Pushing for self-reliance and global competitiveness, India eyes fiscal incentives and sourcing mandates to boost local chip use in consumer electronics.
The government is reportedly considering targeted fiscal incentives for chipset development across 25 electronic product categories. According to a report by The Times of India, meanwhile, it is also preparing strict domestic sourcing rules for items such as televisions and air-conditioners. The move is designed to ensure local semiconductor uptake as India rolls out the next phase of its Semiconductor Mission 2.0.
The report stated that the revised design-linked incentive (DLI) framework will incorporate new fiscal measures. Policymakers believe that semiconductor manufacturing in India will succeed only if supported by strong domestic demand. Industry leaders have also told the government that their investment decisions depend heavily on access to India’s local market.
The Electronics and IT Ministry is focused on quickly integrating Indian-designed chips into consumer electronics and IoT devices. Items likely to face mandatory sourcing requirements include energy meters, refrigerators, telecom equipment, and connected devices, in addition to TVs and air-conditioners.
An official explained that firms had been advised to focus their R&D on chipsets for mass-market consumer products, which would help them gain experience, achieve scale, and eventually move into advanced electronics.
The current ₹10 billion Design-Linked Incentive (DLI) programme, launched in December 2021, has already cleared 23 projects led by Indian startups and MSMEs. These projects cover chips for surveillance systems, energy meters, microprocessors, and networking equipment. Under DLI 2.0, officials said, companies and academic institutions will continue to access costly electronic design automation (EDA) tools, which are essential for chip design.
Local sourcing mandates are expected to be backed by enhanced certification norms, similar to those introduced for CCTV cameras last year under MeitY, which were justified on security grounds. Officials said such policies will increase domestic value addition in electronics manufacturing to between 15% and 35%, while boosting global confidence in Indian-made semiconductors.
