Indian Information Technology Sector: Investment Opportunities in the Semiconductor and AI Revolution

Bottom Line

The Government of India has demonstrated a solid policy and financial commitment to becoming a global leader in the semiconductor and AI sectors. Investors should increase their exposure to companies involved in semiconductor manufacturing, design, and supply chains, as well as AI-enabled IT service firms.

Key Developments

1. Announcement of India Semiconductor Mission 2.0 in Budget 2026 — Finance Minister Nirmala Sitharaman announced the launch of the India Semiconductor Mission (ISM) 2.0 with an outlay of ₹40,000 crore, aimed at strengthening the domestic semiconductor ecosystem and establishing the country as a global hub. Portfolio implication: Consider increasing direct investments in companies involved in semiconductor manufacturing and supply chains, such as Kaynes Technology, MosChip Technology, and CG Power.

2. PM Modi's Meeting with CEOs of Major IT Companies — Prime Minister Narendra Modi convened a meeting with the Chief Executive Officers of major Indian IT companies such as HCL Tech, TCS, and Wipro,