India's Semiconductor Design Incentive Scheme

Design Linked Incentive Scheme (DLI) Overview

• Objective: Boost India's semiconductor design ecosystem via the DLI scheme under the Semicon India program, initiated by the Ministry of Electronics and Information Technology (MeitY).

Key Features

• Contributions:

  • Semiconductor design drives 50% value addition, reduces bill of materials costs by 20-50%, and contributes 30-35% to global semiconductor sales via the fabless segment.
  • Targeted sectors include video surveillance, drone detection, energy metering, microprocessors, satellite communication, and IoT SoC.

• Growth Metrics:

  • 24 DLI-supported projects have shown rapid growth in design initiatives.
  • Outputs include 16 tape-outs, 6 ASIC chips, and 10 patents, employing over 1,000 engineers while leveraging over three times the private investment.

Significance of Semiconductors

• Semiconductors are vital across healthcare, transport, communication, defense, space, and emerging digital infrastructures.
• The global demand for semiconductor chips is rising due to rapid digitization and automation.

Challenges & Strategic Importance

• Global semiconductor manufacturing is limited to a few regions, creating a fragile supply chain vulnerable to disruptions.
• India aims to become a trusted partner in the global semiconductor landscape while reducing dependency on imported core technologies.

DLI Scheme Structure

• Eligibility: Startups, MSMEs, and domestic companies engaged in semiconductor design can access financial incentives and infrastructure support.
• Support Details:
  • Financial Incentives: Up to 50% of eligible expenditure on design-based projects, capped at INR 15 crores per application.
  • Sales Incentives: Between 4-6% over five years based on turnover, up to INR 30 crores.
• Infrastructure: Establishment of support structures such as the ChipIn Center, which provides centralized access to Electronic Design Automation (EDA) tools, IP core repositories, and prototyping assistance.

Institutional Framework

• MeitY's Role: Leads national semiconductor initiatives, implementing the DLI and coordinating public-private partnerships.
• Semicon India Program (SIM): With a budget of INR 76,000 crores, supports semiconductor manufacturing and design ecosystem investments.
• Chip-to-Startup Program: Focuses on developing a skilled workforce for the semiconductor industry.

Achievements

• The DLI scheme has facilitated 24 chip design projects, enhanced access to EDA tools for 95 companies, leading to significant reductions in design and infrastructure costs.
• Successful projects have been documented from companies like VerveSemi Microelectronics (developing consumer goods applications) and InCore Semiconductors (developing indigenous microprocessor designs).
• As of January 2026, DLI-supported startups have logged over 54 lakh hours of tool usage within India's chip design infrastructure.

Future Prospects

• The DLI scheme aims to establish India as a global hub in semiconductor design, emphasizing self-reliance and reducing reliance on imports.
• Increasing the domestic semiconductor ecosystem's capabilities is expected to enhance India's socio-economic resilience against geopolitical and supply chain disruptions.

Conclusion

The DLI scheme plays a crucial role in establishing a competitive semiconductor landscape in India, focusing on innovation through design, enhancing indigenous capabilities, and ensuring a sustainable and resilient electronic ecosystem. This initiative is integral to fulfilling India’s goals for advanced technology and economic growth in the global semiconductor space. The burgeoning semiconductor design ecosystem will enable India to emerge as a strategic player on the world stage while advancing self-reliance and sustainable economic development.