DLI: A Complete Guide to India's Design Linked Incentive Scheme for Semiconductors

Chip fabrication tends to dominate the conversation around India's semiconductor ambitions, but fabs alone do not build a self reliant industry. The design layer, where a chip's actual architecture and intellectual property are created, has historically been the part of the value chain India's domestic companies struggled to compete in, given the prohibitive cost of design tools, IP licensing, and prototyping access that fabless design startups need just to get started.

DLI, the Design Linked Incentive Scheme, is the Ministry of Electronics and Information Technology's answer to that specific gap. Implemented under the broader Semicon India Programme, DLI was designed to promote indigenous semiconductor chip design by providing financial incentives and advanced design infrastructure to domestic startups and MSMEs, with the explicit aim of building a globally competitive, self reliant fabless chip design ecosystem.

The Opportunity: What DLI Actually Offers

• Product Design Linked Incentive: approved applicants engaged in semiconductor design can receive reimbursement of up to 50 percent of eligible expenditure, covering design, testing, and IP filing costs, capped at Rs. 15 crore per application, for designs ready for volume production.
• Deployment Linked Incentive: for designs successfully deployed in electronic products, approved applicants can receive 6 percent to 4 percent of net sales turnover over five years, capped at Rs. 30 crore per application, subject to minimum sales thresholds and successful product deployment.
• Comprehensive design infrastructure support: provided through the ChipIN Centre, operated by the Centre for Development of Advanced Computing, this includes access to the National EDA, Electronic Design Automation, Tool Grid, IP core repositories, MPW, Multi Project Wafer, prototyping, and post silicon validation, resources that would otherwise represent a major cost barrier for startups.
• Full lifecycle coverage: support spans the entire semiconductor design lifecycle, integrated circuits, chipsets, systems on chip, systems, and IP cores, with an emphasis on indigenous design, IP ownership, and real world deployment in electronic products.
• A genuine track record of adoption: the shared National EDA Grid had recorded over 54 lakh cumulative hours of usage by 95 supported startups as of early January 2026, and supported companies have moved from innovation to genuine execution, with 24 chip design projects sanctioned across areas including video surveillance, drone detection, energy meters, microprocessors, satellite communications, and broadband and IoT SoCs.
• Real products already in market: companies supported under DLI include ventures focused on indigenous RISC V microprocessor IPs and SoC design automation tools, and others that have gone on to tape out working chips, including AI focused SoCs, evidence the scheme is producing genuinely shipped, working silicon, not just funded proposals.
• Ambitious sector wide targets: the scheme aims to nurture at least 20 domestic semiconductor design companies to achieve a combined turnover of more than Rs. 1,500 crore within five years, alongside a graded strategy to identify products of national priority for complete or near complete indigenisation.

Who is eligible

• Startups, as defined under the DPIIT notification dated February 19, 2019.
• MSMEs, as defined under the Ministry of Micro, Small and Medium Enterprises notification dated June 1, 2020.
• Domestic companies, defined as those owned by resident Indian citizens per the FDI Policy Circular, 2017, or extant norms. Companies must be more than 50 percent owned by Indian citizens and retain this domestic ownership status for at least three years after receiving funds.
• Applicants engaged in semiconductor design across integrated circuits, chipsets, SoCs, systems, or IP cores, with startups and MSMEs additionally eligible for design infrastructure support beyond just financial incentives.

How the process works

1. Confirm your entity meets DLI's ownership and structure requirements, over 50 percent Indian citizen ownership, maintained for at least three years post funding, and that your work falls within semiconductor design for integrated circuits, chipsets, SoCs, systems, or IP cores.
2. Apply through C DAC, the nodal agency for DLI implementation, when MeitY issues its call for applications. Recent calls have invited proposals from domestic semiconductor chip design firms, companies, startups, and MSMEs directly.
3. Access design infrastructure support through the ChipIN Centre, including EDA tools, IP core repositories, MPW prototyping, and post silicon validation, critical resources for actually executing a chip design project.
4. As your design work progresses toward volume production readiness, apply for the Product Design Linked Incentive to get reimbursed for up to 50 percent of eligible design, testing, and IP filing expenditure, capped at Rs. 15 crore.
5. Once your chip design is successfully deployed in electronic products and generating sales, apply for the Deployment Linked Incentive to receive 6 percent to 4 percent of net sales turnover annually over five years, capped at Rs. 30 crore, subject to minimum sales conditions.

The Institution Powering DLI

DLI is implemented by C DAC, the Centre for Development of Advanced Computing, a premier R&D organisation operating under MeitY, which serves as the scheme's nodal agency. C DAC's ChipIN Centre gives supported companies direct, hands on access to design infrastructure that would otherwise be financially out of reach, positioning DLI not just as a funding mechanism but as a genuine capability building platform, operating within the broader Rs. 76,000 crore Semicon India Programme that backs India's semiconductor and display manufacturing ecosystem end to end.

Frequently Asked Questions

How much can a startup actually receive through DLI?

Two separate incentives are available: up to Rs. 15 crore, covering up to 50 percent of eligible design expenditure, through the Product Design Linked Incentive, and up to Rs. 30 crore, 6 percent to 4 percent of net sales turnover over five years, through the Deployment Linked Incentive, meaning a successful company could access both, sequentially, as its product moves from design to market.

Do I need to already have a finished chip design to apply?

No. Support is available across the full design lifecycle, including access to EDA tools, IP core repositories, and MPW prototyping through the ChipIN Centre, which are specifically meant to help companies still in the design and development phase.

What ownership structure does my company need to qualify?

Your company must be more than 50 percent owned by resident Indian citizens, as defined under the FDI Policy Circular 2017, and must maintain this domestic ownership status for at least three years after receiving DLI funds.

Is DLI only for large companies, or genuinely accessible to startups?

Genuinely accessible to startups. Companies supported so far include ventures building indigenous RISC V microprocessor IPs and startups that have gone on to tape out working AI focused SoCs, demonstrating the scheme reaches genuinely early stage, technically ambitious teams.

What is the relationship between DLI and C2S, Chips to Startup?

They are complementary parts of MeitY's semiconductor ecosystem strategy. C2S focuses more on academic capacity building and training the workforce that eventually feeds into chip design startups, while DLI provides the direct financial incentives, design reimbursement and deployment linked payouts, for companies actually taking a chip design to market.

The Bottom Line

DLI represents India's most direct financial mechanism for building a competitive, indigenous fabless semiconductor design industry, pairing meaningful reimbursement, up to Rs. 15 crore for design work, up to Rs. 30 crore for successful deployment, with genuinely valuable, otherwise inaccessible design infrastructure through the ChipIN Centre. For startups and MSMEs working on chip design across any stage of the integrated circuit, chipset, SoC, or IP core value chain, DLI offers a combination of capital and tooling access that has already translated into real, shipped silicon from Indian companies. The practical next step is confirming your company's ownership structure meets the eligibility criteria and applying through C DAC when MeitY's next call for DLI applications opens.