India’s Deep Tech Revolution: A 20-Year Vision
India is making a bold move to foster a thriving deep tech ecosystem, extending the period for recognizing companies as startups to 20 years and raising the revenue threshold for benefits. This shift acknowledges the lengthy development cycles inherent in sectors like space, semiconductors, and biotechnology, aiming to unlock significant potential for innovation and economic growth.
Addressing the ‘False Failure Signal’
Previously, Indian startups faced a time constraint that often forced them to seek rapid commercialization, even before their technologies were fully mature. This created a “false failure signal,” as Vishesh Rajaram, founding partner at Speciale Invest, explained. The latest framework removes this pressure, allowing deep tech companies to focus on research and development without the immediate threat of losing crucial government support.
Fueling Growth with Public and Private Capital
The government’s commitment extends beyond regulatory changes. The ₹1 trillion (approximately $11 billion) Research, Development and Innovation (RDI) Fund is designed to provide patient capital for science-led companies. This is being complemented by private investment, exemplified by the India Deep Tech Alliance – a $1 billion-plus coalition including Accel, Blume Ventures, and Qualcomm Ventures, with Nvidia as an advisor.
Beyond Early Stages: The Funding Gap
While early-stage funding is becoming more accessible, a significant gap remains in Series A and beyond, particularly for capital-intensive deep tech ventures. The RDI fund aims to address this by routing public capital through venture funds, providing follow-on funding without disrupting private investment criteria. Arun Kumar, managing partner at Celesta Capital, highlights the fund’s role in increasing funding availability at crucial growth stages.
A Shift Towards Longer-Horizon Investing
The policy changes signal a broader shift towards longer-term investment horizons. Pratik Agarwal, a partner at Accel, notes that the extended recognition period provides investors with greater confidence that the policy environment will remain stable throughout the lengthy development process. This is a crucial step in attracting both domestic and international investment.
India’s Deep Tech Funding Landscape: Current Status
While still emerging, India’s deep tech market is showing promising momentum. In 2025, Indian deep tech startups raised $1.65 billion, a significant rebound from the previous two years. This growth is particularly evident in areas aligned with national priorities, such as advanced manufacturing, defense, climate technologies, and semiconductors. However, this pales in comparison to the U.S. ($147 billion) and China ($81 billion) in the same year, highlighting the scale of the challenge.
The RDI Fund: A Catalyst for Growth
The RDI Fund is designed to be more than just a fund-of-funds. It will also take direct positions and provide credit and grants, creating a more comprehensive support system for deep tech startups. This multi-faceted approach aims to address the unique challenges faced by these companies and foster a vibrant ecosystem.
Will Startups Stay in India?
The extended runway provided by the new framework strengthens the incentive for deep tech companies to build and remain in India. However, access to capital and customers will continue to be key factors influencing their decisions. India’s growing public markets, with an increasing appetite for venture-backed tech companies, offer a promising alternative to overseas listings.
Frequently Asked Questions
- What is the new startup recognition period in India? The period for recognizing deep tech companies as startups has been doubled to 20 years.
- What is the RDI Fund? The ₹1 trillion Research, Development and Innovation Fund is designed to provide patient capital for science-led companies.
- How much funding did Indian deep tech startups raise in 2025? They raised $1.65 billion in 2025.
- What sectors are considered ‘deep tech’? Sectors such as space, semiconductors, and biotechnology are considered deep tech.
Pro Tip: Deep tech companies should leverage the extended recognition period to focus on long-term R&D and build strong intellectual property portfolios.
What are your thoughts on India’s deep tech future? Share your insights in the comments below!
