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DeepTech & Innovation

DeepTech in India: The Government's High-Priority Growth Engine

How India's 2026 Budget, extended eligibility criteria, and strategic funding are positioning DeepTech as the cornerstone of India's innovation economy

14 min read
Updated with Budget 2026

India is rapidly positioning itself as a global DeepTech powerhouse. With strategic policy support, increased public funding, and strong ecosystem backing, DeepTech has become one of the most highly focused sectors under India's innovation and startup agenda.

Unlike traditional startups that build incremental digital solutions, DeepTech ventures are driven by advanced scientific research and breakthrough technologies. These startups work on long-gestation, high-impact innovations that solve complex national and global challenges.

Today, DeepTech is not just a trend — it is a national priority, backed by ₹1 lakh crore in funding and revolutionary policy changes that extend startup recognition to 20 years.

Understanding DeepTech

What is DeepTech?

DeepTech startups are innovation-driven companies building solutions based on advanced technologies

Artificial Intelligence & Machine Learning

Advanced AI models, machine learning algorithms, and intelligent automation solutions

+78% YoY

Semiconductors & Electronics

Chip design, RISC-V architectures, AI accelerators, and OSAT models

₹40,000 Cr allocation

Quantum Computing

Quantum sensing, cryptography, and thematic hubs for national security

National Mission Active

Space Technology

Satellite systems, launch vehicles, and space-based applications

Private sector opened

Defence & Aerospace

Indigenous defence systems, drones, and aerospace technologies

Atmanirbhar focus

Biotechnology & Life Sciences

Advanced biotech solutions, genomics, and healthcare innovation

High R&D priority

Clean Energy & Climate Tech

Green hydrogen, carbon capture, and climate adaptation technologies

₹3,533 Cr dedicated

Advanced Manufacturing

Robotics, automation, and Industry 4.0 technologies

Rapid adoption

These ventures typically involve high R&D intensity, strong IP creation, and long development cycles. They require patient capital, deep expertise, and sustained commitment to bring breakthrough innovations to market.

National Priority

Why DeepTech is a High Focus Sector for India

The Government of India has clearly indicated its long-term commitment to DeepTech through policy reforms and funding

Longer Development Cycles

20-year window recognizes that DeepTech requires extensive R&D, prototyping, and market validation

Higher Capital Requirements

₹300 crore cap acknowledges significant investment needed for advanced technology development

IP Creation Focus

Strong emphasis on intellectual property development and global competitiveness

Strategic National Importance

Supports India's goals in defence, semiconductor manufacturing, and energy security

Strategic & National Importance

Supports defence self-reliance, semiconductor manufacturing, energy security

Global Competitiveness

Competing with US, China, and Israel in advanced technology

High Economic Multiplier

Creates high-value IP, skilled employment, export potential

Atmanirbhar Bharat Vision

Key pillar of India's self-reliance mission

Budget 2026 Initiatives

Government Support for DeepTech Startups

The government has aligned multiple initiatives to promote DeepTech innovation

₹20,000 Crore RDI Fund

Private sector-driven research, development and innovation initiatives for FY 2026-27

Part of ₹1 lakh crore RDI Scheme

Deep Tech Fund of Funds

₹10,000 crore dedicated fund for early-stage deep-tech startups

Supports breakthrough technologies

Semiconductor Mission 2.0

₹40,000 crore for Electronics Component Manufacturing Scheme

IP-centric, fabless models focus

National Quantum Mission

Thematic Hubs (T-Hubs) operating as Section-8 companies

Quantum sensing & cryptography

Additional Support Mechanisms

  • Startup India recognition & extended tax benefits
  • Dedicated DeepTech funding through public schemes and FoF
  • Defence innovation programs and space sector reforms
  • Increased public R&D allocation across critical sectors
Revolutionary Changes

New Eligibility Criteria for DeepTech Startups

Game-changing revisions that recognize the unique nature of DeepTech ventures

20-Year Recognition Window

Extended from 10 years to 20 years for DeepTech startups

Before
10 years
After
20 years

₹300 Crore Turnover Cap

Higher annual turnover threshold for DeepTech ventures

Before
₹200 Cr
After
₹300 Cr

Tax Exemptions & Benefits

3-year tax holiday and simplified compliance for eligible startups

Before
Limited benefits
After
Extended benefits

Fast-Track Support

Accelerated patent examination and government tender access

Before
Standard process
After
Fast-track access

"These extended criteria reflect the government's understanding that DeepTech ventures require longer development cycles compared to traditional startups"

— DPIIT Gazette Notification, February 2026
Investment Opportunities

Key Sector Opportunities in DeepTech

High-potential areas with substantial government backing and market demand

High Priority

Semiconductor Design

AI accelerators, RISC-V designs, edge computing chips, and specialized ASICs with lower capital requirements

