India DLI 2.0 Scheme: Domestic Chip Firms Raise Concerns Over MNC Participation Through Startup JVs
India’s domestic semiconductor companies have expressed concerns regarding the proposed Design Linked Incentive (DLI) 2.0 scheme, warning that allowing multinational corporations (MNCs) to participate through joint ventures with Indian startups could dilute the intended benefits for local chipmakers.
According to industry stakeholders, the current structure of the DLI 2.0 proposal may create a situation where larger foreign-backed entities dominate the ecosystem, potentially limiting opportunities for Indian semiconductor startups and fabless design firms.
The concerns have reportedly been raised with the Ministry of Electronics and Information Technology (MeitY), although the ministry has not issued an official response on the matter.
Industry Voices Concerns Over Foreign Influence
Vijay Mukkatam, Chief Executive of Sense Semi Technologies, a Bengaluru-based fabless semiconductor startup and beneficiary of the earlier DLI scheme, stated that permitting foreign ownership participation through joint ventures could eventually allow larger global firms to influence the domestic semiconductor ecosystem.
Industry executives are urging the government to continue prioritising Indian startups under DLI 2.0 instead of opening the scheme to multinational corporations through indirect routes.
Focus on Building India’s Semiconductor Ecosystem
The debate comes at a time when India is aggressively working to strengthen its semiconductor ecosystem through multiple policy initiatives, incentive schemes, and investments aimed at boosting chip design and manufacturing capabilities.
The DLI scheme was introduced to support domestic semiconductor design companies and encourage innovation within India’s electronics ecosystem. Industry stakeholders believe the next phase of the scheme should continue focusing on nurturing indigenous semiconductor capabilities and reducing dependence on foreign technology players.
As India accelerates its semiconductor ambitions, policymakers are expected to balance foreign investment interests with the need to build a strong and self-reliant domestic chip industry.
