- Apr 16, 2026
Staff Report | PNN
Deep tech startups working in sectors such as space, semiconductors and biotechnology typically require longer timeframes to achieve commercial success. Taking this reality into account, the Indian government has introduced significant changes to its startup policy.
Under the new policy, deep tech companies will be recognized as “startups” for up to 20 years, compared to the previous limit of 10 years. Additionally, the annual revenue threshold for receiving startup benefits—such as tax exemptions, government grants and policy support—has been increased to 300 crore rupees from the earlier limit of 100 crore rupees.
According to the government, these reforms are aimed at aligning policy timelines with the extended research and development cycles required by science- and engineering-based ventures.
This policy reform is part of India’s broader strategy to build a long-term deep tech ecosystem. As part of this initiative, the government announced a one trillion rupee (approximately USD 11 billion) Research, Development and Innovation (RDI) fund last year. The fund aims to provide patient, long-term financing for research-driven companies.
Alongside government initiatives, private investment is also gaining momentum. Recently, venture capital firms from the United States and India jointly formed the “India Deep Tech Alliance,” a fund exceeding USD 1 billion. The alliance includes major investors such as Accel, Blume Ventures, Celesta Capital, Premji Invest and Qualcomm Ventures, with technology giant Nvidia serving as an advisor.
Deep tech investors note that under the previous policy, many companies lost their startup status before bringing products to market, creating negative investment signals. The new framework removes this “artificial pressure,” making it easier to secure funding and collaborate with government agencies.
However, experts caution that raising large-scale funding after the early stages—particularly at the Series A and beyond—remains a significant challenge. The RDI fund is expected to play a critical role in addressing this gap by channeling government capital through venture funds while maintaining commercial investment standards.
According to statistics, India’s share of the global deep tech market remains relatively small. Indian deep tech startups have raised a total of USD 8.54 billion to date. However, momentum has returned, with investment in the sector reaching USD 1.65 billion in 2025—an increase compared to the previous two years.
Analysts point out that increased investment in national priority sectors such as defense, advanced manufacturing, climate technology and semiconductors signals a long-term strategic vision. By comparison, deep tech investment in the United States stands at approximately USD 147 billion, while China has attracted USD 81 billion.
Despite this gap, investors believe the policy stability message will boost global investor confidence. Assurance of long-term policy continuity will encourage deep tech startups to scale within India.
Experts conclude that the true measure of success of these policy reforms will be whether India can produce several globally competitive deep tech companies over the next decade.
