In a significant update to its startup framework, the Indian government has announced a doubling of the duration for which deep tech companies can classify as startups, extending it to 20 years. This adjustment also raises the revenue ceiling for accessing startup-specific benefits from ₹1 billion (approximately $11.04 million) to ₹3 billion (around $33.12 million). These modifications aim to better align government policies with the lengthy development cycles typical in sectors driven by science and engineering.
This initiative is part of a broader strategy to foster a sustainable deep tech ecosystem in India, which includes the establishment of a ₹1 trillion (about $11 billion) Research, Development and Innovation Fund announced last year. This fund seeks to provide long-term financial support for research-centric companies. Additionally, a coalition of U.S. and Indian venture firms has formed the India Deep Tech Alliance, a private investment group exceeding $1 billion, featuring notable participants such as Accel, Qualcomm Ventures, and others, with Nvidia offering advisory support.
Vishesh Rajaram, founding partner at Speciale Invest, highlighted that the previous framework created undue pressure on startups, often penalizing them before they achieved commercial viability. By officially distinguishing deep tech ventures, the new policy aims to alleviate hurdles in fundraising and government interactions, enhancing the operational environment for founders. However, investors still express concerns about the ongoing challenges related to capital access, particularly at the Series A stage and beyond.