Background
Deep‑tech ventures such as space, semiconductors and biotech typically require longer development cycles than conventional startups. Recognising this, the Indian government has revised its startup framework to better align policy support with the realities of science‑ and engineering‑driven businesses.
Key Policy Changes
- Eligibility period for deep‑tech companies to be classified as startups extended from 10 to 20 years.
- Revenue ceiling for startup‑specific tax, grant and regulatory benefits raised from ₹1 billion to ₹3 billion (≈ $33 million).
- Introduction of the RDI Fund, a hybrid fund‑of‑funds and direct‑investment vehicle that can also provide credit and grants.
Impact on Funding Landscape
The changes come as India’s deep‑tech sector has raised $8.54 billion to date, with $1.65 billion in 2025—a rebound after a dip in 2023‑24. The higher revenue threshold and longer eligibility are expected to:
- Encourage longer‑horizon investors to commit capital.
- Reduce pressure on startups to relocate overseas for later‑stage funding.
- Create a nucleus for additional private‑capital formation around the RDI Fund.
Comparative Global Context
In 2025, U.S. deep‑tech startups attracted about $147 billion, while China raised roughly $81 billion. India’s $1.65 billion represents less than 2 % of the U.S. total, underscoring the scale gap but also the growth potential.
Challenges and Outlook
Even with abundant engineering talent, India must overcome capital intensity and build a critical mass of globally competitive deep‑tech firms. Success will be measured by the emergence of Indian companies that can compete on the world stage and by sustained investor confidence.