Government Launches Major Scheme to Boost Semiconductors: What It Means for Startups

What Happened

The Government of India has rolled out a new Design-Linked Incentive (DLI) scheme to strengthen the semiconductor industry in India. The plan focuses on supporting startups and MSMEs (Micro, Small, and Medium Enterprises) engaged in semiconductor design and manufacturing. Minister of State for Electronics and IT, Jitin Prasada, shared the update in a recent announcement.

When and Where

The announcement was made in July 2025, as part of the government’s broader push to boost India’s electronics ecosystem. The scheme will be implemented nationwide, but early interest is expected from technology hubs like Bangalore, Hyderabad, and Noida, where semiconductor-related startups are already active.

Why It Matters

India currently imports most of its semiconductors, which are essential for everything from smartphones and electric vehicles to defense equipment and medical devices. The DLI scheme is part of India’s long-term strategy to become more self-reliant and reduce dependence on global chipmakers.

For startups and MSMEs, this is a major opportunity. With government backing, smaller players can now access resources and funding that were previously limited to larger firms. It’s not just about boosting production—it’s also about building long-term capability and innovation at the design level.

Who’s Involved

The initiative is being led by the Ministry of Electronics and Information Technology (MeitY), with implementation support from the India Semiconductor Mission (ISM). Jitin Prasada, who currently oversees the electronics and IT portfolio, is actively promoting the scheme as a key part of India’s digital strategy.

Startups, research institutions, and small manufacturers involved in chip design and related fields are expected to be the primary beneficiaries. The scheme will also collaborate with industry bodies and incubators to ensure grassroots-level reach.

What’s Next or Expected Reactions

The initial phase of the scheme includes outreach and awareness sessions to help startups understand how to apply. The government is also likely to announce funding guidelines, eligibility criteria, and timelines in the coming weeks.

Many in the industry expect strong participation, especially as demand for semiconductor-based solutions continues to grow in sectors like AI, EVs, and telecom. If implemented well, this could pave the way for India to become a semiconductor design hub in the next 5–10 years.

Public or Social Media Response

Early public response has been largely positive, especially from entrepreneurs and professionals in the tech ecosystem. Social media conversations suggest a sense of cautious optimism, with many praising the government’s intention to back innovation.

Several tech incubators have also posted about the opportunity, signaling potential collaborations with young ventures.

Expert Views or Context

Industry analysts say the move is timely. With global chip shortages fresh in memory, countries around the world are focusing on local semiconductor production. India’s DLI scheme is in line with international trends, but experts caution that execution will be key.

Some also stress the need for long-term support. “Incentives are a great start, but sustained mentorship, infrastructure, and skilled talent will determine real success,” one senior consultant in the electronics industry noted.

Any Stats or Trends

According to recent data, India’s semiconductor market is expected to grow to $80 billion by 2030. However, less than 10% of that demand is currently met through domestic production. With the launch of schemes like DLI, the government hopes to bridge this gap by encouraging more local design and innovation.