Recognising that science-led innovation takes time, India has updated its startup policy to better support deep tech companies operating in areas such as space, semiconductors, and biotechnology. The move reflects a shift toward longer-term thinking as the country works to strengthen its innovation and research ecosystem.
Under the revised framework announced this week, deep tech startups will now be classified as startups for up to 20 years, double the earlier limit. The revenue ceiling for accessing startup-related tax, grant, and regulatory benefits has also been raised to ₹3 billion, from ₹1 billion earlier. The change is designed to match policy timelines with the extended development cycles typical of engineering- and research-driven businesses.
The policy update is part of a broader push that combines regulatory reform with public capital. This includes the ₹1 trillion Research, Development and Innovation Fund announced last year to provide patient financing for R&D-focused companies. In parallel, US and Indian venture firms have launched the India Deep Tech Alliance, a private investor group of over $1 billion that includes Accel, Blume Ventures, Celesta Capital, Premji Invest, Ideaspring Capital, Qualcomm Ventures, and Kalaari Capital, with Nvidia acting as an adviser.
Investors say the earlier framework often forced companies into a “false failure signal” by withdrawing startup status while they were still pre-commercial. “By formally recognizing deep tech as different, the policy reduces friction in fundraising, follow-on capital, and engagement with the state,” said Vishesh Rajaram of Speciale Invest, speaking to a technology publication.
Access to capital beyond early stages remains a concern. “The biggest gap has historically been funding depth at Series A and beyond,” Rajaram noted. Arun Kumar of Celesta Capital said the RDI framework aims to address this by routing public capital through venture funds with structures similar to private capital.
Siddarth Pai of 3one4 Capital said the new rules avoid a “graduation cliff” that previously cut companies off from support just as they began to scale. He added that the RDI fund is now moving into an operational phase, with fund managers being selected.
Funding data shows renewed momentum. Indian deep tech startups raised $1.65 billion in 2025, up from $1.1 billion in each of the prior 2 years, after peaking at $2 billion in 2022, according to Tracxn. In contrast, US deep tech startups raised about $147 billion in 2025, while China accounted for roughly $81 billion.
For global investors, the change signals long-term intent. “Deep tech companies operate on 7- to 12-year horizons,” said Pratik Agarwal of Accel, adding that the extended framework improves confidence in policy stability.
Whether the shift leads to more globally competitive Indian deep tech firms will be the real test in the decade ahead.
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