**Executive Summary:**
This document outlines the Indian government's initiatives to bolster its AI infrastructure and semiconductor industry. It addresses concerns about US export restrictions (which were later rescinded) and details the IndiaAI mission and the Design Linked Incentive (DLI) scheme under the Semicon India programme. The policy aims to democratize AI development, provide financial support to companies, and promote domestic semiconductor design and production.
**Key Points / Main Content:**
* **US Export Restrictions:**
* Initial concerns about US export restrictions on AI chips were mitigated after the US rescinded its AI Diffusion Rules (rescinded May 13, 2025) and published an AI Action Plan (July 23, 2025) without restrictions impacting India's AI development.
* **IndiaAI Mission:**
* Launched in March 2024 to establish a robust and inclusive AI ecosystem.
* Seven Key Pillars:
* **IndiaAI Compute Capacity:** Provides high-end GPUs to MSMEs, startups, and academia at discounted rates. 34,381 GPUs available through the IndiaAI Compute Portal. Pricing support by the Government.
* **IndiaAI Foundation Models:** Develops Large Multimodal Models (LMMs) trained on Indian datasets.
* **AIKosh:** Unified data platform integrating datasets for training AI models.
* **IndiaAI Application Development Initiative:** Develops AI applications for sectors like climate change, healthcare, and agriculture.
* **IndiaAI FutureSkills:** Develops AI-skilled professionals and establishes Data and AI Labs in Tier 2 and 3 cities.
* **IndiaAI Startup Financing:** Provides financial assistance to AI startups.
* **Safe Trusted AI:** Ensures responsible AI adoption through strong governance frameworks.
* **Semicon India Programme and DLI Scheme:**
* The Government has approved the Semicon India programme with a total outlay of ₹76,000 crore.
* The DLI Scheme supports domestic companies, startups, and MSMEs in semiconductor design.
* Provides design infrastructure support, including EDA tools and IP cores.
* Offers financial incentives:
* Up to 50% of eligible costs, capped at ₹15 Crore per application for design prototyping, scaling up, and volume production.
* Financial incentives ranging from 6% to 4% of net sales turnover, up to ₹30 Crore per application over five years, for deploying and commercializing IP cores, chips, and System-on-Chip (SoC) solutions.
* 72 domestic companies approved for access to EDA tools; 23 companies approved for financial support for developing SoCs.
* Funds released to companies upon meeting specific milestones.
* **Global Collaboration:**
* India is actively participating in shaping the global debate on AI development, usage, and safety.
* India was the founder chair of the Global Partnership on Artificial Intelligence (GPAI).
* India is poised to host the AI Impact Summit in February 2026.
**Impact Analysis:**
* **Indian Corporates, MSMEs, and Startups:**
* *Impact:* Benefit from financial incentives, design infrastructure support, and access to advanced technology.
* *Action Required:* Participate in the DLI Scheme, develop semiconductor designs, and meet milestones for fund release.
* **AI Professionals and Researchers:**
* *Impact:* Benefit from increased opportunities for skill development and research in AI.
* *Action Required:* Engage with IndiaAI FutureSkills initiatives, pursue advanced degrees in AI, and utilize AIKosh for research.
* **Government Bodies:**
* *Impact:* Responsible for implementing and overseeing the IndiaAI mission and the DLI Scheme.
* *Action Required:* Facilitate access to resources, monitor progress, and adjust policies as needed.
* **Global Technology Leaders:**
* *Impact:* Opportunity to collaborate with India on AI development and contribute to the global AI ecosystem.
* *Action Required:* Participate in the AI Impact Summit and explore partnerships with Indian entities.
Key Entities Referenced
Artificial Intelligence: A field of computer science focused on creating machines capable of performing tasks that typically require human intelligence.
IndiaAI Mission: A strategic initiative launched by the Government of India in March 2024 to establish a robust and inclusive AI ecosystem aligned with India's development goals.
Design Linked Incentive DLI policy: A scheme under the Semicon India programme to support domestic companies, startups, and MSMEs in designing and commercializing semiconductor products.
Semicon India programme: An initiative approved by the Government of India with a total outlay of ₹76,000 crore for the development of semiconductor and display manufacturing ecosystem in the country.
Global Partnership on Artificial Intelligence GPAI: A multi-stakeholder initiative to promote responsible and human-centric development and use of AI.
United States Department of Commerce: The department of the US government responsible for promoting economic growth.
IndiaAI Compute Capacity: A key pillar of the IndiaAI Mission focused on providing high-end compute power, including GPUs, to various stakeholders at affordable costs.
Electronic Design Automation EDA tools: Software tools used for designing electronic systems such as integrated circuits and printed circuit boards.
