Design Linked Incentive (DLI) Scheme

Design Linked Incentive (dli) Scheme

January 5, 2026

Kamaraj IAS Academy

Prelims Plus

Context: The DLI Scheme is a key component of the Semicon India Program, aimed at making India a global hub for semiconductor design.
Mechanism: It offers financial incentives (reimbursement of up to 50% of eligible expenditure) and design infrastructure support (EDA tools, IP cores) to domestic startups and MSMEs.
Strategic Importance: * Value Chain: Chip design is the "brain" of the semiconductor industry and is more value-intensive than mere assembly or testing.
IP Creation: The scheme encourages "Tape-outs" (the final stage of design before manufacturing) and the filing of patents, ensuring India owns the Intellectual Property (IP) of the chips it uses in telecommunications, defense, and IoT.
Latest Progress: As of 2026, 16 chip design tape-outs have been completed and 24 projects are underway in strategic sectors like satellite communication and drone detection.