Design Linked Incentive scheme: eligibility and checklist

In short

DLI guidelines (30 Dec 2021) allow startups 50% of design costs up to ₹15 crore plus 6% to 4% of sales; ISM shows applications closed (1 Nov 2026).

The Design Linked Incentive (DLI) scheme is a government programme aimed at Indian chip-design companies. It is run for the Ministry of Electronics and IT (MeitY) by C-DAC. This checklist sets out who qualified, what the scheme paid, and the documents the application asked for. Use it two ways: to understand the rules that the first phase ran on, and as a preparation list for any later call. For the newer design incentives under Semicon 2.0, read our page on Semicon 2.0 chip design incentives instead; this page does not repeat it.

1. Status first

The India Semiconductor Mission (ISM) page for the scheme, which I opened on 1 November 2026, shows "Application Closed". The page lists the notification of 21 December 2021 and the guidelines of 30 December 2021. The guidelines said applications would open for three years from 1 January 2022, and that the scheme could be reopened with the minister's approval.

The "Objective" and "Eligibility" paragraphs on the ISM page describe a wafer fab scheme, not chip design. Rely on the guidelines for design rules. Everything below is from the 30 December 2021 guidelines. If a new call or a Semicon 2.0 form differs, follow the newer text.

2. What the scheme paid

Support	Who could apply	What it paid
Design infrastructure	Startup or MSME	Reimbursement of up to ₹30 lakh per application for MPW fabrication and post-silicon validation, plus access to the national EDA tool grid and IP core repository
Product Design Linked Incentive (P-DLI)	Startup or MSME	Milestone-linked reimbursement of up to 50% of eligible expenditure, ceiling ₹15 crore per application
Deployment Linked Incentive (DLI)	Domestic company, startup or MSME	6% to 4% of net sales of designed semiconductor goods over 5 years, ceiling ₹30 crore per application

DLI rates by year: 6%, 6%, 5%, 5% and 4%. The applicant had to reach a net sales threshold each year: ₹1 crore for a startup or MSME, and ₹5 crore for other domestic companies. A year below the threshold earned nothing, but the applicant could still claim in later years that met it.

3. Eligibility checklist

[ ] The applicant is a private limited company or a public limited company.
[ ] The company is a domestic company: more than 50% of its capital is beneficially owned by resident Indian citizens, or by Indian companies ultimately owned and controlled by them.
[ ] It will stay domestic for three years after it claims incentives.
[ ] For design infrastructure and P-DLI, it is a startup as defined by the DPIIT notification of 19 February 2019, or an MSME under the notification of 1 June 2020.
[ ] It works in semiconductor design or semiconductor-linked design: ICs, chipsets, SoCs, systems and IP cores.
[ ] It meets the threshold and ceiling limits in Annexure I of the guidelines for the support it wants.
[ ] It plans to spend only after the date the application is acknowledged. Spending before that date does not count.

4. Documents to assemble

The application form (Annexure II) had three sections. Fee first: a non-refundable application fee of ₹10,000, paid online.

Company details

[ ] Brief business profile and certificate of incorporation.
[ ] Certified memorandum and articles of association, or an equivalent registration document.
[ ] Latest shareholding pattern filed with the ROC and certified by a Company Secretary.
[ ] Letter of authorisation for the signatory, from the Board or Managing Director.
[ ] Address, contact details, nature of business and external credit rating.
[ ] Details of current design facilities in India and abroad.
[ ] Credit history: presence on RBI's defaulter and wilful defaulter lists and SEBI's debarred list, CIBIL score, and a Company Secretary or Board certificate on the defaulter lists.
[ ] Turnover, profit before tax, net worth and revenue from development and maintenance for the last 5 years, or since registration. Audited statements and ITR details.
[ ] Experience in the last 5 financial years: client, project, chips designed and supplied, backed by a work order, purchase order, contract or VC financing round, plus a completion certificate.

Detailed project report

[ ] Aims, duration, outlay, physical deliverables and quarterly milestones with funds needed.
[ ] Likely applications and end-user organisations, with any expression of interest received.
[ ] Technical background with a block diagram of sub-modules, novelty, IPR filed or IP cores owned, and readiness level (ideation, CAD proven, foundry proven).
[ ] Similar projects done by you or elsewhere, and collaborations planned.
[ ] Head-wise budget against quarterly, half-yearly or yearly needs, with the number of tape-outs, tape-out cost and wafer volume behind the NRE figure.
[ ] Commercialisation plan with targeted volumes, challenges and mitigation.
[ ] Jobs created, industry-academia links and import substitution potential.

5. What counted as eligible expenditure

Manpower cost of scientific and technical staff for a startup or MSME, capped at 50% of the total approved incentive.
Capital equipment for R&D, such as computers, servers and workstations.
Software IP and licences: EDA and CAD tools, verification tools and IP cores that the nodal agency does not supply.
IPR filing, in India and abroad.
Field trials: silicon bring-up, test and characterisation, and testing in the user's setting.
Production costs: MPW prototyping and volume production, including NRE for masks and wafers.

The date of the invoice is the date the expenditure is booked.

6. After approval

An approval letter is not a guarantee of payment. It sets milestones, and payment depends on the claim being checked.
Claims are made quarterly, half-yearly or yearly, once per period, and within 9 months from the end of the financial year they relate to.
Approved applicants file self-certified quarterly review reports for up to five years or until support ends, whichever is earlier.
Tell the nodal agency about any change in promoter shareholding.

Government schemes change, so confirm current terms with ISM or C-DAC and take advice from a professional before you file.

Questions people ask

Is the DLI scheme still open for applications?

The ISM page I opened on 1 November 2026 shows "Application Closed". The guidelines allow the minister to reopen the scheme during its tenure.

Who runs the DLI scheme?

C-DAC is the nodal agency under MeitY. It receives and screens applications, issues approvals and pays claims.

What is the most a startup could get from DLI?

Up to ₹15 crore under P-DLI and up to ₹30 crore under DLI, each per application, plus up to ₹30 lakh of design infrastructure support. Each has its own conditions.

Does a foreign-owned company qualify?

The guidelines require approved applicants to keep domestic status, meaning more than 50% of capital owned by resident Indian citizens or Indian companies controlled by them, for three years after claiming incentives.