India Targets $25 Billion Deep Tech Investment to Reduce Foreign Reliance

Government and Private Capital Funding Structure

The funding strategy centers on the government’s $11 billion commitment to the Research Development Infrastructure Fund. Rajat Tandon, president of the IVCA, stated that this public capital will be matched by private equity and venture capital fund managers. With an additional $3 billion to $4 billion expected from other sources, the total investment capacity is projected to reach $25 billion. This represents a significant scale-up from the $11.6 billion invested in the sector over the previous decade.

Strategic Shift Amid Geopolitical Tensions

The push for indigenous technology capabilities is driven by concerns over global supply chain vulnerabilities. Anandamoy Roychowdhury, managing director of Crane Venture Partners, noted that U.S. tariffs and export restrictions have heightened the risk that critical technology could be cut off unexpectedly. This concern became tangible in June, when Anthropic disabled access to its Fable 5 and Mythos 5 models for foreign nationals in compliance with U.S. export-control directives.

While China leads alongside the U.S. in the global AI race, India maintains a cautious stance toward Chinese technology. Consequently, officials and industry leaders are prioritizing local development to ensure national security and technological autonomy.

Early-Stage Growth and Commercialization

Despite the current reliance on foreign technology, the Indian ecosystem is seeing rapid movement from prototype development to commercialization. Earlier this year, companies including space tech firm Skyroot, full-stack sovereign AI company Sarvam, and the startup Emergent achieved unicorn status with valuations exceeding $1 billion. Shweta Rajpal Kohli, president and chief executive of the Startup Policy Forum, described this as a “dramatic acceleration of innovation.”

The growth comes even as broader startup funding in India has faced recent declines. In 2025, the deep tech sector secured nearly $3 billion in funding, marking its highest level to date, according to an IVCA report surveying 100 funds. However, a significant funding gap remains when compared to the U.S., where $136 billion was raised in the same sector.

Challenges in Scaling Domestic Investments

A primary obstacle for Indian deep tech firms is the scarcity of domestic capital for long-gestation projects. Tandon noted that only 2% of people in India are currently capable of signing checks exceeding $10 million. Industry analysts have also pointed out that much of the existing government and foreign expenditure has focused on infrastructure like data centers or semiconductor fabrication plants rather than local research and development. Observers suggest that the long-term success of the $25 billion initiative will depend on whether private capital can effectively match the scale and pace of public funding to produce globally competitive companies.

Frequently Asked Questions About India’s Deep Tech Push

What specific technologies are included in the $25 billion plan?

The funding targets high-barrier sectors, including artificial intelligence, semiconductors, advanced manufacturing, drones, and space technology.

How does the government intend to reach the $25 billion goal?

The government is committing $11 billion through the Research Development Infrastructure Fund, which is designed to be matched by private equity and venture capital managers, with an additional $3 billion to $4 billion in further capital expected.

Why is India prioritizing domestic deep tech over foreign imports?

Industry experts cite geopolitical tensions and the unreliability of foreign technology access—such as U.S. export controls and restrictions—as primary reasons for the government’s push to build indigenous capabilities.

Indian investment funds are deploying capital into deep tech startups

In a recent survey of 100 investment funds in India, nine out of ten reported that they are currently deploying capital into deep tech startups, with 37% of these funds holding a stake in between 11 and 20 such companies.