The Indian government is planning to revise its Design Linked Incentive (DLI) scheme for semiconductor chip design to make it more practical and effective for startups and technology firms. The proposed changes are aimed at improving how incentives are distributed and ensuring that government support leads to commercially successful chip products.
The DLI scheme is part of India’s larger India Semiconductor Mission. Introduced to encourage local chip design and reduce dependence on imports, the programme supports domestic companies working on electronics manufacturing India and innovation. The initiative is also expected to strengthen the semiconductor industry in India over the long term.
Officials familiar with the discussions say the government is reviewing the current structure of the scheme to make funding more performance-based. Instead of offering incentives mainly during development stages, future support may be tied to product success, market adoption, or revenue generation. This could further boost government semiconductor incentives for emerging companies.
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The existing DLI programme provides financial assistance of up to 50 percent of eligible project costs for chip design companies. It also offers incentives linked to sales performance. In addition, approved companies gain access to specialised design tools and testing infrastructure through the ChipIN Centre managed by the Centre for Development of Advanced Computing (C-DAC).
Several Indian startups and technology firms have already benefited from the scheme. Projects approved so far cover areas such as drone technology, surveillance systems, broadband communication, satellite applications, and Internet of Things (IoT) devices. These initiatives are helping build a stronger chip design ecosystem and supporting semiconductor startups India.
Industry experts believe the revised version of the scheme may focus more on accountability and long-term returns. Some proposals suggest introducing equity-based or loan-linked support instead of only grant funding. This approach could support domestic semiconductor production and improve chip manufacturing India.
However, startups have urged policymakers to maintain flexibility in the programme. Many early-stage companies argue that strict commercial targets could create challenges for innovation, especially in a sector where product development cycles are long and capital-intensive. This is especially relevant for technology startups India entering the semiconductor space.
India’s semiconductor sector has gained momentum in recent years as the country works to establish itself as a global manufacturing and innovation hub. With demand for chips growing across electronics, automotive, defence, and telecom sectors, experts believe India chip industry growth will play a major role in future economic expansion.
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