The government is planning financial incentives for making chipsets in 25 types of electronic products.
It also aims to introduce strict local sourcing rules for products like TV sets and air-conditioners to increase demand for chips made in India.
These plans are part of the updated Design-Led Incentive (DLI) scheme. Officials say growing local chip demand is key to India’s semiconductor success.
Industry Wants Local Sales for Future Investments
Semiconductor industry leaders say their investment decisions in India depend on whether chips produced here can be sold locally.
The Ministry of Electronics and Information Technology (MeitY) believes combining incentives with local sourcing rules will help Indian chips find buyers more easily.
Priority: Using Indian Chips in Consumer Electronics
Placing Indian chips quickly into consumer electronic products is a top focus for the ministry as it prepares for the India Semiconductor Mission 2.0.
Besides TV sets and air-conditioners, other products under consideration for strict local sourcing include energy meters, refrigerators, telecom equipment, and IoT devices.
Encouraging R&D in Chip Design
Companies are encouraged to focus their research and development on chipsets used across many consumer items.
This will help build expertise and industrial capacity to move toward advanced electronics, an official said.
Progress Under the DLI Scheme
Since December 2021, 23 chip-design projects have been approved under the Rs 1,000 crore DLI scheme.
Led by Indian startups and MSMEs, these projects support making indigenous chips and system-on-chip solutions for uses like surveillance cameras, energy meters, microprocessors, and networking.
Plans for Strict Local Sourcing Rules
The government may soon require higher use of domestically made chips in consumer electronics.
An official said this will gradually raise the value added in manufacturing to 15-35%, depending on the product’s complexity.
Mandates for Indian chips will boost local demand and demonstrate product quality to global buyers.
Certification Rules to Support Local Sourcing
Local sourcing rules might come with tougher certification requirements, similar to rules introduced for CCTV cameras last year.
MeitY mandated that all CCTV cameras imported, made, or sold in India be certified for quality and security to protect national interests, especially given advanced features like facial recognition.
Continued Support for Design Tools
The government will keep providing access to expensive electronic design automation (EDA) tools under DLI 2.0, which cost tens of thousands of dollars per license.
Support will focus on smaller firms, startups, and universities, officials said.
