How to Set Up an Electronics R&D Lab in India under the DLI Scheme (2026 Guide)

How to Set Up an Electronics R&D Lab in India: Leveraging the DLI Scheme

Quick Summary

What is it? Setting up an Electronics R&D lab in India is now financially viable for startups through the Design Linked Incentive (DLI) Scheme. Key Benefit: The scheme offers 50% financial reimbursement on eligible expenditure (up to ₹15 Crore) and access to high-end EDA tools via the National EDA Grid. Who is eligible? Domestic startups (DPIIT recognized), MSMEs, and Indian companies with >50% resident ownership. Actionable Step: Register on the C-DAC portal (chips-dli.gov.in) to access funding and design infrastructure before procuring expensive licenses.

The landscape for electronics design in India has shifted dramatically. With the government’s push for "Make in India" evolving into "Design in India," deeptech founders now have a strategic window to establish world-class R&D facilities.

For years, the barrier to entry for semiconductor and electronics design was the prohibitive cost of infrastructure—specifically Electronic Design Automation (EDA) tools and fabrication access. Today, the Design Linked Incentive (DLI) Scheme has dismantled these barriers, making it possible to set up a high-end R&D lab with a fraction of the traditional capital expenditure.

Electronics Lab

What is the DLI Scheme?

The Design Linked Incentive (DLI) Scheme is a financial support program managed by the Ministry of Electronics and IT (MeitY) and implemented by C-DAC. It is specifically designed to support domestic companies involved in semiconductor design, including Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), and IP Cores.

The scheme offers three critical pillars of support:

1. Financial Incentives (Product Design Linked): Reimbursement of up to 50% of eligible expenditure, capped at ₹15 Crore per application.

2. Deployment Incentives: An incentive of 6% to 4% of net sales turnover for 5 years, capped at ₹30 Crore, for designs that are successfully deployed in products.

3. Design Infrastructure Support: Access to the ChipIN Centre, a centralized facility offering remote access to industry-standard EDA tools (Synopsys, Cadence, Siemens, Ansys) for chip design and prototyping.

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Step-by-Step Guide to Setting Up Your Electronics R&D Lab

Setting up a lab in India requires navigating both physical infrastructure and regulatory frameworks. Here is the optimized workflow for 2026.

Step 1: Define Your Lab’s Focus & Eligibility

Before leasing space, confirm your eligibility for the DLI scheme. Your lab must focus on semiconductor design or semiconductor-linked design.

• Entity Type: You must be a DPIIT-recognized Startup, an MSME, or a domestic company.

• Ownership: The entity must be majority-owned (>50%) by resident Indian citizens.

  
  

Step 2: Infrastructure & Physical Setup

Electronics R&D labs in India have specific environmental requirements due to local power and climate conditions.

• Power Conditioning: Install Online UPS systems with isolation transformers. Indian power grids can have voltage fluctuations that damage sensitive equipment like oscilloscopes and logic analyzers.

• ESD Protection: Implement strict Electrostatic Discharge (ESD) protocols. Use ESD-safe flooring (conductive vinyl), grounded workstations, and continuous monitoring systems.

• Climate Control: High humidity can affect sensitive measurements. Maintain a clean-room environment (ISO Class 7 or 8) if you plan on handling bare dies or wire bonding.

  
  

Step 3: Procuring Design Tools (The DLI Advantage)

Do not buy expensive EDA licenses upfront. Instead of spending potential seed funds on licenses from Cadence or Synopsys, apply for the National EDA Tool Grid under the DLI scheme.

• Process: Register on the DLI portal.

• Benefit: Once approved, your engineers can access these tools remotely via a secure VPN connection provided by C-DAC, saving roughly $100k-$500k in annual licensing fees.

  
  

Step 4: Hardware Acquisition & Calibration

While EDA tools are covered, you must procure hardware for validation and testing.

• Essential Gear: Mixed Domain Oscilloscopes (MDOs), Vector Network Analyzers (VNAs), and Logic Analyzers.

• Compliance: Ensure all imported equipment has the necessary BIS (Bureau of Indian Standards) certification to avoid customs delays.

  
  

Frequently Asked Questions (FAQ)

1. What is the eligibility for the DLI Scheme in India? To be eligible for the DLI scheme, an applicant must be a domestic startup (DPIIT recognized), an MSME, or an Indian company where more than 50% of the capital is beneficially owned by resident Indian citizens.

   
   

2. How does the ChipIN Centre help startups? The ChipIN Centre, managed by C-DAC, provides fabless design companies with remote access to advanced EDA tools (like Cadence, Synopsys, and Siemens) and facilitates fabrication services (Multi-Project Wafer) at foundries, significantly lowering the entry barrier for R&D.

   
   

3. What is the financial cap for the DLI Product Design Incentive? The scheme reimburses up to 50% of eligible expenditure, subject to a ceiling of ₹15 Crore per application.

   
   

Key Takeaway for Founders

The DLI scheme fundamentally changes the unit economics of starting a deeptech hardware company in India. By offloading the massive cost of EDA tools and getting 50% reimbursement on R&D spends, you can redirect your capital toward what matters most: talent acquisition and rapid prototyping.

Start your application process today at the official portal: chips-dli.gov.in.

Looking to setup electronics labs in India? - We can help. Reach out to gulshan@xelec.in