Deep-tech startups in the fields of space technologies, semiconductors, and biotechnology require significantly longer development paths than traditional venture-backed companies. That is why India is adapting startup rules and directing public capital to support more such companies so they can enter commercial markets.
This week, India’s government updated the startup support framework: the period during which deep-tech companies are considered startups has been doubled to 20 years, and the income threshold for benefits has been raised to ₹3 billion (approximately $33.12 million) from ₹1 billion previously. The change aims to align policy with the long development cycles of science- and engineering-oriented businesses.
«Formal recognition of deep technology as outstanding reduces barriers to attracting capital, subsequent financing, and interaction with the state, which is fully reflected in the founders’ day-to-day operations over time.»
Financial ecosystem and long-term investments
Such steps are part of broader efforts to build a long-term deep-tech ecosystem: regulatory reforms coupled with public funding, including an ₹1 trillion RDI fund (approximately $11 billion). This fund aims to expand patient financing for science-oriented and research-and-innovation-driven companies.
As part of the US–India initiative, the India Deep Tech Alliance was formed – a coalition of private investors that pools over $1 billion and includes Accel, Blume Ventures, Celesta Capital, Premji Invest, Ideaspring Capital, Qualcomm Ventures, and Kalaari Capital; Nvidia serves as an advisor.
According to Vishesh Rajaram, co-founder and partner at Speciale Invest, these changes aim to reduce early-stage risk-taking and avoid a “false signal of failure” when science and engineering projects are evaluated by political criteria rather than technical ones.
«By formally recognizing deep technology as outstanding, policy reduces friction in attracting capital, subsequent financing, and engagement with the government, which is reflected at the founder’s operational level over time.»
However, experts note that access to funding remains a constraining factor outside the early rounds. “The biggest gap historically has been in deep financing at Series A stages and beyond, especially for capital-intensive deep-tech companies,” he said. The RDI Fund is intended to complement existing financing mechanisms.
«The true value of the RDI framework lies in increasing available funding for deep-tech projects at early and growth stages»
According to Tracxn, India is still viewed as a key but not the only source of deep technologies. Total investments in these projects reached about $8.54 billion; in 2025, $1.65 billion was recorded – a rebound after peaking at $2 billion in 2022. This points to a revival of momentum and a need for government reforms to attract longer-term investments.
«Overall, the uptick in funding signals a gradual shift toward longer-term investments»
Compared with the United States, India in 2025 attracted about $147 billion into its deep-tech projects, far less than the United States, while China accumulated about $81 billion. Yet experts anticipate increased investment activity in the mid term thanks to these reforms.
«It would be wonderful to see ten globally competitive deep-tech companies from India achieve sustainable success over the next decade»
