India has overhauled its startup framework to better support deep tech ventures in sectors such as space, semiconductors and biotech-industries that require long gestation cycles before commercialization. The government has doubled the period for which deep tech firms can retain startup status to 20 years and raised the revenue ceiling for availing tax, grant and regulatory benefits to ₹3 billion (about $33 million), up from ₹1 billion earlier.
The reform aligns policy timelines with the realities of science-led businesses, which often risked losing startup status before reaching market readiness. Investors had described the earlier system as creating a “false failure signal,” judging frontier technologies by short-term metrics rather than technological progress.
The policy shift complements last year’s ₹1 trillion Research, Development and Innovation (RDI) Fund aimed at expanding patient capital for R&D-driven firms. Alongside public funding, private players including Accel, Blume Ventures, Celesta Capital, Premji Invest, Qualcomm Ventures and others have formed the India Deep Tech Alliance, a $1 billion-plus coalition, with Nvidia as adviser.
Despite renewed momentum—Indian deep tech startups raised $1.65 billion in 2025—India remains far behind the U.S. ($147 billion) and China ($81 billion) in deep tech capital deployment. Investors say the bigger gap lies beyond early-stage funding, particularly at Series A and growth stages, where capital intensity rises sharply.
For global investors, the extended startup runway signals long-term policy commitment. While not an immediate catalyst for capital reallocation, it strengthens confidence that India is building a stable, patient framework for frontier innovation. The ultimate benchmark, however, will be whether India can produce globally competitive deep tech champions over the next decade.
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