The Design Linked Incentive (DLI) Scheme, an initiative by the Ministry of Electronics and Information Technology (MeitY), aims to build a robust domestic semiconductor design ecosystem in India. Managed by the Centre for Development of Advanced Computing (C-DAC), the scheme targets domestic companies, startups, and MSMEs, requiring them to maintain their domestic ownership status for three years after claiming incentives. Over a five-year period, the policy seeks to nurture domestic semiconductor design companies, empower at least 20 to achieve a turnover exceeding rupees 1500 Crore, and drive significant indigenization to facilitate import substitution. To support these goals, C-DAC is tasked with establishing critical design infrastructure, including a National EDA tool Grid, IP Core repositories, and prototyping and post-silicon validation services. 

To financially accelerate this growth, the scheme offers two substantial incentive structures for applications received during its initial three-year window. The Product Design Linked Incentive reimburses up to 5 percent of eligible expenditures—covering design, testing, and IP filing—capped at rupees 15 Crore per application for designs ready for volume production. Additionally, the Deployment Linked Incentive offers a reimbursement of 6 percent to 4 percent of net sales turnover over five years, up to a maximum of rupees 30 Crore per application, for designs successfully deployed in electronic products. The scheme's progress and economic impact will be evaluated through a mid-term appraisal two years into its implementation to guide future extensions and financial outlay adjustments.

• Enabling a fabless semiconductor design ecosystem in the country, by providing funding to cover mobilization and legal groundwork.
• Paying a crucial role in creating import substitution in the electronics import bill.
• Achieving significant indigenization in semiconductor and electronic products and IPs deployed in the country, thereby facilitating import substitution and value addition in electronics sector in the next 5 years

• The scheme is for Indian domestic companies, startups, and MSMEs working on semiconductor design. 
• The company must be more than 50 percent owned by Indian citizens. They must keep this domestic ownership status for at least three years after receiving the money.
• The government will pay back up to 50 percent of the costs for designing, testing, and patenting, up to a maximum of  rupees 15 Crore per application.
• If the designed chip is successfully used in electronic products, the company gets 4 percent to 6 percent  of their net sales back over 5 years, up to a maximum of rupees 30 Crore.
• C-DAC will help startups and MSMEs by giving them access to design tools (EDA), IPs, and facilities to build and test their prototypes. CDAC will be the nodal agency for financial support.
• The scheme opened for applications on January 1, 2022, for an initial period of three years. 

• Companies of semiconductor design for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores, and semiconductor-linked design.
• Expenses of approved applicants relating to design, development, testing, fabrication, validation, prototype development, product development, filing of Intellectual Property Rights etc., shall be considered as eligible expenditure for reimbursement under Product Design Linked Incentive component of the scheme.

Abhishek Tiwari, Scientist F

Embedded Systems Group,

C-DAC, Noida

Email: abhishek[at]cdac[dot]in