The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has cleared several projects, including ₹1.27 lakh crore for the second edition of India Semiconductor Mission and ₹62,500 crore for the mobile phone manufacturing scheme (MPMS) as part of efforts to localise manufacturing amid raging West Asian crisis.
The cabinet also accorded approval to two major highway projects worth ₹25,400 crore to ease congestion in Varanasi and as many as nine new gas-based urea plants across the country with a production capacity of 10 million tons.
Semicon Mission 2.0
The cabinet has accorded approval for the ₹1.27 lakh crore for the second edition of India Semiconductor Mission through which the government expects to attract investments of around ₹4 lakh crore and lead to semiconductor production worth ₹2 lakh crore during the scheme period.
The new edition of the semiconductor programme — which has provisions to incentivise even suppliers of raw materials in the chip manufacturing industry, including minerals and gases — has come at an appropriate time when the world is reeling under a memory chip shortage, and companies are working on plans to enhance production capacity. It also expects to attract investment from other chip segments to meet chip requirements for artificial intelligence devices.
Highlighting that “Semicon 2.0 will have six pillars. The first pillar will be the design of chips,”; Mr. Vaishnav said the programme will focus on design, development and production of indigenous chips. “We will be self-reliant in the production of indigenous chips by the end of this programme,” the Minister said.
The government had allocated ₹76,000 crore for the first edition, under which the government had approved 12 projects with cumulative investments of around ₹1.64 lakh crore.
The majority of the investment in the sector has come from domestic technology firm Tata Electronics and its semiconductor arm.
Mobile manufacturing
The cabinet approved an outlay of approved an outlay of ₹62,500 crore for the MPMS, aimed at building Indian brands to achieve technological sovereignty and further scale up local mobile production.
the MPMS scheme also aims to build Indian brands to achieve technological sovereignty, capture significant economic value, and create Indian patents in design and research and development (R&D) .
“The scheme provides incentive support on eligible sales for manufacturing of mobile phones in India at differentiated rates ranging from 2.25% to 5%. Scheme also provides additional incentive of up to 1.5% linked to domestic sourcing of key components/ sub-assemblies. For building Indian brands, an additional incentive @3% on eligible sales for design and R&D of the product,” an official release said.
During the scheme tenure, the cumulative mobile phone production in the country is expected to reach about ₹39 lakh crore with significant increase in exports of mobile phones. The scheme is also expected to generate around 60,000 direct jobs thereby contributing to economic growth, employment generation and strengthening India’s position in global electronics manufacturing hub, the release added.
Highways
The highway projects, to be implemented by the National Highways Authority of India (NHAI) under the Hybrid Annuity Model (HAM), include a 43.218-km corridor linking NH-31 with the Varanasi Ring Road along the Varuna River at a total capital cost of ₹10,998.32 crore and a 46.039-km corridor connecting NH-19 with the ring road along the Ganga River at a cost of ₹14,447.64 crore.
The NH-19 project will feature a six-lane elevated carriageway, a cable-stayed bridge, an extradosed foot over bridge-cum-major bridge, loops, ramps, link roads and service roads. The NH-31 corridor will comprise a predominantly elevated four and six lane carriageway with flyovers, loops, ramps and service roads.
Designed for operating speeds of 80-100 kmph, the projects are expected to significantly reduce travel times across the city. The NH-19 corridor will cut travel time between NH-19 and Kashi Railway Station from around 50 minutes to 25 minutes, while the NH-31 project will halve the journey between NH-31 and Kashi Railway Station from 40 minutes to 20 minutes.
The government said the corridors, part of the Varanasi Decongestion Plan and aligned with the PM Gati Shakti National Master Plan, will improve connectivity to Lal Bahadur Shastri Airport, Ramnagar IWAI Port, Kashi Vishwanath Temple, Banaras Hindu University, Namo Ghat and other major destinations.
The projects are expected to improve logistics efficiency, facilitate tourism and pilgrimage, and support economic growth in eastern Uttar Pradesh.
Urea plants
The cabinet gave approval for a new National Investment Policy for Urea (NIPU-2026) to set up 8-9 new gas-based plants with a production capacity of 10 million tons to make the country self-reliant in the most widely consumed fertiliser.
The new investment framework, which assumes significance as it will encourage new investments in the urea sector, is an extension of the 2012 New Investment Policy (NIP) with revisions.
Briefing the media after the meeting, Information and Broadcasting (I&B) Minister Ashwini Vaishnaw said the urea demand is rising 5% annually and the policy approved today aims to create additional urea capacity of 10 million tons.
The key changes in comparison to NIP-2012 include the separation of fixed and variable costs for greater transparency, the introduction of a viable return on equity (RoE) band with a floor at 12% and a ceiling at 16%, and mitigation of foreign exchange risk through conversion of fixed costs into the rupee after four years based on prevailing exchange rates.
“These measures are estimated to result in savings of over ₹250 crore for each plant established under NIPU-2026 compared to NIP-2012,” the Fertilisers Ministry said in a statement.
The Minister said the country imports around 10 million tons of urea to meet domestic shortages. The annual domestic production is around 30 million tons against the requirement of 40 million tons.
The objective of the new policy is to become self-reliant in urea amid a rise in demand due to a change in cropping pattern, increased sowing area and record production.
“The incentive under the policy will be the same for private, government and cooperative projects,” Mr. Vaishnav said.
Under the 2012 NIP, which expired in October 2019, six new urea units were set up, including four established through joint venture companies of nominated public sector undertaking, and two units by the private companies.
At present, there are 33 operational urea manufacturing units with a total reassessed/installed capacity of 26.94 million tons.
Published – July 15, 2026 10:21 pm IST
