India’s bold entry into the global semiconductor landscape finds strong backing with the Design Linked Incentive Scheme (DLI), a visionary initiative by the Government of India. As part of India’s semiconductor mission, the DLI scheme is designed to catalyze innovation in chip design and help position India as a global hub for electronic system design.
What is the Design Linked Incentive Scheme (DLI)?
Launched in December 2021, the Design Linked Incentive Scheme (DLI) provides targeted financial incentives and infrastructure support for domestic companies and startups involved in semiconductor design. This is a flagship initiative under the broader India Semiconductor Mission (ISM), which aims to build a robust semiconductor ecosystem in the country.
The scheme’s focus is on encouraging the development of integrated circuits (ICs), chipsets, system-on-chips (SoCs), and other semiconductor IPs.
Objective of the Design Linked Incentive Scheme (DLI)
The primary goals of the Design Linked Incentive Scheme (DLI) are:
- Promote indigenous design and reduce dependency on foreign technologies.
- Empower design startups and MSMEs with technical and financial resources.
- Create a pipeline of semiconductor designers and engineers in India.
- Generate employment and encourage R&D in advanced technologies.
Key Features of the DLI Scheme
The Design Linked Incentive Scheme (DLI) offers support through three major components:
1. Chip Design Infrastructure Support
Eligible startups and companies get access to state-of-the-art EDA tools, IPs, foundry services, and cloud infrastructure at highly subsidized rates through C-DAC.
2. Product Design Linked Incentive
Reimbursement of up to 50% of eligible expenditures incurred on designing semiconductor products, subject to a ceiling of ₹15 crore per applicant.
3. Deployment Linked Incentive
Incentives of 6% to 4% of net sales turnover over five years, to companies whose designs are deployed in electronic products within domestic or global markets.
Eligibility Criteria
To qualify under the Design Linked Incentive Scheme (DLI):
- The applicant must be a domestic company or startup registered in India.
- The company should focus on designing semiconductor products like ICs, chipsets, SoCs, etc.
- Entities must not be blacklisted or involved in fraudulent activity.
Implementing Agency
The DLI scheme is being implemented by C-DAC (Centre for Development of Advanced Computing) under the administrative control of Ministry of Electronics and Information Technology (MeitY).
Current Performance and Progress (2025)
As of 2025, over 25 domestic design startups have registered under the Design Linked Incentive Scheme (DLI). Multiple fabless companies have received reimbursements and infrastructure support, leading to the development of indigenous chips for automotive, consumer electronics, and medical sectors.
Moreover, DLI has catalyzed the creation of India’s first indigenously designed 28nm chip prototype, now undergoing commercial validation.
Budget Allocation
The total financial outlay for the Design Linked Incentive Scheme (DLI) is ₹1,000 crore, spread over a period of 5 years. This outlay is part of the larger ₹76,000 crore package under the India Semiconductor Mission.
Benefits of the Design Linked Incentive Scheme (DLI)
- Reduces India’s reliance on foreign chip design firms.
- Encourages the growth of fabless design startups.
- Strengthens IP creation within India.
- Boosts employment opportunities in high-tech sectors.
- Aligns with Atmanirbhar Bharat and Digital India visions.
Comparison with Past Initiatives
Unlike earlier initiatives that primarily focused on electronics manufacturing, the Design Linked Incentive Scheme (DLI) is the first to directly address chip design and IP generation—the brain of modern electronics. While Make in India focused on production, DLI focuses on intellectual property, which holds higher strategic and economic value.
Conclusion
The Design Linked Incentive Scheme (DLI) is a landmark step toward making India a global design powerhouse. It is not just about chips; it’s about sovereignty in innovation, control over supply chains, and nurturing the next generation of Indian tech leaders. By enabling startups to design, test, and deploy chips from India, the DLI scheme ensures that India does not miss the semiconductor revolution.
Official Source:
https://www.meity.gov.in/esdm/DLI-scheme
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