Rethinking Semiconductor IP Protection in India
Abstract
India has a concentration of semiconductor design talent but the intellectual property on chips is largely owned by foreign companies. This article highlights the limitations of the Semiconductor Integrated Circuits Layout-Design Act, 2000 and analyses the Design Linked Incentive (DLI) Scheme as a strategy to promote indigenous semiconductor IP. It argues that technological self-reliance involves not only manufacturing capabilities but also fostering domestic innovation, patent ownership and commercialization.
Introduction
India has created real semiconductor design expertise; its engineers, in the thousands, design chips for the giants of the world. The 2nm tape-out at TSMC in February 2026 was a joint effort with Indian design teams for Qualcomm. But here’s the rub: When an Indian engineer designs a chip for Qualcomm, the IP belongs to Qualcomm, not India. The talent is Indian and the ownership is foreign.
There are 5-10 small Indian fabless startups with products in production, but most of the Indian startups do design testing and verification for larger firms, rather than create their own chips.
Why hasn’t it worked
India introduced the Integrated Circuits Layout-Design Act in 2000 to protect semiconductor designs. It is the Indian version of US and Japanese laws protecting chip layouts. Now you must have one question: if India has a provision, then what is the problem? The problem is that the companies Qualcomm and Samsung preferred to obtain patent protection over SICLD because it could be registered at their discretion and was recognised worldwide.While the SICLD Act provides basic statutory protection, enforcement mechanisms remain weak.More than two decades after its enactment, there are no reported judicial decisions enforcing rights under the Act, reflecting its limited commercial use.. A law without an enforcement infrastructure is a paper tiger.
Design-linked incentive(DLI)
Design Linked Incentive (DLI) Scheme: It is a scheme of the central government implemented by MeitY under the Semicon India Programme to incentivize domestic startups and MSMEs to design indigenous semiconductor chips and provide them with financial incentives and advanced design infrastructure to build a globally competitive and self-reliant fabless semiconductor design ecosystem.
Design and IP add more than 50% value to a chip (50% value addition and 20-50% of the Bill of Materials) and fabless firms contribute nearly 30-35% of the global semiconductor sales. This is the economic argument for why India is finally moving to IP ownership and not just manufacturing.
The DLI Scheme currently supports 24 startups, many of whom have successfully completed tape-outs, validated their products and found market traction. Inspired by this, the government is scaling up the programme with a target of enabling at least 50 fabless semiconductor companies in the next phase.
DLI-supported projects have resulted in 16 tape-outs, 6 ASIC chips, 10 patents and engagement of over 1,000 engineers with more than 3 times private investment leveraged.
Electronics and IT Minister Ashwini Vaishnaw said that ISM 2.0 will focus on indigenous chip design, their productisation, attracting ecosystem partners and developing talent
Critical assessment
India’s first-ever semiconductor policy explicitly aims at IP ownership rather than factory building. The creation of fabs (like Tata’s Dholera facility) creates manufacturing jobs but the creation of fabless design companies that own their own IP creates lasting economic value, patents, licensing revenue and real technological independence.
The 10 patents from 24 DLI-backed startups is a small number after several years of the scheme. Compare that with the scale of foreign patent filings by companies like Qualcomm and Samsung in India. The lion’s share of foreign patent applicants in India’s semiconductor space are chip giants like Qualcomm, Samsung and Huawei, not Indian companies, according to government IP reports. There is still a huge gap between government ambition and real indigenous IP creation.
In 2000, India crafted a unique law to protect chip IP, but 25 years later, its commercial adoption remains limited, with no reported enforcement cases under the Act.. This is not a tale of lawlessness. It is a tale of law that does not fit commercial reality. Patents are more suitable to global companies as they provide cross-border enforceability, which SICLD, a domestic-only law, cannot provide. If India wants its DLI-funded startups to generate lasting IP value, it might have to push them to file patents internationally instead of relying on SICLD registration locally.
Conclusion
On the other hand, the story of India as regards semiconductors is another case in point demonstrating how different being talented is from having technologies. Regardless of the decades of involvement of Indian engineers in the production of cutting-edge chips for other enterprises, all the intellectual property that had been generated as a result of that remained in the possession of foreigners. The non-implementation of the Semiconductor Integrated Circuits Layout-Design Act, 2000 demonstrates the inefficiency of laws that do not conform to economic reality.
Different from previous approaches, the Design Linked Incentive (DLI) Scheme places an emphasis on domestic chip design and intellectual property and not just manufacturing of semiconductors. Positive effects of the policy have already been observed; however, there remains a lot to be done concerning overcoming the gap between the ability of Indian engineers to design chips and the possession of the intellectual property in semiconductors.
In order to close this gap, it becomes important to offer some additional support to the processes of patented development, international registration of IPs, venture capital investments and commercialization of semiconductor innovations. Only in such a way will it become possible to make India self-sufficient in technological terms.
References
Imagination Technologies, What Is Semiconductor IP?, https://www.imaginationtech.com/glossary/what-is-semiconductor-ip/ (last visited June 19, 2026).
IP Protection of Semiconductor Layout Designs under TRIPS and Indian Law, Int’l J.L. Legal Rsch., https://www.ijllr.com/post/ip-protection-of-semiconductor-layout-designs-under-trips-and-indian-law (last visited June 19, 2026).
Semiconductor Integrated Circuits Layout-Design Act, No. 37 of 2000 (India), https://www.indiacode.nic.in/bitstream/123456789/1998/1/200037.pdf.
Design Linked Incentive Scheme, Ministry of Electronics and Information Technology, Government of India, https://chips-dli.gov.in/DLI/HomePage (last visited June 19, 2026).
Office of the Controller General of Patents, Designs, Trade Marks and Geographical Indications, Annual Report 2024–25, Government of India, Chapter X: Semiconductor Integrated Circuits Layout Design Registry, available at: https://ipindia.gov.in/storage/uploads/media/English_Annual_Report_2024-25.pdf (last visited July 11, 2026).