By -Asmita Lekhi, Daksh Sahi and Aarav Beniwal
Towards a Thriving Deep Tech Ecosystem in India
India’s deep tech startup landscape is at an epochal juncture. 2024 saw frontier technology ventures attract roughly $1.6 billion in funding, a 78% jump from the previous year. Over 480 new deep tech startups launched in 2023 alone, bringing the total close to 4,000. From AI-driven software platforms dominating funding to private rockets reaching orbit, the momentum is undeniable. Yet the nation’s aspirations, to make deep tech a cornerstone of a future $10 trillion economy, hinge on addressing critical gaps in funding, policy support, and ecosystem maturity. So what it will take for India to foster a thriving deep tech startup ecosystem, fitting for investors, policymakers, founders, and global partners.
Scale, Structure, and Channels
Massive capital requirements are a prerequisite to nurturing a nation wide Deep tech startup ecosystem. These are capital-intensive and demand “patient” investments due to long R&D cycles and delayed revenues. Founders warn that without sustained funding beyond the seed stage, India could squander its current momentum. Although Indian deep tech companies raised an estimated $10 billion over the last five years, funding dipped sharply, 77% drop in 2023 vs 2022 amid a global downturn. By contrast, global deep tech investment was $40 billion in 2023, highlighting the scale of capital India must mobilise to become a leading player. NASSCOM, India’s tech industry body, has advocated a central fund to channel at least ₹10,000 crore ($1.25 billion) into deep tech ventures over the next decade, alongside complementary private capital. Indeed, the government’s Union Budget 2025 allocated ₹20,000 crore ($2.5 billion) to kickstart a one trillion rupee ($12 billion) R&D fund, with a dedicated Deep Tech Fund of Funds under consideration. These figures underscore that many billions of dollars in patient capital will be needed in coming years, not only to seed new startups but to fuel growth and commercialisation. To deploy such capital effectively, a widely accepted model is blended funding. One proposal vouched for by former NITI Aayog CEO, Amitabh Kant, is a Fund-of-Funds (FoF) with a 10-year horizon and matching capital from government to incentivise VCs . This model, akin to Israel’s successful Yozma program, would see public money partnering with established venture funds so that experienced investors select the startups, ensuring ₹10,000 crore “reaches the right builders”. The April 2025 announcement by the Indian Commerce Ministry of a ₹10,000 crore Deep Tech FoF (managed by SIDBI) focusing on early-stage AI, quantum, robotics, and biotech startups, is a pivotal first step in this direction. An initial ₹2,000 crore tranche will support startups navigating the treacherous “lab-to-market” transition. Such FoFs amplify impact by catalysing private investment and bringing sectoral expertise into funding decisions. Because deep tech often originates from scientific research, non-dilutive grants are critical at the nascent stage. NASSCOM has urged a two-tier grant system, a Proof-of-Concept grant of up to ₹2 crore ($230k) to validate core technology, followed by a prototype/pilot grant of ₹3 crore ($350k) for product development. These grants would derisk early experimentation before traditional VCs come on board. Likewise, infrastructure grants are needed in high-cost fields such as space, semiconductors, clean energy, etc. to help startups access premium labs, equipment, or fabrication facilities. Encouragingly, Budget 2024 earmarked ₹1,000 crore for a space economy fund and nearly ₹1 trillion for broader R&D, signalling intent to support deep tech infrastructure. India’s early-stage deep tech funding has historically lagged, seed funding, in the country home to third most unicorns across the world, is 50% lower than the global average. This shortfall at the seed/Series A stage is often due to perceived “science risk” and longer gestation. However, recent data shows improvement, in the first four months of 2025, deep tech startups raised $324 million across 35 deals, double the amount from the same period a year prior. Generalist venture funds such as Peak XV and Blume that once shied away from deep tech are now joining specialist funds in early rounds. To ensure continuity, the funding ladder must extend to growth stages as well. Later-stage deep tech ventures often require growth capital for manufacturing, scaling and global expansion, here, alternative financing can play a role. Venture lenders and asset financiers are beginning to step in, offering venture debt, project financing, or equipment leasing to deep tech startups with revenue visibility or valuable IP. Such instruments provide capital without immediate dilution, aligning with the ultra-marathon development timelines of deep tech. As one VC noted, a typical startup might generate $1 million revenue within 3–4 years, precisely when a conventional VC fund is looking to exit. Blending equity with debt financing through working capital