Major Government Programmes and Schemes Supporting Semiconductor and Electronics R&D in India

India is aggressively building a native ecosystem for semiconductor design, research, and high-tech electronics manufacturing. The Ministry of Electronics and Information Technology (MeitY) along with other central departments has launched targeted financial incentives, infrastructure development models, and capacity-building schemes. These efforts focus on chip design, domestic fabrication (fabs), assembly, testing, marking, and packaging (ATMP) facilities, along with intellectual property (IP) creation. By connecting academia, startups, and global industrial leaders, the Indian government aims to reduce electronic import dependency, establish supply chain resilience, and strengthen indigenous technology capabilities.

Core Flagship Programmes and Missions

India Semiconductor Mission (ISM) and Semicon India Programme

Launched in December 2021 with an initial outlay of ₹76,000 crore, the Semicon India Programme serves as the primary policy framework for building a comprehensive semiconductor ecosystem. The India Semiconductor Mission acts as the specialized nodal agency inside Digital India Corporation to coordinate all initiatives.

• The central government provides 50% financial support on a pari-passu basis for setting up Silicon CMOS Semiconductor Fabs and Display Fabs.
• It offers 50% capital expenditure support for Compound Semiconductors, Silicon Photonics, Sensors Fabs, and Assembly, Testing, Marking, and Packaging (ATMP) or Outsourced Semiconductor Assembly and Test (OSAT) facilities.
• The government updated the policy framework to Semicon 2.0 with an expanded fiscal allocation of ₹1,27,500 crore. This upgraded phase broadens focus to equipment manufacturing, raw materials, advanced packaging, and long-term research.

Design Linked Incentive (DLI) Scheme

The DLI Scheme directly supports domestic startups and MSMEs engaged in semiconductor chip design across the full product lifecycle.

• The Product Design Incentive provides reimbursement of up to 50% of eligible expenditure, capped at ₹15 crore per application, for Integrated Circuits, Systems-on-Chip, and IP cores.
• The Deployment Linked Incentive provides an incentive of 4% to 6% on net sales achieved over five years, capped at ₹30 crore per application.
• The Infrastructure Support component grants free access to Electronic Design Automation tools through centralized national infrastructure to reduce entry costs for chip design entrepreneurs.

Chips to Startup (C2S) Programme

The C2S programme targets human resource development and academic research in Very Large Scale Integration (VLSI) and embedded systems design.

• The scheme aims to train 85,000 industry-ready engineers at B.Tech, M.Tech, and PhD levels across 104 academic institutions.
• It provides specialized EDA software licenses, fabrication support at SCL Mohali, and IP core repositories to university research laboratories.

Strategic Electronics Manufacturing & Technology Schemes

Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)

SPECS addresses domestic disabilities in electronic component manufacturing by offering direct financial incentives.

• The scheme offers a 25% financial incentive on capital expenditure for target assets like semiconductor devices, passive components, and printed circuit boards.
• It covers high-value electronic hardware component supply chains and associated industrial research laboratories.

Modified Electronics Manufacturing Clusters (EMC 2.0)

EMC 2.0 creates shared industrial infrastructure to foster collocated R&D and production units.

• The government provides financial support up to 50% of project costs for setting up common facility centers, testing laboratories, and industrial parks.
• The initiative facilitates fast-track setup for chip packaging units and component suppliers near primary assembly hubs.

Research, Development and Innovation (RDI) Scheme

Introduced to bridge private sector funding gaps in high-technology R&D.

• The scheme operates under a ₹1 lakh crore corpus designed to provide long-term, low-cost capital for strategic sectors including electronics.
• It directs high-risk growth capital toward domestic hardware startups commercializing indigenous intellectual property.

Key Sectoral Initiatives and R&D Programmes

Specialized MeitY R&D Programmes

• The National Mission on Power Electronics Technology focuses on indigenous R&D for microcontrollers, wide-bandgap semiconductor devices, and power modules used in electric vehicles and industrial automation.
• The Electric Vehicle Sub-System Programme supports local development of automotive-grade microcontrollers, sensor ICs, and motor control hardware.
• Technology Incubation and Development of Entrepreneurs (TIDE 2.0) promotes technology startups using emerging digital tools and specialized electronics hardware solutions.

Dedicated Research Institutes and Infrastructure Facilities

• Semi-Conductor Laboratory at Mohali acts as the primary public sector semiconductor fabrication facility, supporting national strategic needs and prototyping for academic chip designs.
• Centre for Development of Advanced Computing executes implementation frameworks for DLI and C2S schemes while maintaining chip design infrastructure hubs.
• Gallium Arsenide Enabling Technology Centre at Hyderabad focuses on compound semiconductor research, specifically Monolithic Microwave Integrated Circuits for defense and space applications.

Key Facts and Data Summary

• The initial budget outlay for the Semicon India Programme stood at ₹76,000 crore, while the expanded Semicon 2.0 framework carries an allocation of ₹1,27,500 crore.
• Central government financial support under the modified semiconductor scheme provides a uniform 50% fiscal incentive across all technology nodes for semiconductor fabs, display fabs, and OSAT facilities.
• The Chips to Startup (C2S) programme covers 104 academic and research institutions across India to train 85,000 engineers in semiconductor design.
• Under the DLI scheme, financial incentives reach up to 50% of eligible project expenditure, subject to a maximum ceiling of ₹15 crore per design project.
• The DLI deployment incentive provides 4% to 6% of net sales turnover over a period of 5 years.
• The Research, Development and Innovation scheme operates with a ₹1 lakh crore central corpus to provide patient, low-cost capital for deep-tech sectors.
• MeitY’s internal R&D allocation reached ₹1,249 crore, expanding six-fold over an eleven-year period.
• Over 24 semiconductor design projects have received direct financial backing under the initial phases of the DLI scheme.