Secure global chip patents, Prime Minister Narendra Modi urges Indian companies

Prime Minister Narendra Modi has called on Indian companies to obtain chip patents and make India’s presence felt in the global semiconductor value chain. His comments come as the government set to unveil the new outlay for its Semiconductor Mission and revamp the current semiconductor design-linked incentive (DLI) scheme.

“The government will also give a new look to the design-linked incentive scheme. Our effort is to develop Indian intellectual property in this sector,” the prime minister said at the fourth annual Semicon India event in New Delhi on Tuesday.

On Monday a group of investors including Celesta Capital, Accel, Premji Invest, Blume, Gaja Capital, Venture Catalysts and others announced a $1 billion fund for deep tech startups in semiconductors, space, quantum computing, artficial intelligence, and climate.

Modi said while the government was working on the next phase of the Semiconductor Mission, the project was not limited to just one fab or one chip manufacturing plant.

“We are creating such a semiconductor ecosystem that makes India self-reliant and globally competitive,” he said. For India to become a strong player in the global semiconductor supply chain, designing chips and owning the intellectual property for this is crucial, he added.

“Today, India contributes 20% of the world’s semiconductor design talent,” Modi said, calling on startups and small companies to participate in chip design.

Chip challenges

The government approved the first Semiconductor Mission in 2021, with an outlay of ₹76,000 crore. If this, it set aside ₹65,000 crore for semiconductor fabrication, ₹10,000 crore to revamp the Semi-Conductor Laboratory (SCL) in Mohali, and ₹1,000 crore for design-linked incentives. It has approved 23 projects under the scheme so far.

The design scheme, however, did not perform as the government expected, and the industry now wants more risk capital and higher incentives. Under the current scheme, the government provides a subsidy of up to ₹15 crore per startup for chip design. An additional deployment-linked incentive of 4-6% on net sales is also available, capped at ₹30 crore.

India has so far approved 10 semiconductor projects with a total investment of ₹1.6 trillion so far, according to government data.

Speaking at the event, electronics and information technology minister Ashwini Vaishnaw said the construction of five domestic semiconductor projects was progressing rapidly.

“The pilot line of one unit (CG Power) is completed. Two more units are expected to start production in a few months. Overall, we can say that the foundation of this foundational industry has been laid very well,” Vaishnaw said, adding that he wanted to see India transform into a product nation in a few years.