loans or revenue-based financing during the scale-up phase can thus sustain companies over the longer term. Effectively deploying capital is equal an imperative as raising it. A network of channels is emerging in India, the SIDBIrun FoF will invest in VC funds, which in turn back startups. Domain-specific agencies are also crucial, BIRAC (Biotechnology Industry Research Assistance Council) provides grants and incubator support to biotech startups, while the India Semiconductor Mission (ISM) offers incentives for chip design startups and manufacturing consortia. State governments are joining in too; the southern most state, Tamil Nadu’s iTNT Hub (a Centre-state PPP) has set up over 120 incubators and offers seed funding for deep tech ventures in the state. Such hubs can act as localised funding conduits, disbursing grants, hosting challenges, and connecting academia with entrepreneurs. Going forward, India could consider thematic funds for AI and space among others under the FoF umbrella to ensure timely disbursal. Industry observers note that accelerating approval processes for public funds is vital so that startups get capital when they need it rather than after prolonged delays. Therefore, a multi-tier financing system, blending grants, public-private venture funding, and alternative debt, must underpin and propel India’s deep tech revolution.
The Ecosystem of Stakeholders: Roles and Collaboration
Building a thriving deep tech ecosystem requires an all-hands-on-deck approach. India’s experience in IT services and startup growth has shown that when government, industry, academia, and financiers work in tandem, innovation flourishes. In the deep tech context, each stakeholder has a distinct role as well. The public sector is both enabler and catalyst. Indian authorities have enacted 55+ reforms since 2016 to improve ease of doing business and reduce red tape for startups. The government’s role spans policy framework, funding support, infrastructure, and demand creation. On policy, a dedicated National Deep Tech Startup Policy (NDTSP) is in the works, reported to be in final consultations as of 2025. The policy will provide an overarching strategy. Early indications are that NDTSP will streamline IP licensing from academia, create new funding vehicles, and enable regulatory sandboxes for emerging tech. In funding, as discussed, the government is anchoring major funds (FoF, R&D grants) and missions such as the National Quantum Mission with ₹6,000 cr or $725 M budget to spur research. The state also provides infrastructure, from common facilities for semiconductor fabrication and testing to enabling access to ISRO’s space labs for private space startups. Crucially, government can be an early customer, by easing procurement rules, it can adopt startups’ solutions in defense, healthcare, agriculture, etc., giving them validation and revenue. Streamlining public procurement for startups is in fact a priority, notes NASSCOM’s deep tech head. Finally, the state sets vision and tone. Flagship programs like Digital India and Atmanirbhar Bharat (self-reliant India) spotlight technological self-sufficiency, signaling to all stakeholders that deep tech is a national priority. Furthermore, venture capital and private equity form the financial backbone for scaling innovation. Indian deep tech investment, while growing, is still a fraction of total startup funding, which has been dominated by e-commerce, fintech, and other asset-light models. But this is changing. India now hosts the world’s third-largest deep tech startup pool after the US and China with an estimated 3,600 – 4,000 companies, and investors are taking note. The average seed cheque size in deep tech has quintupled in recent years. Early-stage VC firms specialising in deep tech (Speciale Invest, Bharat Innovation Fund) have emerged, and larger funds are diversifying into deep tech deals. Private investors bring not just capital but mentorship, networks, and sectoral insight, all vital for R&D-heavy ventures. That said, VCs must adapt their models, traditional 5-7 year fund horizons and quick exit expectations don’t align well with deep tech development timelines. There is therefore a push for patient capital models, longer fund cycles, or alternative return structures. Some investors advocate that deep tech startups use venture debt and asset financing to complement VC equity. Additionally, corporate venture capital (CVC) is expected to play a larger role, industries like automotive, telecom, and pharma in India are now investing in startups that can complement their R&D. Tata and Reliance, two of India’s largest corporate houses, have incubated or funded startups in semiconductors and AI, seeing them as strategic to their supply chains. Private investors, both domestic and foreign, will ultimately decide if India’s deep tech boom is adequately financed; their increasing interest is an encouraging sign. Indubitably, deep tech thrives on the pipeline of ideas and talent from universities and labs. Over half of India’s deep tech startups originate from academic