NEW DELHI
A major push to strengthen India’s manufacturing ecosystem, technology capabilities and infrastructure network, the Union Cabinet on Wednesday approved several key projects with a combined investment of approximately ₹2.19 lakh crore, including flagship initiatives for semiconductor manufacturing, mobile phone production, railway expansion, fertilizer self-sufficiency and highway connectivity in Uttar Pradesh.
Among the most significant decisions was the approval of Semicon 2.0, a flagship programme with an outlay of ₹1.27 lakh crore aimed at strengthening India’s semiconductor design and manufacturing ecosystem. The initiative seeks to build on the progress achieved under the India Semiconductor Mission by promoting chip design, fabrication facilities, advanced packaging, research and development, manufacturing equipment, raw materials and skilled workforce development.
The government noted that Semicon 2.0 follows the success of Semicon 1.0, under which 12 semiconductor manufacturing projects with investments exceeding ₹1.64 lakh crore have already been approved, with three units commencing commercial production. The new programme is expected to position India as a global semiconductor hub while improving supply chain resilience and advancing technological self-reliance.
The Cabinet also approved the Mobile Phone Manufacturing Scheme (MPMS) with a financial outlay of ₹62,500 crore. Scheduled to run from FY2026-27 to FY2030-31, the scheme provides production-linked incentives ranging from 2.25% to 5% on eligible sales, along with additional incentives for domestic sourcing of components and investments in product design and research.
According to the government, the scheme is projected to generate mobile phone production worth nearly ₹39 lakh crore over five years and create around 60,000 direct jobs. It also aims to strengthen domestic value addition, promote Indian mobile phone brands and boost exports. India already manufactures over 99% of the mobile phones consumed in the country and has emerged as the world’s second-largest mobile phone producer by volume.
To reduce import dependence and enhance fertilizer security, the Cabinet cleared the National Investment Policy for Urea-2026 (NIPU-2026). The revised policy is designed to encourage investment in new gas-based urea manufacturing plants by introducing a more transparent financial framework, improved returns for investors and mechanisms to mitigate foreign exchange risks.
Officials said the policy is expected to generate savings of more than ₹250 crore per plant compared to the earlier investment policy while helping India move closer to self-sufficiency in urea production. The country currently has 33 operational urea manufacturing units, but domestic production continues to fall short of demand, necessitating imports.
The Cabinet also sanctioned two railway capacity enhancement projects worth ₹3,907 crore, covering the doubling of the Paradeep-Haridaspur rail section and the construction of a fourth railway line between Rajkharsawan and Dangoaposi. Spread across Odisha and Jharkhand, the projects will add nearly 145 kilometres to the railway network, improve freight movement, connect more than 1,500 villages, and facilitate the transportation of key minerals such as coal and iron ore while reducing logistics costs and carbon emissions.
Similarly, Varanasi also received a major infrastructure boost, with the Cabinet approving two highway projects worth over ₹25,400 crore to ease traffic congestion and improve connectivity. The first, a ₹14,447.64-crore 46-km elevated Ganga Corridor connecting NH-19 with the Varanasi Ring Road, is expected to reduce travel time across the city from 60 minutes to 20 minutes while enhancing access to key religious and transport hubs. The second project, costing ₹10,998.32 crore, involves a 43-km elevated corridor linking NH-31 with the Varanasi Ring Road along the River Varuna. It is expected to halve travel time between NH-31 and Kashi Railway Station while improving connectivity with airports, railways, inland waterways and industrial corridors across eastern Uttar Pradesh.
The Cabinet said the approvals are intended to accelerate economic growth by expanding strategic manufacturing capabilities, strengthening transport infrastructure and promoting industrial development. Collectively, the projects are expected to advance the government’s flagship initiatives, including Make in India, Atmanirbhar Bharat and PM Gati Shakti, while reinforcing India’s ambition to emerge as a global manufacturing and logistics powerhouse.
