Design Linked Incentive(DLI) Scheme: IT Ministry seeks applications from domestic companies

What is the News?

The Ministry of Electronics and Information Technology has invited applications from 100 domestic companies, micro, small and medium enterprises (MSMEs) as well as startups for incentives under the design linked incentive (DLI) scheme.

What is a Design Linked Incentive Scheme(DLI)?

Aim: To create a vibrant ecosystem for Semiconductor Chip Design in the country.

Target: To nurture at least 20 domestic companies involved in semiconductor design and facilitate them to achieve a turnover of more than ₹1500 Crore in the next 5 years.

Nodal Agency: C-DAC (Centre for Development of Advanced Computing)

Eligibility: Financial incentives and design infrastructure support will be extended to domestic companies, startups and MSMEs engaged in semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design for over a period of 5 years.

Components: The scheme has three components:

– Chip Design infrastructure support: C-DAC will set up the India Chip Centre to host the state-of-the-art design infrastructure (viz. EDA Tools, IP Cores and support for MPW (Multi Project Wafer fabrication) & post-silicon validation) and facilitate its access to supported companies.

– Product Design Linked Incentive: Under this, reimbursement of up to 50% of the eligible expenditure subject to a ceiling of ₹15 Crore per application will be provided as a fiscal support to the approved applicants who are engaged in semiconductor design.

– Deployment Linked Incentive: Under this, an incentive of 6% to 4% of net sales turnover over 5 years subject to a ceiling of ₹30 Crore per application will be provided to approved applicants whose semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design are deployed in electronic products.

The approved applicants that claim incentives under the scheme will be encouraged to retain their domestic status (i.e., more than 50% of the capital in it is beneficially owned by resident Indian citizens and/ or Indian companies, which are ultimately owned and controlled by resident Indian citizens) for a period of three years after claiming incentives under the scheme.

Source: This post is based on the articles:

‘DLI scheme: IT Ministry seeks applications from domestic companies’ published in Indian Express on 17th January 2022.

‘Applications invited under the Design Linked Incentive (DLI) Scheme from domestic semiconductor chip design firms’ published in PIB on 17th January 2022.