The Design Linked Incentive (DLI) Scheme is a central government scheme implemented by the Ministry of Electronics and Information Technology (MeitY). It was launched in December 2021 as a key instrument under the umbrella Semicon India Programme. The scheme was created to address India's reliance on imported semiconductor Intellectual Property (IP) and to build a self-reliant, globally competitive fabless semiconductor design ecosystem. Chip design is the most value-intensive segment of the semiconductor value chain, accounting for up to 50% of total value addition.
The scheme works by offering financial incentives and design infrastructure support to domestic companies, startups, and MSMEs engaged in the design of Integrated Circuits (ICs), chipsets, and Systems-on-Chip (SoCs). The financial support is divided into two parts: the Product Design Linked Incentive offers reimbursement of up to 50% of eligible design expenditure, capped at ₹15 crore per application. The second part, the Deployment Linked Incentive, provides incentives of 4% to 6% of net sales turnover over five years, capped at ₹30 crore, provided the design is successfully deployed in electronic products. Implementation is supported by the Centre for Development of Advanced Computing (C-DAC) as the nodal agency, which operates the ChipIN Centre to provide access to advanced Electronic Design Automation (EDA) tools.
Recently, the government has been redesigning the scheme into DLI 2.0, proposing a shift from the reimbursement model of DLI 1.0 to support linked to equity, debt, or ownership consideration. This change aims to ensure greater accountability and retain strategic Intellectual Property (IP) developed with public funds under Indian control. The DLI Scheme is closely connected to the broader goal of the National Policy on Electronics 2019 to position India as a global hub for Electronics System Design and Manufacturing (ESDM).