research environments . The country’s network of IITs, IISc, and national labs is a wellspring of innovation, from quantum physics experiments to AI algorithms, but historically, lab-to-market transition has been weak. This is changing through dedicated incubators and TTOs (technology transfer offices). Leading institutes now host incubation centers, which are often backed by DST or state funds, where professors and students launch startups. IIT Madras’s incubation cell supported the development of a domestic microprocessor, the “Shakti” project, that powered a startup’s semiconductor product. Academia also contributes by skilling the workforce, India produces a large number of engineers and science PhDs, though there’s a need for more deep tech specialists such chip designers and AI researchers. The PM Research Fellowships, 10,000 scholarships for doctoral students in science/tech over 5 years, is one recent effort to bolster the R&D talent base. To further link academia and industry, the upcoming NDTSP policy is anticipated to ease IP licensing so that university-owned patents can be more easily commercialised by startups and promote faculty entrepreneurship, hence, exhorting professors to found or advise startups. The creation of the National Research Foundation (NRF) in 2023, a new apex body to fund research with industry participation, also aims to break silos. In sum, academia’s role is to generate cutting-edge research and human capital, while forming tight symbiotic partnerships with entrepreneurs so that ideas don’t stagnate on paper but become products. Beyond providing capital through CVC arms, large corporations can integrate and scale deep tech innovations through partnerships. In sectors like automotive, manufacturing, and space, established companies offer testbeds and market access for startups. Global capability centers (GCCs) of MNCs in India, which are the R&D outposts of firms like Google and Siemens, can mentor or acquire deep tech startups to support their innovation. Domestic giants too are opening up as India’s largest automobile and steel companies are working with startups in EV batteries, materials, and robotics. Moreover, corporates can help solve the perennial deep tech challenge of limited domestic market demand. Indian deep tech founders often lament the lack of early local adopters, which forces them to seek global markets and thus raise more capital. If Indian corporations, including public sector undertakings, step up as first customers for homegrown tech, for instance, a state-run oil company buying from a cleantech startup, it would validate solutions and provide revenue traction. Policymakers are considering mandates or incentives for this; one recommendation is to have government departments and PSUs allocate 5% of procurement budgets to startups’ deep tech solutions. Such a policy could immediately create a domestic market pull. Lastly, corporates contribute by sharing domain expertise and even infrastructure. ISRO, as a unique “corporate” in the space sector, provides determining support to startups Skyroot and Agnikul with technical guidance and launch facilities, enabling them to build private rockets. This kind of resourcesharing and mentorship from established players dramatically increases a startup’s odds of success. It is common knowledge that deep tech innovation today is a global enterprise. International stakeholders, from foreign VCs to partner governments and research collaborators, are key components of India’s ecosystem. Foreign institutional investors have been actively funding Indian startups; venture capital inflows from the US, Japan, and Europe have filled the gap left by the recent decline in Chinese funding. Global tech companies such as Google, Intel, and Microsoft have also set up accelerators or incubators in India, plugging local startups into global networks. Besides, many Indian deep tech founders are diaspora returnees or have international experience, which naturally forges cross-border links. On the government side, India’s ties with other nations provide frameworks for cooperation ranging from joint R&D funds with countries like Israel, to multilateral forums like the Quad (U.S., Japan, Australia, India) focusing on tech supply chains. We will explore these partnerships in detail in a later section. The main point is that India’s deep tech ecosystem does not exist in isolation, it can leverage global capital, markets, and knowledge. A space-tech startup in Bangalore might get funded by an American VC, use a French testing facility, and launch via an ISRO rocket for an Australian client. Fostering these connections, while ensuring Indian interests like IP rights and strategic tech are safeguarded, is a balancing act for stakeholders. A vibrant deep tech ecosystem arises from synergy of government policy, investor risk-taking, academic innovation, corporate support, and global linkages reinforcing each other. India’s strengths, a large tech talent pool, entrepreneurial energy, and state support, give it a strong shot at this virtuous cycle.
