Why in news?
The Ministry of Electronics and Information Technology has reported steady progress under the Design Linked Incentive scheme. Several start‑ups and MSMEs have received support for designing integrated circuits and have tape‑outs scheduled for 2026. The government has reiterated the scheme’s importance for building domestic semiconductor design capability and reducing India’s reliance on imported chips.
Background
Launched in 2021 as part of the wider Semicon India programme, the DLI scheme aims to develop a vibrant ecosystem for semiconductor chip design in India. Unlike manufacturing‑focused incentives, DLI targets the upstream process of creating integrated circuits, processors and system‑on‑chip products. India currently imports most of its chips and lags behind global leaders in semiconductor design. By nurturing domestic design companies, the scheme seeks to reduce import dependence and position India as a hub for high‑value intellectual property.
Eligibility and support
- Eligible entities: Start‑ups, MSMEs and other domestic companies engaged in fabless semiconductor design are eligible. They must be registered in India and not majority owned by foreign entities.
- Product design support: The government reimburses up to 50 % of eligible expenditure on semiconductor product design, capped at ₹15 crore per application. This helps companies cover costs such as software licenses, IP cores, tape‑out and validation.
- Deployment incentives: Companies can claim 6 % of net sales turnover in the first year of commercialisation, declining to 4 % by the fifth year. The incentive is capped at ₹30 crore per application, provided that cumulative net sales reach at least ₹1 crore for start‑ups/MSMEs and ₹5 crore for other firms over five years.
- Design infrastructure support: C‑DAC’s ChipIN Centre in Bengaluru supplies state‑of‑the‑art design tools, EDA software, IP cores and prototyping facilities on a shared basis to participating companies, lowering entry barriers.
Achievements and significance
- Accelerated innovation: The scheme has supported more than 90 start‑ups and MSMEs in developing IP cores and ASICs. Successful tape‑outs and patents demonstrate India’s growing capability in chip design.
- Strategic autonomy: By fostering an indigenous design ecosystem, DLI contributes to supply‑chain resilience and reduces the vulnerability arising from global semiconductor shortages.
- Skills development: Collaboration with academic institutions and industry mentors helps train engineers in advanced chip design tools and methodologies, strengthening human capital.
- Global competitiveness: Creating successful fabless companies can attract investments in wafer fabrication, packaging and testing, helping India move up the value chain.
Sources: Press Information Bureau
