Design Linked Incentive (DLI) Scheme 2026: Boosting India’s Semiconductor Design Industry

Description

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The Design Linked Incentive (DLI) Scheme is a cornerstone initiative aimed at positioning India as a global leader in the high-value segment of the semiconductor industry chip design. By focusing on the design aspect rather than large-scale fabrication, the scheme seeks to anchor India firmly in the most strategic and technology-intensive part of the semiconductor value chain.

About the DLI Scheme

The DLI Scheme is implemented by the Ministry of Electronics and Information Technology (MeitY) under the broader Semicon India Programme. It is designed to encourage domestic innovation in semiconductor design, reduce reliance on imports, strengthen the domestic supply chain, and increase value addition within India.

Key Objectives:

• Promote fabless semiconductor design capabilities in India.

• Reduce dependence on imported chips and semiconductor solutions.

• Build resilience across the domestic electronics and semiconductor supply chain.

• Facilitate financial incentives and design infrastructure support for startups, MSMEs, and other domestic companies.

Who Can Apply?

• Start-ups and MSMEs: Eligible for both financial support and access to infrastructure for the design and deployment of semiconductor products.

• Other domestic companies: Eligible for financial incentives when deploying semiconductor designs in India.

The scheme covers the entire lifecycle of semiconductor design, including:

• Integrated Circuits (ICs)

• Chipsets

• Systems-on-Chips (SoCs)

• Complete systems and IP cores

The Centre for Development of Advanced Computing (C-DAC) serves as the nodal agency overseeing implementation, approvals, and monitoring.

Incentives Under the DLI Scheme

The DLI Scheme provides two major categories of incentives: Product Design Linked Incentive and Deployment Linked Incentive.

Product Design Linked Incentive (PDLI):

• Purpose: To support design, development, and prototyping of semiconductor products.

• Reimbursement: Up to 50% of eligible expenditure, capped at ?15 crore per application.

• Eligible Areas:

  • Integrated Circuits (ICs)

  • Chipsets

  • Systems-on-Chips (SoCs)

  • Complete systems and IP cores

  • Other semiconductor-linked designs

Deployment Linked Incentive (DLI):

• Purpose: To incentivize commercial deployment and scaling of designed semiconductor products.

• Incentive Rate: Ranges from 4% to 6% of net sales turnover, provided for five years.

• Cap: Maximum incentive of ?30 crore per application.

• Eligibility Requirements:

  • Minimum cumulative net sales over 5 years:

    • Rs 1 crore for startups and MSMEs

    • Rs 5 crore for other domestic companies

Strategic Significance

By incentivizing chip design domestically, the DLI Scheme plays a pivotal role in:

• Encouraging innovation in high-tech semiconductor solutions.

• Strengthening India’s global competitiveness in the electronics and semiconductor sector.

• Creating employment and entrepreneurial opportunities in high-value technology areas.

• Building a resilient semiconductor ecosystem that aligns with India’s national priorities in technology self-reliance.

This initiative complements other measures under the Semicon India Programme, forming a comprehensive roadmap to make India a global hub for semiconductor research, design, and innovation.

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