Govt Plans $4 Bn DLI Scheme To Boost India’s Electronics Sector: Report

The Centre is reportedly preparing to roll out a new design-linked incentive (DLI) scheme worth up to $4 Bn to bolster India’s electronics design ecosystem.

As per a Reuters report, the scheme will target companies working across 30 semiconductor and 30 electronics product categories.

Besides, these companies will also receive incentives based on their capital investments (capex) and turnover.

Some of the key product categories being considered under the scheme include modems, WiFi chips, near-field communication (NFC) chips, geolocation chips, 5G radio frequency receivers, power electronics for electric vehicles (EVs), home gateway and security systems, inverters, smart meters, and industrial control systems.

The broader objective of the scheme is to boost domestic value addition (DVA) in the semiconductor and electronics manufacturing sectors to as much as 60%. At present, India remains highly dependent on imports in these areas.

Pertinent to note that the DLI scheme is one among the many initiatives aimed at financial and infrastructure support to boost semiconductor development. 

While the government is reportedly mulling over the second phase of the India Semiconductor Mission, its first phase, approved in 2021, involved a financial outlay of INR 76,000 Cr.

Other initiatives include the 2025 Budget’s significantly increased funding for production-linked incentive (PLI) schemes, semiconductor projects, and the IndiaAI Mission. 

The allocation for semiconductor projects more than doubled to INR 2,499.96 Cr, and the overall ministry of electronics and IT budget rose by about 48% to INR 26,026.25 Cr. 

The government has also allocated land and funding to Indian and overseas semiconductor players to set up their fabrication plants in recent times.

For instance, last year, PM Narendra Modi inaugurated three semiconductor plants worth over INR 1.25 Lakh Cr for CG Power and Renesas Electronics, Tata and Powerchip Semiconductor Manufacturing Corp’s (PSMC) and Tata OSAT facility. 

In the same year, the disbursement process for US-based chipmaking giant Micron under its $10 Bn PLI scheme was approved by the centre. 

Many global players like Cyient, Samsung, and Intel have shown interest in India’s semiconductor ecosystem, either through investments, partnerships, or establishing facilities. 

As a result, the sector has also witnessed an increase in investor interest, with its funding surging to $28 Mn in 2024 in the semiconductor industry from $5 Mn in 2023.