Is India Ready to Lead the Global Electronics Race? Govt Eyes $4 Bn Boost

For years, India has been known as the back office of the world—a powerhouse of software talent. But when it comes to hardware, especially electronics and semiconductors, the country has long been playing catch-up. However, that might be about to change. With a slew of high-voltage announcements and mega funding promises, India seems to be finally betting big on becoming the next global hub for electronics design and manufacturing.

And now, the latest move in this game-changing strategy? A massive $4 billion Design-Linked Incentive (DLI) scheme that could potentially reshape India’s electronics story. TICE brings you key details here.

New DLI Schemes Coming? What’s Cooking in Delhi?

According to a Reuters report, the Indian government is gearing up to launch a new phase of the DLI scheme, worth up to $4 billion, to give a solid push to the electronics design ecosystem. This is not just about making chips—it's about designing them in India, by Indians, for the world.

The proposed scheme will offer targeted support to companies working across 30 semiconductor and 30 electronics product categories, making it one of the most ambitious and focused efforts in recent times.

But that’s not all. Companies availing the scheme could also earn performance-based incentives linked to their capital expenditure (capex) and revenue turnover—making the policy not just generous but also strategically driven.

What Products Are on the Radar?

The list of products under consideration reads like a checklist for building tomorrow’s tech world:

• Modems, WiFi chips, and NFC chips

• Geolocation and 5G radio frequency receivers

• Power electronics for electric vehicles (EVs)

• Home gateway and security systems

• Smart meters, inverters, and industrial control systems

These aren’t just buzzwords. These are the components that power everything from your smartphone to your smart grid. And the government is betting that if India can design and produce these at scale, it can reduce its massive dependency on imports and become a net exporter of cutting-edge electronics.

Currently, India imports a vast majority of its semiconductors and electronic components, making the country vulnerable to global supply chain disruptions. By increasing domestic value addition (DVA) in the electronics manufacturing sector to as much as 60%, the DLI scheme aims to not just create jobs, but also to strengthen India’s self-reliance.

This initiative is part of a larger push by the government to transform India into a global electronics powerhouse.

A Continuation of a Bigger Vision

The DLI scheme is not an isolated event. It’s a sequel to an already ongoing narrative—the India Semiconductor Mission, first rolled out in 2021 with an outlay of INR 76,000 Cr. Now, the government is reportedly contemplating Phase 2 of the mission, in sync with the new DLI launch.

Complementing this are several other schemes and allocations announced in Union Budget 2025, including:

• PLI scheme allocations upscaled to boost manufacturing

• Semiconductor project funding more than doubled to INR 2,499.96 Cr

• Total MeitY budget surged by 48% to INR 26,026.25 Cr

It’s clear that the government isn’t just testing the waters—it’s diving right in.

Semiconductor Plants: From Blueprint to Breakthroughs

In a symbolic but powerful move last year, Prime Minister Narendra Modi inaugurated three major semiconductor plants worth over INR 1.25 Lakh Cr. These included:

• CG Power and Renesas Electronics

• Tata and Powerchip Semiconductor Manufacturing Corp’s (PSMC)

• Tata’s OSAT (Outsourced Semiconductor Assembly and Test) facility

The pace of activity in this space is electrifying, to say the least. Even Micron, a US-based chipmaking giant, had its $10 billion PLI project approved, and disbursement has already begun.

Global Giants Watching—and Acting

India’s ambitions are not going unnoticed. Tech titans and semiconductor bigwigs across the globe are now turning their eyes—and their wallets—towards India.

Companies like Cyient, Samsung, and Intel have either expressed interest or already entered the Indian semiconductor market—via partnerships, investments, or facility establishments.

This growing interest is also evident in the funding numbers. The semiconductor industry in India raised $28 million in 2024, a sharp rise from just $5 million in 2023. While still modest compared to global standards, the trend signals strong investor faith in India’s long-term potential.

A Goldmine for Startups?

For startups in the semiconductor and electronics design space, this scheme could be a game-changer. Imagine building chips and sensors not just for India, but the world, with government backing you every step of the way.

Moreover, this move fits right into the growing narrative of India becoming a design and innovation-led economy. It’s no longer just about being a low-cost manufacturing base. It’s about creating value, IP, and global impact from scratch.

The success of this $4 billion DLI scheme will depend on how it is implemented on the ground. Challenges like skill development, R&D infrastructure, timely disbursement of funds, and coordination between central and state governments need to be addressed with urgency.

But if done right, this could be the policy that sets the stage for India’s transformation from a hardware importer to a hardware innovator.

As the global tech war heats up and the world looks for alternatives to traditional manufacturing giants, India is placing its chips on innovation. And with this mega push, the country might just have dealt itself a winning hand.