Prime Minister Narendra Modi on Tuesday said that India is moving into the next phase of its semiconductor mission with a sharper focus on chip design and intellectual property, promising a revamp of the design-linked incentive (DLI) scheme to give the country a stronger foothold in the trillion-dollar global chip market.
“The government will also give a new look to the design-linked incentive scheme. Our effort is to develop Indian intellectual property in this sector,” Modi said at the fourth annual Semicon India conference. “The day is not far when the smallest chip made in India will drive the biggest change in the world,” he said.
Revamp of design-linked incentive scheme
The DLI scheme, launched in 2021 with an allocation of Rs 1,000 crore, was designed to encourage startups to build chip designs and own patents. But uptake has been slow, with just 23 projects approved so far. Industry leaders have long argued the subsidy of up to Rs 15 crore per startup, along with a sales-linked incentive capped at Rs 30 crore, was insufficient to attract deep tech entrepreneurs who needed higher risk capital and longer runway support.
By promising a reset, the Prime Minister has indicated that these shortcomings would be removed and the programme would be aligned with the government’s larger ambition to shift India from being a talent reservoir to a creator of semiconductor IP. “Today, India contributes 20% of the world’s semiconductor design talent,” he said, urging small firms and startups to seize the opportunity. “Design is ready. Mask is aligned. Now is the time for precision execution and delivery at scale.”
“In the world of semiconductors, it is often said, ‘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,” Modi said, noting that the global semiconductor market has already reached $600 billion and is on course to cross $1 trillion. “Given the pace at which India is advancing in the semiconductor sector, India will hold a significant share in this trillion-dollar market.”
Building a full semiconductor ecosystem
The India Semiconductor Mission was first cleared in December 2021 with a Rs 76,000 crore outlay, of which Rs 65,000 crore was earmarked for fabrication units and Rs 10,000 crore for upgrading the Semi-Conductor Laboratory in Mohali. Modi said the next phase of the mission is not limited to a single fab or project but to building a comprehensive ecosystem spanning design, manufacturing, packaging and high-tech devices.
“In total, 10 semiconductor projects are now underway, involving an investment of over $18 billion — more than Rs 1.5 lakh crore,” Modi said. “This reflects the growing global trust in India. The shorter the time from file-to-factory, the sooner wafer work can begin. We are working with this very approach.”
Electronics and IT minister Ashwini Vaishnaw said five domestic projects were already under construction and moving quickly. “The pilot line of one unit (CG Power) is completed. Two more units are expected to start production in a few months,” he said. “Overall, we can say that the foundation of this foundational industry has been laid very well.”
Modi underlined that reforms to the approval process and infrastructure have reduced red tape. A national single-window system now allows both central and state clearances to be obtained online, while semiconductor parks are being set up with plug-and-play facilities, including land, power, ports, airports and access to skilled labour. “India is moving beyond backend operations and progressing towards becoming a full-stack semiconductor nation,” he said.
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The prime minister also flagged progress in design centres being developed in Noida and Bengaluru, which he said are working on some of the world’s most advanced chips capable of storing billions of transistors and powering immersive technologies. He added that test chips from Micron Technology and Tata Electronics are already in production and that commercial production will begin later this year.
“Our journey may have started late, but nothing can stop it now,” Modi said. “The world trusts India, the world believes in India, and the world is ready to build the semiconductor future with India,” the Prime Minister added.
