Semicon 2.0 scheme opens funding route for chip-design startups

The Ministry of Electronics and Information Technology (MeitY) on August 31, 2026, notified the Semicon 2.0 scheme in India, offering funding support to eligible startups and micro, small and medium enterprises (MSMEs) in the chip-design sector.

Under the scheme, eligible companies can receive milestone-linked seed funding of 50% of the project cost, capped at ₹15 crore, whichever is lower. The structure links the release of funding to project milestones, according to the details of the scheme.

The scheme covers startups and companies owned by Indian citizens or Overseas Citizens of India (OCIs). It therefore sets an eligibility requirement around ownership, alongside the focus on chip-design businesses.

Companies that already have venture capital or private equity funding can receive equity co-investment under Semicon 2.0. The co-investment will be offered on terms similar to those provided by the companies’ existing investors.

Funding structure

The seed-funding provision combines a percentage-based limit with an absolute cap. Applicants may be eligible for up to half of their project cost, but the support cannot exceed ₹15 crore. The applicable amount will therefore depend on the project cost and the scheme’s eligibility conditions.

For companies backed by venture capital or private equity investors, the separate equity co-investment provision allows funding on terms similar to those offered by those investors. The notified scheme does not specify in the available details how the milestones will be assessed or the process for applications.

Semicon 2.0 provides a formal funding route for eligible Indian-owned startups and MSMEs working in chip design. Its notified provisions cover both milestone-linked seed funding for eligible applicants and equity co-investment for companies with existing venture capital or private equity backing.