Context- Semiconductor chips are critical for healthcare, transport, communications, defence, space, AI, and digital infrastructure. Global demand is rising rapidly due to digitalisation and automation.
However, Semiconductor manufacturing is concentrated in a few geographies, making global supply chains fragile and disruption-prone. India aims to emerge as a strategic, reliable semiconductor hub through- Semicon India Programme and India Semiconductor Mission (ISM).
What is the Strategic Importance of Fabless Chip Design?
Fabless semiconductor design represents the highest-value segment of the semiconductor value chain. Fabless semiconductor design represents the highest-value segment of the semiconductor value chain.
A robust fabless model offers the following advantages:
- High value addition
- Lower capital expenditure compared to fabs
- Ownership of IP
- Reduced imports
- Attraction of manufacturing
- Long-term technological leadership
What is the Design Linked Incentive (DLI) Scheme?
It was launched in December 2021 under the Semicon India Programme. It is implemented by MeitY, with C-DAC as the nodal agency.
Its objective is to build a self-reliant, indigenous semiconductor design ecosystem and support startups and MSMEs from idea to silicon to productisation.
Eligibility under DLI Scheme- Startups (as per DPIIT, 2019), MSMEs (as per MSME Ministry notification, 2020) and Domestic companies owned by resident Indian citizens (FDI Policy, 2017).
Scope of support covers the full design lifecycle of Integrated Circuits (ICs), Chipsets, Systems-on-Chip (SoCs) and Systems and IP cores.
DLI aims to – Increase indigenous semiconductor content, Reduce import dependence, and Strengthen supply-chain resilience.
Financial Incentives under DLI
| Product Design Linked Incentive | Reimbursement up to 50% of eligible expenditure Cap: ₹15 crore per application Applicable to ICs, chipsets, SoCs, systems, and IP cores |
|
Deployment Linked Incentive | Incentive of 6%–4% of net sales turnover for 5 years Cap: ₹30 crore per application Minimum cumulative net sales (Years 1–5): ₹1 crore for startups/MSMEs and ₹5 crore for other domestic companies Design must be successfully deployed in electronic products |
What are the Institutional Frameworks Supporting Semiconductor Design?
|
Ministry of Electronics and IT (MeitY) | ● Policy leadership and coordination ● Anchors national semiconductor initiatives ● Introduced DLI to help Indian firms move up the value chain |
| Semicon India Programme (SIM)
| ● Total outlay: ₹76,000 crore ● Supports manufacturing, design, and display ecosystems ● Provides end-to-end support from design to productisation |
| Chips to Startup (C2S) Programme
| ● Capacity-building initiative across academic institutions ● Target: 85,000 industry-ready professionals ● Covers B.Tech, M.Tech, and PhD levels in chip design |
| Microprocessor Development Programme | ● Implemented by C-DAC, IIT Madras, IIT Bombay ● Delivered indigenous open-source processors: VEGA, SHAKTI and AJIT ● Strengthens self-reliance in CPU architectures |
What are the success stories under the DLI Scheme?
24 chip-design projects sanctioned (e.g., video surveillance, drones, energy meters, microprocessors, satellite communications, IoT SoCs). 95 companies provided access to industry-grade EDA tools
Notable Beneficiaries
Vervesemi Microelectronics- 110+ IPs, 25 IC variants, 10 patents. Motor-control chips for consumer appliances and EVs. Pilot-lot sampling completed; global customers engaged
InCore Semiconductors- Indigenous RISC-V processor IPs. Silicon-proven across 180 nm to 16 nm nodes. Targeting entry-level smartphones and edge AI.
Netrasemi- Designed India’s first indigenous AI SoC at 12 nm. Applications in surveillance, robotics, drones. Strong VC backing; multiple tape-outs planned.
Conclusion
There has been a Strategic Impact of the DLI Scheme. It anchors India in the most value-intensive segment of semiconductors design, reduces dependence on imported IPs and chips and enhances resilience against geopolitical and supply-chain disruptions.
With silicon-validated designs moving toward mass manufacturing and deployment, India is emerging as a credible global semiconductor design player and strengthening its self-reliant ecosystem.
Source: PIB
