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Design Linked Scheme
Context:
- The Ministry of Electronics and IT (MeitY) has approved 12 Indian start-ups for chip design projects under the Design Linked Incentive (DLI) scheme.
- These projects involve developing integrated circuits for telecommunications and AI hardware accelerators.
DLI Scheme Overview
- The DLI scheme is part of India’s $10 billion semiconductor incentive programme launched in December 2021 to strengthen the domestic semiconductor ecosystem.
- Objective: It aims to offer financial incentives and infrastructure support for the development of semiconductor designs, including integrated circuits, chipsets, and system-on-chip (SoC) over five years.
- The scheme has three components : Chip Design infrastructure support, Product Design Linked Incentive and Deployment Linked Incentive.
- Funding Target: The scheme aims to fund 100 start-ups, but only 12 have been approved so far, falling short of the target of 20 per year.
- Policy Alignment: The DLI scheme aligns with the National Policy on Electronics 2019, which seeks to position India as a global hub for Electronics System Design and Manufacturing (ESDM).
- Implementation: The Centre for Development of Advanced Computing (CDAC) serves as the nodal agency responsible for implementing the DLI scheme.
- Scope: The scheme offers support across various stages of semiconductor design development, including ICs, SoCs, systems, and IP cores, aiming to move up the value chain in the global semiconductor market.
Geopolitical Importance of the DLI Scheme :
- Strategic Autonomy: Promotes indigenous chip design, reducing India’s reliance on foreign nations for critical defence and telecommunication technologies.
- Tech Sovereignty: Positions India as a neutral and reliable partner amid the U.S.-China chip wars, diversifying global chip supply chains.
- Economic Security: Strengthens India’s role in the global electronics manufacturing value chain, insulating it from geopolitical disruptions.
- Defence Capabilities: Enhances domestic capacity to develop advanced military technologies, such as AI hardware and telecom chips.
- Global Alliances: Increases attractiveness to foreign tech giants, fostering strategic partnerships with countries like Taiwan, Japan, and the U.S.
- Countering China’s Dominance: Positions India as an alternative semiconductor hub, balancing China’s influence in global tech supply chains.