India’s semiconductor mission shifts focus to chip design and IP

Unveiling the next chapter of India’s semiconductor journey, PM Narendra Modi pledged to overhaul the design-linked incentive scheme to strengthen chip design and IP capabilities. With projects worth $18 billion already in motion, India is gearing up to capture a significant slice of the trillion-dollar global chip market.

Prime Minister Narendra Modi on Tuesday announced that India is entering the next phase of its semiconductor mission with a sharper emphasis on chip design and intellectual property creation. Central to this transition is a planned revamp of the government’s design-linked incentive (DLI) scheme, a move aimed at strengthening India’s foothold in the trillion-dollar global semiconductor market.

Revamping the DLI Scheme

Launched in 2021 with an allocation of ₹1,000 crore, the DLI scheme was envisioned as a catalyst for startups to build chip designs and secure patents. However, uptake has been sluggish, with only 23 projects approved in three years. Industry experts have argued that the current structure—providing up to ₹15 crore per startup and a sales-linked incentive capped at ₹30 crore—was insufficient to attract deep-tech entrepreneurs who require higher-risk capital and long-term support.

By promising a reset, Modi indicated that these shortcomings will be addressed. The revamped scheme will align with India’s broader ambition of shifting from being a global reservoir of semiconductor design talent to becoming a creator of intellectual property. “Today, India contributes 20% of the world’s semiconductor design talent,” he said, calling on small firms and startups to seize this historic opportunity.

Drawing an analogy, Modi stated: “Oil is black gold, but chips are digital diamonds. Oil shaped the previous century, but the power of the 21st century is concentrated in the small chip.” He highlighted that the global semiconductor market, already worth $600 billion, is projected to exceed $1 trillion in the coming years, and India is poised to secure a meaningful share.

Building a comprehensive semiconductor ecosystem

The India Semiconductor Mission, approved in December 2021 with a ₹76,000 crore outlay, laid the foundation for this ambition. Of this, ₹65,000 crore was allocated to fabrication units and ₹10,000 crore to upgrade the Semi-Conductor Laboratory in Mohali. But Modi emphasized that the next phase is not confined to a single fab or project. Instead, the goal is to create a comprehensive ecosystem covering design, manufacturing, packaging, and high-tech device production.

Currently, 10 semiconductor projects worth over $18 billion (₹1.5 lakh crore) are underway. “This reflects the growing global trust in India,” Modi said. He underscored the importance of shortening the journey from “file to factory” so that wafer production can commence faster.

Union Electronics and IT Minister Ashwini Vaishnaw added that five domestic projects are already under construction and progressing swiftly. “The pilot line of one unit (CG Power) is completed, while two more units are expected to start production in the coming months. The foundation of this foundational industry has been laid very well,” he noted.

Cutting red tape and building infrastructure

The government has introduced several reforms to reduce bureaucratic hurdles. A national single-window system now enables companies to obtain both central and state clearances online. Additionally, semiconductor parks with plug-and-play facilities are being developed, ensuring easy access to land, power, ports, airports, and skilled labor.

Modi said these measures are helping India move beyond its traditional role in backend operations toward becoming a full-stack semiconductor nation. He highlighted progress at design centers in Noida and Bengaluru, which are developing some of the world’s most advanced chips, capable of storing billions of transistors and powering immersive technologies.

Meanwhile, test chips from global majors such as Micron Technology and Tata Electronics are already in production, with commercial manufacturing expected to begin later this year.

While acknowledging that India entered the semiconductor race later than other nations, Modi expressed confidence in the country’s trajectory. “Our journey may have started late, but nothing can stop it now,” he said. “The world trusts India, the world believes in India, and the world is ready to build the semiconductor future with India.”

With the revamp of the DLI scheme, the acceleration of fabrication projects, and the establishment of robust infrastructure, India is positioning itself not just as a participant but as a leader in the semiconductor revolution of the 21st century.

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FAQs

1. What is the revamped DLI scheme?
A government initiative to boost chip design and IP creation by offering stronger support for startups and innovators.

2. Why is this important for India?
It positions India to secure a share of the $1 trillion global semiconductor market.

3. What progress has been made so far?
10 projects worth $18 billion are underway, with pilot production started at some units.

4. How is the government supporting companies?
Through faster clearances, semiconductor parks, and plug-and-play infrastructure.

5. Why focus on chip design and IP?
To move beyond talent contribution and ensure India owns and profits from semiconductor innovations.