Design Linked Incentive (DLI) Scheme

Why in News?

The Design Linked Incentive (DLI) Scheme is a key instrument in advancing India’s semi-conductor ambitions and to develop a strong fabless capability.

What is the DLI scheme?

• Design Linked Incentive (DLI) Scheme – It is a key instrument in advancing India’s ambition to develop a strong fabless capability.
• It supports semiconductor design across the full lifecycle—from design and development to deployment—covering
• Integrated Circuits (ICs), chipsets, Systems-on-Chip (SoCs), systems and IP cores.
• Aim – By promoting indigenous semiconductor content and intellectual property in electronic products, reduce import dependence.
  • Strengthen supply chain resilience, and enhance domestic value addition.
• Implementation – By the Ministry of Electronics and Information Technology (MeitY).
• Eligibility – The following are eligible for financial incentives for deploying semiconductor designs.
  • MSMEs — Defined according to the Ministry of Micro, Small and Medium Enterprises notification, 1 June 2020.
  • Startups — Defined as per the Department for Promotion of Industry and Internal Trade (DPIIT) notification, 19 February 2019.
  • Domestic companies — Defined as those which are owned by resident Indian citizens, as per the Foreign Direct Investment (FDI) Policy Circular, 2017 or extant norms.

What support is provided under the scheme?

• Financial incentives

• Product Design Linked Incentive – Reimbursement of up to 50% of eligible expenditure and is capped at ₹15 crore per application.
• The support is available to entities involved in semiconductor design for –
  • Integrated Circuits (ICs) Chipsets Systems on Chips (SoCs) Systems
  • IP Cores Semiconductor-linked designs.
• Deployment Linked Incentive – Incentives of 6% to 4% of net sales turnover are provided for five years.
  • The incentive is capped at ₹30 crore per application.
  • The minimum cumulative net sales required over Years 1–5 is 1 crore for startups/ ₹ MSMEs and 5 crore for other domestic companies.
• The design must be successfully deployed in electronic products.
• Design infrastructure support
• C-DAC has established the ChipIN Centre under the DLI Scheme to facilitate the design infrastructure support to approved companies.
• National EDA (Electronic Design Automation) Tool Grid — Remote access to the centralized facility of advance EDA tools for chip design activities will be provided to start-ups and MSMEs.
• IP Core repository — Flexible access to the repository of IP Cores for SoC design activities.
• MPW Prototyping support —Fiscal support for fabricating the design in MPW manner at semiconductor foundries.
• Post-silicon validation support — Fiscal support for testing and validation of the fabricated ASIC and silicon bring-up activities.

What are the programme highlights & key achievements of DLI?

• ChipIN Centre – It has democratized access to advanced EDA tools for chip design for about 1 lakh engineers and students across 400 organizations nationwide.
  • It is the world’s largest user base of a centralized chip design facility.
• This includes around 305 academic institutions under the Chips to Start-up (C2S) Programme and 95 startups under the DLI Scheme
  • This reducing entry barriers for early-stage innovators.
• India’s shared EDA Grid — A national platform offering high-end chip design software has recorded 54,03,005 hours of cumulative usage by 95 supported start-ups as of 2nd January 2026.
• Strengthening skill base – over 1,000 specialised engineers have been trained or engaged through DLI-supported projects, strengthening India’s design talent base.

What are key institutional frameworks for semiconductor design?

• Ministry of Electronics and Information Technology (MeitY) — MeitY leads national semiconductor initiatives, provides policy direction, and anchors schemes.
• It also coordinates institutional and industry partnerships to strengthen India’s chip design and manufacturing ecosystem
• Semicon India Programme (SIM) – With an outlay of ₹76,000 crore, this supports investments in semiconductor and display manufacturing as well as the design ecosystem.
• It ensures end-to-end backing for design, fabrication and productisation.
• Chips to Startup (C2S) Programme – It is an umbrella capacity building programme initiated at academic organizations.
• It has spread across the country to generate 85 thousand number of industry-ready manpower at B.Tech, M.Tech, and PhD levels specialized in semiconductor chip design.
• Microprocessor Development Programme – initiated at C-DAC, development and fabrication of open-source architecture-based family of microprocessors
  • viz. VEGA12, SHAKTI13 and AJIT microprocessors as a step towards self-reliance.

What are the companies that stands out as leading examples?

• Vervesemi Microelectronics – With a strong portfolio of 110+ semiconductor IPs, 25 integrated circuit (IC) product variants,
• 10 granted patents, and 5 trade secrets is developing motor-control chips for a wide range of applications.
• InCore Semiconductors – It is focused on the design and development of indigenous RISC-V microprocessor IPs and SoC design automation tools.
• These initiatives with the ultimate goal of building India’s most powerful embedded processor, Dolomite, targeted at entry-level smartphones and edge-AI applications.
• Netrasemi – It is focused on designing AI-capable SoCs for CCTV secure surveillance, smart sensors, robotics and drones, and mobility applications.
• The company has successfully taped out India’s first indigenously designed AI SoC in an advanced 12 nm process node, integrating in-house AI/ML accelerators, vision processing, and video engines.
• AAGYAVISION – It is designing advanced radar-on-chip that operate reliably in all weather conditions,
• And driving advancements in safety, security, smart infrastructure, edge computing, and
• Emerging 6G sensor networks as well as critical application like drone detection.

What lies ahead?

• The DLI Scheme is critical to anchoring India in the most strategic and value-intensive segment of the global semiconductor value chain—chip design.
• The scheme also enables high-value growth by translating deep-tech innovation into globally competitive products, fostering startups and building skilled workforce.
• These outcomes are already evident, positioning Indian companies as credible global suppliers while strengthening domestic supply chains and reinforcing India’s self-reliant semiconductor ecosystem.

Quick facts

Reference

PIB| Design Linked Incentive (DLI) Scheme