The government should help create stronger market access for locally developed chips and offer intellectual rights protections and procurement support to help the nascent industry grow, founders of multiple Design Linked Incentive (DLI)-backed semiconductor startups told ET.
Many firms may struggle to remain Indian-owned unless the government incentivises the market to use chips designed in the country, they warned.
The Rs 1,000-crore DLI scheme has helped build domestic chip-design capabilities, backing 24 domestic startups and MSMEs so far, but there is no incentive for electronics makers to adopt Indian chips for products aimed at the domestic market, they said.
The Ministry of Electronics and Information Technology (MeitY) did not respond to ET's request for a comment.
Founder of a DLI-backed semiconductor startup said several overseas investors, particularly from Singapore and the US, are already interested in backing Indian semiconductor startups, but some companies have avoided taking such investments to retain domestic status.
As per the existing DLI norms, after receiving their last milestone money from the government, the startups must stay Indian for three years.
