Chip Design Incentives May Be Extended Beyond Start-Ups To Include Bigger Firms, Says Rajeev Chandrasekhar 

The Minister of State for Electronics and IT, Rajeev Chandrasekhar, has hinted that the Centre may expand the scope of design linked incentives (DLI) beyond start-ups. Speaking at the Semicon India conference in Gandhinagar, the minister said that the Centre is considering bringing larger firms into the fray for the incentive package aimed at promoting semiconductor designing in India. 

As of now, seven Indian start-ups have qualified for the DLI scheme which comes under India's ambitious $10 billion semiconductor mission announced in December 2021. "The success of the start-ups are making big companies also want to set up their designing in India. As long as the intellectual property (AI) is based in India, we'll consider supporting it financially," Chandrasekhar said.  

He added that fabless companies can design in India with the IP owned in the country on their own or in partnership with domestic start-ups to become eligible for the incentives. The DLI scheme is aimed at incentivising chip designing in India by supporting the sale of designs for Integrated Circuits (ICs), Chipsets,System of Chips (SoCs), Systems or IP Cores. 

In its original avatar, successful applicants under the scheme can avail financial support of up to 6 per cent on the net sales amount for a period of five years. “Though we haven’t reached a critical mass in terms of the number of people who apply under this programme, I certainly see an increase in momentum and confidence,” the minister of state said. 

So far, over 35 domestic start-ups have applied under the scheme. The potential entry of big companies won’t harm Indian design start-ups and will actually hone talent in India, believes Sudipto Sannigrahi of Matrix Partners India. He said, “A large company can’t do everything for everyone in the semiconductor sector. It’s not a matter of competition, it’s a matter of talent coming in and building the Indian chip ecosystem. There’s enough of a pie for everyone.”