Innovation Ecosystem for Deep Tech

Posted 17 May 2025

Updated 23 May 2025

3 min read

Why in the News?

Union Minister for Commerce and Industry urged Indian startups to focus more on Deep tech innovation.

Deep Technology or Deep Tech refers to innovations founded on advanced scientific and technological breakthroughs, encompassing various technologies (refer infographic).
DeepTech startups utilize existing advanced technologies to create novel-to-market solutions for complex and often unresolved problems or to invent even more advanced technologies rooted in core science and engineering fundamentals.

Extent: India's deep-tech ecosystem, currently at around 4,000 start-ups, is expected to reach 10,000 by 2030 according to estimates by the Department for Promotion of Industry and Internal Trade.
Global Standing: Despite having third largest pool of DeepTech startups, India ranked 6^th among the top 9 DeepTech ecosystems in the world in 2023 (Nasscom).
Funding: As per Nasscom, India's 4,000 deep-tech startups attracted $1.6 billion in 2024, a 78 per cent increase year-on-year.
Examples:
- Agnikul Cosmos startup launched the world's first rocket with a single-piece 3d-printed rocket engine.
- ImmunoAct, IIT Bombay and Tata Memorial Hospital developed an indigenous CAR-T cell therapy to treat Cancer.
- ideaForge Technology is revolutionizing the UAV market with its advanced drones.

Lagging Institutional Support: According to a study commissioned by the Office of the Principal Scientific Advisor, only one in six public-funded research and development organisations provide support to 'deep tech' startups in India

Inconsistent Funding: In 2023, Indian Deep Tech startups saw a decline in funding over the previous year, but it increased in 2024.
- Also, India's venture capital (VC) landscape prioritises quick returns over patient capital.
Long Gestation Period: Deep tech startup provides Extended development timelines and high capital intensity, and also carry large technical uncertainty, which presents a large risk.
Focus on Consumption-Driven Startups: India's startup boom has largely been fuelled by consumer-facing businesses rather than deep-tech breakthroughs.
Regulatory Hurdles: Lack of universal consensus in regulations relating to Deep Tech, policy uncertainty like scrapped angel tax, red tape and a risk-averse investment culture hinder progress.
Education and Research Infrastructure: Indian universities rarely rank among global leaders in original research, and this quality gap results in the migration of Indian talent to foreign destinations.
Limited Academia-Industry Collaboration: It hinders prototyping and commercializing of research outcomes, hindering the development of the Deep Tech ecosystem.

Spinouts: Enabling and facilitating labs/institutes to generate more spinouts can lead to a self-perpetuating cycle of the generation of deep-tech startups and generate external revenue for labs/institutes to advance further research.
Infrastructure Creation: Identify and strengthen innovation clusters, especially in five focus sectors (Medical Devices, Space, Defence, Agriculture, and Manufacturing).
- Also, establish dedicated R&D facilities with high-performance computing resources, simulation tools and testbed environments.
Foster Investment Ecosystem: Establish co-investment programs with Venture Capitalists (VCs), introduce government-backed instruments and simplify regulatory processes related to VC investments.
- Also, India needs to bridge the gap in investor knowledge regarding DeepTech and address challenge of investor security through loan guarantees, regulatory sandboxes etc.
Policy Incentives for R&D: Provide grants/access to regulatory sandboxes to prototype and test, facilitate platforms connecting startups with enterprises and introduce tax credits for DeepTech R&D expenditure.
Implementation of National DeepTech Startup Policy (NDTSP): Develop a comprehensive roadmap for the implementation of NDTSP and establish monitoring and evaluation mechanisms to track the progress.