In a significant move toward strengthening its position in the global technology landscape, India is set to launch a new Design-Linked Incentive (DLI) scheme worth Rs. 34,228 crore (US$ 4 billion). The scheme, aimed at building indigenous capability in electronics design, semiconductor innovation, and patent creation, comes as a response to the country's growing need to reduce dependence on imported technology and critical components.

This initiative, to be implemented over the coming years, is expected to support companies across 30 semiconductor and 30 electronics product categories, while providing incentives based on capital investment and turnover. The Ministry of Electronics and Information Technology (MeitY), which received a detailed report from a designated task force in December 2024, is reviewing the recommendations, with cabinet approval expected soon.

Vision: Building a Self-Reliant Tech Future

The goal of this ambitious scheme is to promote the development of domestic intellectual property (IP) and increase the number of Indian-origin tech patents in the global innovation ecosystem. By incentivising chip design, electronics product design, and patent filing, the government seeks to develop a vibrant ecosystem of tech-driven enterprises—ranging from fabless chipmakers and original design manufacturers (ODMs) to original equipment manufacturers (OEMs).

With Rs. 34,228 crore earmarked, this policy represents one of India’s boldest steps in electronics design and tech development, building on the India Semiconductor Mission (ISM) announced in 2021. The earlier version of the DLI scheme had a much smaller budget of Rs. 103 crore (US$ 12 million) and supported just five companies. The new plan significantly scales up ambition and reach, aligning with India’s aspirations to emerge as a global innovation leader.

The Global Context and India’s Strategic Shift

India’s dependency on foreign-designed chips and components has long been a concern for both economic and strategic security. Amid geopolitical shifts and disruptions in global supply chains, especially in the semiconductor space, ensuring indigenous design and production has become imperative. The government’s vision is to mitigate future vulnerabilities by strengthening the domestic design base and securing the technology supply chain.

The new scheme is positioned not just as a manufacturing enabler, but as a technology enabler, putting Indian firms at the forefront of next-gen innovations. This aligns well with the objectives of Atmanirbhar Bharat (Self-Reliant India) and complements global ambitions under Make in India and Digital India.

Target Sectors and Incentive Coverage

Under this scheme, the government intends to provide structured incentives to a wide array of technology domains. This includes:

• Fabless chip design companies working on cutting-edge integrated circuits and SoCs.

• Original Design Manufacturers (ODMs) involved in end-to-end design of consumer electronics, medical devices, industrial tools, and more.

• Original Equipment Manufacturers (OEMs) contributing to both domestic consumption and exports.

• Targeted design innovations for key applications like:

  • 5G radio frequency receivers and modems

  • Wi-Fi chipsets

  • Power electronics for electric vehicles

  • Edge computing and AI processors

  • IoT device chipsets

The scheme will incentivise IP development, patent filing, prototyping, design validation, and even commercial production, with financial support directly linked to investment size and product turnover.

Ecosystem Development: From Silicon to Solutions

One of the most critical areas of focus is the creation of a holistic design ecosystem that nurtures innovation from idea to IP. The scheme aims to:

• Encourage academic-industry collaboration to drive R&D-led innovation in electronics.

• Promote startups and scale-ups by offering bridge funding and incubation support.

• Develop design clusters and electronics parks, ensuring access to common fabrication and testing facilities.

• Strengthen ties between design companies and manufacturing partners, so IP created in India is also manufactured in India.

• Enable export-ready electronics and components designed domestically, ensuring greater value capture in global supply chains.

Enhancing India’s IP Position on the Global Stage

By driving innovation in critical technology sectors, the scheme will help India secure a strategic seat at the global table for technology standards and patents. Currently, India lags behind China, the US, South Korea, and Japan in terms of tech patent filings, especially in semiconductors and electronics design. The government’s efforts, through this new DLI scheme, aim to:

• Triple the number of patents filed in India over the next 5 years.

• Build a globally competitive design and IP portfolio.

• Support the growth of “Designed in India” as a recognizable global standard, similar to “Made in Japan” or “Designed in California”.

Balancing Domestic Needs and Export Aspirations

Apart from tech innovation, the policy also considers the domestic demand for high-end electronics, especially in mobility, telecom, consumer tech, and defense. By promoting domestic brands, India aims to meet internal needs while building export-oriented champions capable of competing in global electronics and semiconductor markets.

This aligns with the government’s broader agenda to achieve electronics exports of US$ 120 billion by 2030, out of which a significant share is expected to come from products designed and developed within the country.

Strategic Implications and the Way Forward

The launch of this Rs. 34,228 crore DLI scheme is expected to serve as a game-changer for India’s electronics and semiconductor sector. With cabinet approval expected shortly, the industry is preparing to align its strategic planning with the incentives being outlined. Several state governments have also shown interest in collaborating through co-financing and shared infrastructure development, particularly in Tamil Nadu, Karnataka, Telangana, and Gujarat—states already housing electronics clusters.

Key next steps likely to be undertaken include:

• Finalisation of scheme guidelines and eligibility criteria.

• Setting up a dedicated implementation agency under MeitY or ISM.

• Rolling out outreach programs to engage startups, MSMEs, and large companies.

• Partnering with global tech firms for knowledge transfer and co-development of IP.

Conclusion: A Bold Leap Toward Innovation Sovereignty

With this massive boost to India’s electronics design ecosystem, the government is laying the groundwork for long-term technology independence, economic resilience, and global innovation leadership. The Rs. 34,228 crore DLI scheme is not merely an incentive program—it is a strategic intervention designed to transform India from a technology consumer to a technology creator.

By empowering design talent, startups, R&D labs, and industrial partners, this initiative holds the promise of establishing India as a formidable global force in electronics design, paving the way for the country to sit confidently at the global patents and innovation table.

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