Design Linked Incentive (DLI) Scheme

The Design Linked Incentive (DLI) Scheme is a critical initiative aimed at anchoring India in the most strategic and value-intensive segment of the global semiconductor value chain—chip design.
The scheme focuses on building India’s fabless semiconductor ecosystem, which emphasises design and intellectual property rather than manufacturing alone.

About the Design Linked Incentive (DLI) Scheme

The Design Linked Incentive Scheme is a key policy instrument to advance India’s ambition of developing a strong domestic semiconductor design capability.
It is implemented by the Ministry of Electronics and Information Technology (MeitY) under the broader Semicon India Programme.

Objective

The primary objectives of the scheme are to:

• Reduce India’s import dependence in semiconductors,

• Strengthen supply-chain resilience, and

• Enhance domestic value addition in high-technology electronics.

Eligibility under the DLI Scheme

• Start-ups and Micro, Small and Medium Enterprises (MSMEs) are eligible for both financial incentives and design infrastructure support for semiconductor product design and deployment.

• Other domestic companies are eligible for financial incentives for the deployment of semiconductor designs.

Scope of Support under the DLI Scheme

The DLI Scheme supports semiconductor design across the entire product lifecycle, from design and development to deployment.
It covers a wide range of products, including:

• Integrated Circuits (ICs),

• Chipsets,

• Systems-on-Chip (SoCs),

• Systems, and

• Intellectual Property (IP) cores.

Nodal Agency

The Centre for Development of Advanced Computing (C-DAC) acts as the nodal agency for the implementation of the DLI Scheme.

Financial Incentives and Design Infrastructure Support

1. Product Design Linked Incentive

Under this component, eligible entities receive reimbursement of up to 50% of eligible expenditure incurred on semiconductor design.
The reimbursement is capped at ?15 crore per application.

This incentive applies to semiconductor designs related to:

• Integrated Circuits (ICs),

• Chipsets,

• Systems-on-Chips (SoCs),

• Systems and IP cores, and

• Other semiconductor-linked designs.

2. Deployment Linked Incentive

The scheme provides turnover-based incentives ranging from 6% to 4% of net sales for a period of five years.
The total incentive under this component is capped at ?30 crore per application.

The minimum cumulative net sales requirement over Years 1–5 is:

• ?1 crore for start-ups and MSMEs, and

• ?5 crore for other domestic companies.

Significance of the DLI Scheme

By focusing on chip design and intellectual property creation, the DLI Scheme positions India in the highest value segment of the semiconductor ecosystem.
It supports innovation-driven start-ups, enhances technological self-reliance, and complements manufacturing-oriented initiatives under Semicon India, contributing to India’s long-term strategic and economic security.