) package for semiconductor and mobile phone manufacturing, triggering a sharp rally in electronics manufacturing services (EMS) stocks. Cyient DLM climbed as much as 7.4% to ₹578.35, while Dixon Technologies and PG Electroplast gained up to 5%.
The Union Cabinet allocated ₹1.27 lakh crore for the Semicon 2.0 programme and ₹62,500 crore for a new Mobile Phone Manufacturing Scheme (MPMS). Electronics and Information Technology Minister Ashwini Vaishnaw confirmed the approvals, noting the tech package is part of a broader ₹2.19 lakh crore infrastructure and industrial investment rollout.
Semicon 2.0 expands on India's initial chip mission by targeting the full supply chain, from design and fabrication equipment to advanced packaging, testing, research, and talent development. A key policy goal is boosting the domestic manufacturing of chips that are both designed and owned by Indian companies.
The government projects the programme will attract ₹4 lakh crore in private investment and generate ₹2 lakh crore in semiconductor production. India is also projected to export chips valued at about ₹1 lakh crore.
Notably, New Delhi is shifting how it distributes subsidies. Instead of straight grants, companies will receive incentives as grants against equity or through royalty-linked funding. The government also reduced direct capital support for new facilities, lowering subsidies from 50% to 40% for silicon fabs and to 35% for other types.
This structural change demands greater private capital commitment but aligns with a maturing industry lifecycle. For investors, it signals a transition from seed-stage subsidies to commercial-scale deployment.
The MPMS provides production-linked incentives for five years starting in fiscal 2026-27. The policy is designed to increase local value addition and scale exports significantly.
"We expect to more than double the export of mobile phones to around ₹15 lakh crore under the new scheme from around ₹7.5 lakh crore under the previous scheme," Vaishnaw said.
For EMS operators, these schemes represent a multi-year revenue runway as global tech giants diversify their supply chains. The immediate stock gains reflect market confidence that domestic contract manufacturers will capture a growing share of global hardware assembly as New Delhi bankrolls the underlying component ecosystem.
