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Chipsets for 25 consumer electronic items may get incentives under DLI 2.0

The Centre has already sanctioned 23 chip-design projects under the Rs 1,000 crore DLI scheme launched in December 2021. Led by domestic startups and micro," onclick="showFullScrImg(this)"/>
Given that securing 'demand' for homegrown chips is emerging as a key factor for the success of the Indian semiconductor story, the Centre is planning targeted financial incentives for developing chipsets for 25 electronic product categories under the updated design-led incentive (DLI) scheme, officials told ET. Stricter local sourcing norms are also in the works for certain electronic items, such as television sets and air conditioners, to ensure higher chances of Indian chips being featured in these appliances, the officials hinted.
The dual approach will ensure that chips produced in India find end consumers easily, with executives saying their future investment plans in India hinge on whether chips produced in India can also be bought locally, the ministry of electronics and information technology (MeitY) believes. Expeditiously placing Indian chips in the chipsets or boards of consumer electronic products is a priority for the ministry now as it prepares the ground for the India Semiconductor Mission 2.0, the officials said.
The products being eyed by the government include energy metres, refrigerators, telecom equipment, and devices using Internet of Things (IoT) sensors, among others, an official said. "Firms have been told that their R&D should be geared towards designing and producing chipsets used across a range of consumer items. As a first step, this will give them the expertise and industrial scale to advance onto more advanced electronics," he stressed.
The Centre has already sanctioned 23 chip-design projects under the Rs 1,000 crore DLI scheme launched in December 2021. Led by domestic startups and micro, small and medium enterprises (MSMEs), these projects have received support to develop indigenous chips and system-on-chip solutions for areas such as surveillance cameras, energy metres, microprocessor IPs, and networking applications.
Stricter local sourcing
Another official indicated that the Centre may bring in enabling policies to mandate higher usage of domestically manufactured chips in consumer electronics. "The aim is to incrementally increase the value addition in manufacturing in India across industry categories. Depending on the complexity of the electronic device, our value addition will rise to 15-35% after Indian chipsets are used. But mandates for using Indian chips will be needed for effectively raising local consumption. This will also showcase the effectiveness of our products to global buyers," he said.
Local sourcing mandates may resemble the Centre's earlier move to indigenise the equipment supply chain for closed-circuit television (CCTV) cameras. In April last year, MeitY had mandated that CCTV cameras imported, manufactured, or retailed in India should be certified by the Standardisation Testing and Quality Certification (STQC) directorate of the ministry. Government sources had argued the need for safeguarding national security interests, given how advanced features such as facial recognition software have become common among imported CCTVs.
Officials also pointed out that the government will continue to share access to industry-standard Electronic Design Automation (EDA) tools under DLI 2.0. Prohibitively expensive, a single license for these tools often costs tens of thousands of dollars. "Government support is crucial at this stage. The focus will remain on smaller firms, startups, and universities. Twenty chipsets designed by students at IITs across the country have been taped out and sent to the Semiconductor Laboratory in Mohali for fabrication," he said. So far, 278 academic institutions and 72 companies have gained access to EDA tools for their chip design projects under the DLI.
Source: EconomicTimes
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