India Plans $4 Billion Tech Design Incentive to Boost Patents and Reduce Import Dependence

By Staff Writer . Technology & Policy News . April 16, 2025

New Delhi, India — In a strategic push to secure a seat at the global technology innovation table, the Indian government is preparing to launch a $4 billion incentive scheme aimed at nurturing domestic product design, intellectual property (IP), and component manufacturing across the semiconductor and electronics sectors.

The scheme, currently under review by the Ministry of Electronics and Information Technology (MeitY), follows a report submitted in December by a task force of industry veterans. Pending Cabinet approval, the initiative could be unveiled in the coming months.

The Goal: A Design-Led Electronics Ecosystem

The core objective of the scheme is to foster a patent-rich technology ecosystem, empowering Indian firms to own product specifications, create IP, and reduce reliance on foreign imports. By incentivizing product design in 30 semiconductor and 30 electronics categories, the government hopes to strengthen domestic value addition (DVA) in critical tech segments.

Products likely to be covered include:

• Modems, WiFi, NFC, and geolocation chips

• 5G RF receivers

• EV power electronics

• Smart meters, security systems, industrial control units

• Home gateways and inverters

Government officials say this initiative could enable up to 60% DVA in product segments where India currently depends heavily on other countries.

Learning from Global Leaders

The move mirrors strategies used by global tech giants such as Apple, Nvidia, Qualcomm, and Intel, which have leveraged design patents and IP portfolios to dominate global technology supply chains. In India, however, the annual patent filing volume remains just 60,000, compared to 1 million annually in the US and China each.

“This is about more than just assembly—it’s about designing the core,” said a senior industry official. “Without control over IP, India remains a secondary player in tech manufacturing.”

Building Beyond the DLI Scheme

The upcoming initiative expands upon the Design-Linked Incentive (DLI) scheme launched under MeitY’s India Semiconductor Mission (ISM) in 2021, which offered under $12 million in incentives to just five companies.

Industry experts argue that DLI alone is insufficient, and broader support for design, R&D, and fabless chip development is vital if India is to become a credible global tech exporter.

Ashok Chandak, President of the India Electronics and Semiconductor Association (IESA), emphasized:

“Incentivizing electronics design is essential for reducing import dependency. India must lead in IP, not just in manufacturing.”

He also proposed preferential market access for Indian firms that design and manufacture within India, avoiding incentive misuse by firms importing components for local assembly.

What Happens Next?

While the $4 billion figure is a recommendation, the final budget allocation may vary based on cabinet deliberations. The design incentives could also be aligned with ISM’s second phase, expected later this year.

Another $15–$20 billion multi-year scheme focused on semiconductor manufacturing is also reportedly in the pipeline.

The production-linked incentive (PLI) scheme for mobile phones ends next year, prompting EMS (Electronics Manufacturing Services) players such as Dixon Technologies and Syrma SGS to seek alternate revenue drivers like IP-based product development.

India’s Global Tech Ambition

India’s electronics exports currently account for less than 2% of China’s, highlighting the urgent need to improve design capabilities, value addition, and innovation. The government also recently set a target of $50 billion in smartphone exports by 2030, signaling its commitment to scaling up hardware exports.

If implemented effectively, this design-focused scheme could serve as a turning point for India’s tech sector—elevating the country from a manufacturing hub to a technology design and innovation powerhouse.