₹40,000 Cr ECMS
High Priority

Quantum Technologies

Quantum sensing, cryptography, and computing through National Quantum Mission T-Hubs

NQM allocation
High Priority

Green Energy Solutions

Green hydrogen, EV charging infrastructure, carbon capture, and climate adaptation

₹3,533 Cr dedicated
High Priority

AI Infrastructure

Advanced AI models, ML algorithms, and intelligent automation for industry applications

RDI Fund access
High Priority

Space & Defence

Private sector participation in satellites, launch vehicles, and indigenous defence systems

Government tenders
High Priority

Biotechnology

Genomics, healthcare innovation, and advanced life sciences solutions

Research grants

The DeepTech Ecosystem in Numbers

Unprecedented growth and momentum in India's DeepTech sector

3,600+
DeepTech Startups
Active across India as of 2026
$1.06B
Funding in H1 2025
Double the amount from 2024
$150B
Semiconductor Market
Projected opportunity by 2030
1M+
Jobs by 2026
In semiconductor sector alone

Why This Matters for Founders

If you are building in AI, semiconductor design, robotics, advanced manufacturing, biotech, or climate innovation — this is the most policy-supportive phase India has seen.

Key Advantages for DeepTech Founders:

  • Longer eligibility window (20 years) — Recognize your long R&D cycles
  • Higher turnover cap (₹300 Cr) — Scale without losing benefits
  • Increased grant and non-dilutive funding — Build without excessive dilution
  • Growing investor appetite for DeepTech — 78% YoY funding growth

India is actively encouraging founders to build technology that is globally competitive and strategically relevant. The ecosystem has matured beyond just software — hardware, materials, quantum, and biotech are now mainstream focus areas.

The Road Ahead

DeepTech will define India's next decade of growth. With strong government backing, structured funding mechanisms, and mission-driven policies, this sector is no longer niche — it is central to national development.

The recent Budget 2026 announcements, combined with the extended eligibility criteria and dedicated funding pools, signal that India is committed to becoming a global DeepTech leader, not just a follower.

For founders, incubators, and investors, this is the right time to align with India's DeepTech vision and build innovation that creates long-term impact.

The convergence of policy support, capital availability, and market demand creates a unique window of opportunity. Whether you're working on semiconductors, quantum computing, green energy, or biotech — India's DeepTech moment is now.

Frequently Asked Questions

Common questions about DeepTech startups and government support in India

DeepTech startups are defined as entities developing novel, science- and engineering-led solutions using advanced technologies such as AI, ML, IoT, Blockchain, Robotics, AR/VR, Drones, Advanced Manufacturing, Semiconductors, Quantum Technologies, Biotechnology, Climate Tech, and more. To qualify, startups must be incorporated for up to 20 years and have annual turnover not exceeding ₹300 crore.
Key benefits include: 20-year eligibility window (double that of regular startups), ₹300 crore turnover cap, 3-year tax holiday, self-certification under labor and environmental laws, access to ₹1 lakh crore RDI Fund, fast-track patent examination, simplified compliance, government tender access, and dedicated Deep Tech Fund of Funds support.
Budget 2026-27 announced ₹20,000 crore for private sector-driven RDI initiatives as part of the larger ₹1 lakh crore RDI Scheme. Additionally, ₹10,000 crore Deep Tech Fund of Funds was announced, ₹40,000 crore for Semiconductor Mission 2.0, and ₹3,533 crore for green energy DeepTech solutions.
Semiconductor Mission 2.0 focuses on hardware depth and IP ownership, pivoting from assembly-led incentives to IP-centric, fabless, and OSAT models. With ₹40,000 crore allocated for ECMS, it emphasizes AI accelerators, RISC-V-based designs, edge computing chips, and specialized ASICs that require less capital and align with venture economics.
The National Quantum Mission has moved past policy phase to creating tangible Thematic Hubs (T-Hubs) that function as Section-8 companies. This unique structure allows academic institutions to operate with corporate agility, fostering deep-tech spinoffs in quantum sensing and cryptography critical for future-proofing national security.
The Startup India Seed Fund Scheme (SISFS) has a ₹945 crore corpus designed to support approximately 3,600 startups through 300 eligible incubators. It operates on a decentralized model that avoids bureaucratic bottlenecks and is particularly accessible for founders in the 18-24 month zone between idea and market.
DeepTech supports India's strategic goals in defence self-reliance, semiconductor manufacturing, energy security, and healthcare innovation. It creates high-value intellectual property, skilled employment, and export potential. With a high economic multiplier effect, DeepTech is central to India's vision of becoming a global technology leader and achieving Atmanirbhar Bharat.

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SetuBridge Solutions helps DeepTech startups navigate government schemes, secure funding, and access the ₹1 lakh crore RDI ecosystem. Let us help you become part of India's DeepTech revolution.

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