† O.I.H
GOVERNMENT OF INDIA
MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY
LOK SABHA
UNSTARRED QUESTION NO. 1703
TO BE ANSWERED ON: 30.07.2025
DLI POLICY OF ISM
†1703. SHRI IMRAN MASOOD:
Will the Minister of ELECTRONICS AND INFORMATION TECHNOLOGY be pleased to state:
(a) the details of assessment made by the Government on impact of US export restrictions on
availability and procurement cost of Artificial Intelligence (AI) chips Graphic Processing Units
(GPUs) on India’s AI development;
(b) the details of the steps being taken by the Government through Public Private Partnerships
(PPP) to strengthen the AI infrastructure under the National AI Mission;
(c) the efforts being made by the Government under the Design Linked Incentive (DLI) policy of
the India Semiconductor Mission (ISM) to develop design and to promote production of AI and
semiconductor chips;
(d) whether the Government has any plan to enhance funding for Indian corporates, MSMEs,
startups and exporters under the DLI Policy;
(e) if so, the time by which it is likely to be enhanced and the details of the funds allocation; and
(f) the manner in which the collaboration is being made by the Government with global technology
leaders to strengthen India's AI infrastructure?
ANSWER
MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY
(SHRI JITIN PRASADA)
(a), (b) and (f): On 15th January 2025, United States Department of Commerce issued AI Diffusion
Rules which provided for export control and licensing regulations. On 13th May, 2025 the rule
was rescinded. On 23rd July, 2025, United States has published its AI Action Plan under which
there are no export restrictions imposed that can impact India's AI development.
In line with Prime Minister Shri Narendra Modi's vision, the Government is making technology
accessible to all. The focus is on democratizing the development and use of Artificial Intelligence
(AI) for real-world problems, ultimately improving lives across various sectors.
India’s AI strategy:
India’s AI strategy aims to position India as a global leader in artificial intelligence. Government
launched IndiaAI mission in March 2024. It is a strategic initiative to establish a robust and
inclusive AI ecosystem aligned with India's development goals.The IndiaAI Mission comprises of the following 7 key pillars:
• IndiaAI Compute Capacity: It aims to provide high-end compute power (GPUs) to all,
including MSMEs and startups, at an affordable cost.
Aspect Details
Total GPUs Provisioned 34,381 GPUs through the IndiaAI Compute Portal
Academia, MSMEs, startups, research community,
Beneficiaries
government bodies, etc
GPUs provided at discounted rates with 40% cost
Pricing Support
supported by the Government
Around ₹67 per GPU-hour (less than 1 USD), which is
Average Price on Portal
one-third of the global average
Nvidia H100, H200, B200; Intel Gaudi 2 & 3; AMD
Types of GPUs Available
MI300X, etc
• IndiaAI Foundation Models: To develop India’s own Large Multimodal Models (LMMs)
trained on Indian datasets and languages. This is to ensure sovereign capability and global
competitiveness in generative AI.
• AIKosh: To develop large datasets for training AI models. AIKosh is a unified data platform
integrating datasets from government and non-government sources.
• IndiaAI Application Development Initiative: This pillar aims to develop AI applications for
India specific challenges in sectors such as climate change and disaster management,
healthcare, agriculture, governance, and assistive technologies for learning disabilities.
• IndiaAI FutureSkills: To develop AI skilled professionals in India by increasing the number
of graduates, post-graduate and PhDs in AI domain. It also envisions setting up Data and AI
Labs in Tier 2 and Tier 3 cities across India.
• IndiaAI Startup Financing: To provide financial assistance to AI start-ups.
• Safe & Trusted AI: To balance innovation with strong governance frameworks to ensure
responsible AI adoption.
Shaping global debate on AI:
• India is actively participating in shaping global debate on development, usage and safety of
AI.
• India was the founder chair of Global Partnership on Artificial Intelligence (GPAI).
• India was able to carve out consensus on AI during the G20 communique.
• India is poised to host the AI Impact Summit in February 2026. It will bring governments,
international institutions, start-ups, private sector companies and academia on one platform.
(c) to (e): The Government has approved the ‘Semicon India programme’ with a total outlay of
₹76,000 crore for the development of semiconductor and display manufacturing ecosystem in the
country. The ‘Design Linked Incentive (DLI) Scheme’ has been approved as part of the ‘Semicon
India programme’ to support domestic companies, startups and MSMEs.
Designing and commercializing a semiconductor product involves high entry barriers, long
development timelines, and global competition.To address these challenges, the DLI Scheme provides design infrastructure support, such as
Electronic Design Automation (EDA) tools and Intellectual Property (IP) cores, to help with early
prototyping of designs. The scheme also provides financial incentives of up to 50% of eligible
costs, with a ceiling of ₹15 Crore per application for design prototyping, scaling-up and volume
production. To enable companies to deploy and commercialize their Intellectual Property (IP)
cores, chips, and System-on-Chip (SoC) solutions, the scheme offers financial incentives ranging
from 6% to 4% of net sales turnover, up to ₹30 Crore per application over five years.
72 domestic companies have been approved under the DLI Scheme for access to state-of-the-art
Electronic Design Automation (EDA) tools. These companies are at different stages of developing
semiconductor designs for various applications. Out of these, 23 companies have also been
approved for financial support for developing SoCs for surveillance camera, energy meter,
microprocessor IPs, networking applications etc.
Ten (10) companies have raised venture company (VC) funding for scaling-up their design
prototypes for commercialization. Six (6) companies have successfully taped out their prototype
designs at advanced and mature technology nodes of various semiconductor foundries. Further,
funds under the DLI Scheme are released to the companies on regular basis on meeting specific
milestones.
The DLI Scheme is being implemented in close consultation with stakeholders and beneficiary
companies. Any modifications required will be made as and when necessary.
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