Design-linked incentive
Also called: DLI · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT
Meaning
A design-linked incentive (DLI) is government support tied to what a firm spends on designing products at home, mainly semiconductor chips. Most support schemes reward only factories or output. DLI instead rewards design work, which is the high-value, knowledge-heavy part of the chip business. The aim is to build India's own chip-design capability, not just fabs, the plants that make chips. It forms part of India's semiconductor push under the India Semiconductor Mission (2021, Rs 76,000 crore).
Example
An Indian startup designs a new power-management chip for electric vehicles. Under DLI it can get support for eligible design costs such as design tools and development work. Production may then happen at a fab anywhere.
Don't confuse with
- Production-linked incentive (PLI): PLI pays a percentage of extra sales over a base year, so it rewards making things. DLI rewards design spending, so it builds design capability.
Related concepts
- Labour-intensive industrialisation
- Production-linked incentive
- Phased manufacturing programme
- Contract manufacturing
- Special economic zone
- Export processing zone
- Export-oriented unit
- Eight core industries