New Delhi, July 17 -- To help India's chip design startups overcome a chronic shortage of patient capital, the government plans to co-invest alongside venture capital (VC) funds, at least in the early funding rounds, under its Rs.1.27 trillion Semicon 2.0 programme. Under the scheme unveiled on Wednesday, the government will match private investments in eligible startups in return for equity to reduce funding gaps in one of the country's most capital-intensive technology sectors.

Amitesh Sinha, additional secretary at the ministry of electronics and information technology (Meity) and chief executive of India Semiconductor Mission, told Mint that the equity-based co-investment plan is designed to fill up a lack of ample deep-tech funds av...