India's semiconductor design startup ecosystem is currently experiencing a historic boom in investments, with a sharp uptick in venture capital (VC) funding, catalysed by Government of India-led initiatives. The Design Linked Incentive (DLI) Scheme and the Chips to Startup (C2S) Program, both under the aegis of the Ministry of Electronics and Information Technology (MeitY), have become critical enablers of growth for chip design innovation in India.

These targeted government initiatives are not only incentivising innovation but also helping startups secure VC backing at an unprecedented scale. The rise of India’s semiconductor startup landscape is a testament to the effectiveness of public-private partnerships in high-tech industries.

Strong Government Support Spurs Industry Growth

The DLI Scheme, launched in 2022, is specifically designed to foster semiconductor design capabilities in India by providing financial incentives, access to EDA tools, and expert guidance to eligible startups. Under this initiative, 22 chip design startups have received government support amounting to Rs. 234 crore (US$ 27.08 million). These projects represent a cumulative investment of Rs. 690 crore (US$ 79.86 million).

This state funding has successfully acted as a catalyst for venture capital, helping these startups raise over Rs. 380 crore (US$ 43.98 million) in private equity and venture capital. The Chips to Startup (C2S) Programme complements DLI by building the necessary talent pool and supporting research across academia and startups.

Key Startups Gaining Momentum

Among the success stories is Netrasemi, a startup that recently secured Rs. 107 crore (US$ 12.38 million) in VC funding. Netrasemi is developing chips for smart vision, CCTV systems, and Internet of Things (IoT) devices. Their work aligns well with the government's vision of self-reliance in strategic and consumer electronics.

Another leading example is Mindgrove Technologies, which received Rs. 85 crore (US$ 9.83 million) in VC funding for their CCTV chip designs. This segment is particularly important for India’s rapidly expanding surveillance technology market, critical for urban safety and defence.

Fermionic Design, another DLI-supported firm, has raised Rs. 50 crore (US$ 5.79 million) to focus on chipsets for satellite communications—a vital area considering India's renewed push for space technology and satellite-based broadband services.

These startups are not only innovating domestically but are also collaborating with global manufacturers to test and produce their designs, signalling that Indian-designed chips will soon find their way into global supply chains.

Widening Access to Chip Design Tools

More than 72 Indian chip design firms and startups have been granted access to advanced Electronic Design Automation (EDA) software tools as part of MeitY’s ongoing support. These tools are crucial for designing complex chips required in defence, consumer electronics, telecom, and industrial automation sectors.

Furthermore, five startups have already reached the stage of building and testing their semiconductor designs in collaboration with global foundries. This marks a key milestone in India’s vertical integration of semiconductor R&D, prototyping, and manufacturing.

India Semiconductor Mission: A Vision for the Future

The government’s overarching strategy for this transformation is embedded in the India Semiconductor Mission (ISM). This mission envisions India as a global semiconductor design and manufacturing hub by promoting self-reliance, investment, skill development, and technology transfer.

Union Minister Ashwini Vaishnaw praised these developments, noting that India is not only emerging as a cost-effective innovation base but also showing signs of becoming a deep-tech powerhouse. According to him, the government’s long-term strategy is geared towards “innovation-led growth” with a strong emphasis on domestic chip design capabilities.

Industry-Wide Impact and Strategic Benefits

The growth of semiconductor design startups has strategic national importance. The localisation of chip development for key technologies like CCTV, IoT, AI, telecom, and space systems reduces dependency on global suppliers, especially in times of geopolitical uncertainties.

The investments are also creating high-tech employment opportunities, fostering STEM innovation, and positioning India competitively in the semiconductor value chain.

Challenges and Road Ahead

Despite these achievements, several challenges persist:

• Fabrication ecosystem is still in nascent stages, which means many of these designs are tested abroad.

• Talent shortages, especially in analogue and radio-frequency (RF) chip design, need to be addressed via skilling initiatives.

• Global IP licensing costs and EDA tool dependencies make early-stage development expensive.

However, the combined strength of government policies, startup dynamism, and investor confidence is helping to mitigate these hurdles.

Looking Ahead: An Innovation-Driven Future

With more investments expected in 2026 and beyond, India’s semiconductor design startup space is firmly on a growth trajectory. Analysts predict that if this momentum continues, India could export IP-rich chipsets globally within the next 5–7 years, significantly boosting high-value tech exports.

Government-backed schemes like DLI and C2S are already laying the groundwork for this transition. Coupled with sustained venture funding and academic collaboration, India is well on its way to establishing a robust semiconductor design ecosystem that can fuel future technological advancements across industries.

Conclusion

India’s success in semiconductor startup funding is a clear sign that targeted government intervention, when aligned with private capital and innovation, can lead to transformational change. The synergy of policy, technology, and entrepreneurship is unlocking new frontiers in semiconductor design, solidifying India’s place in the global chip innovation landscape.

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