Design Linked Incentive (DLI) Scheme

Why in News?

Recently, the Union Minister for Electronics & IT interacted with semiconductor chip design companies approved under the Design Linked Incentive (DLI) Scheme.

• It is a central government scheme under the Semicon India Programme.
• Aim – To provide financial incentives and design infrastructure support for semiconductor design.
• It covers Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor-linked design(s) over a period of 5 years.
• Launched in – 2021.
• Nodal Ministry – Ministry of Electronics and Information Technology (MeitY).
• Implemented by – Centre for Development of Advanced Computing (CDAC).
• Objectives –  
• Eligibility – Domestic companies, startups and MSMEs engaged in semiconductor or semiconductor-linked design.
• Must retain domestic ownership (>50% Indian ownership) for three years after availing incentives
• Must meet prescribed threshold and ceiling limits.
• Components –
• Financial incentives – Up to 50% of eligible costs for design prototyping, scaling-up, and volume production
• Design infrastructure support – Electronic Design Automation (EDA) tools and Intellectual Property (IP) cores to help with early prototyping of designs.
• Deployment incentive – Incentives of 6% to 4% of net sales turnover over five years for deployment & commercialization of chip solutions.
• Target – Enable at least 50 fabless semiconductor companies in the next phase to build a globally competitive fabless semiconductor ecosystem in India
• Significance – Positions India as an emerging global hub for semiconductor design.
• Leverages India’s large talent base (20% of global semiconductor design engineers).
• Strengthens trusted supply chains for strategic sectors like defence, space and automotive.
• Advances India’s transition from a services-led economy to a product nation.

References

1. PIB | Design Linked Incentive (DLI) Scheme
2. ISM | Design Linked Incentive Scheme