India’s Strengths Across Deep Tech Domains
One reason for optimism about India’s deep tech future is the breadth of domains in which the country is developing capabilities. Indian startups and researchers are active in areas ranging from artificial intelligence to space tech. Here we outline current strengths and notable progress in five key deep tech domains.
Artificial Intelligence and Machine Learning
AI is the flagship of India’s deep tech wave, in 2024, fully 87% of all deep tech startup funding flowed into AI ventures. This reflects India’s sizeable talent base in data science and software engineering, as well as immediate commercial opportunities in AI-driven software platforms. Dozens of AI startups are tackling problems in vision, NLP, fintech, and healthcare. Notably, almost all of the top 10 deep tech funding deals in 2024 were AI-centric platforms addressing diverse use cases that include the likes of autonomous driving software, AI contract management, etc. India’s AI strength lies in application-driven innovation, companies leveraging AI to solve industry-specific issues like agritech or logistics optimisation both for domestic needs and export. On the research front, India ranks top-10 globally in AI research publications, and initiatives are underway to bolster core R&D, including the government’s plan to establish Centers of Excellence for AI and a national AI cloud platform, dubbed as IndiaAI. The country’s IT services heritage also means a wealth of IT data and enterprise problems that AI startups can tap into. Challenges remain such as limited proprietary chip/IP creation in AI, and relatively low AI adoption by SMEs, but India’s clear comparative advantage is its human capital. With companies like Google’s AI lab in India and open-source AI models being built for Indian languages, the nation is positioning to be not just a consumer of AI, but a contributor, especially in areas like multilingual AI, frugal AI solutions for developing economies, and AI safety frameworks. .
Quantum Computing and Quantum Tech
India has demonstrated strong intent in quantum technologies with the National Quantum Mission (NQM) launched in 2023. Backed by roughly ₹6,000 crore ($0.75 billion) over 8 years, NQM aims to foster indigenous quantum computers, targeting 50-qubit systems by 2026 and beyond, quantum communication infrastructure, and a skilled workforce. This investment, while modest compared to US or Chinese quantum budgets, is significant for a nascent field and illustrates India’s strategic prioritisation of quantum for strategic autonomy (secure communications, encryption). Early fruits include a Quantum Key Distribution trial by ISRO and academic prototypes of quantum simulators. A handful of startups, such as QNu Labs (quantum cybersecurity) and BosonQ (quantum software), are India’s standard bearers, though most applications remain in R&D stages. International collaboration is a key strength here, India is actively partnering with countries like France and Finland on quantum research, and even inviting Israeli startups to participate in its mission. Moreover, Australia’s and Canada’s expertise have been sought under multilateral forums. India’s prowess in mathematics and computer science could translate into niche expertise in quantum algorithms and errorcorrection techniques. Howbeit, it’s still early days, India’s near-term strength in quantum may lie in quantum software, algorithms, and education rather than hardware. With the global quantum race heating up, India at least now has a foot in the door with structured funding and growing international linkages to ensure it isn’t left behind.
Semiconductors and Chip Design
Semiconductors are the backbone of any tech ecosystem, and India has both strengths and gaps here. While the country currently imports most of its chips, it has a world-class chip design talent pool, many of the chips designed for global giants such as Intel, AMD, and Qualcomm have significant R&D done in India’s design centers. Capitalising on this, the government launched the India Semiconductor Mission (ISM) in late 2021, offering $10 billion in production-linked incentives to attract chip fabs and assembly/test plants. Progress is underway, a semiconductor assembly and testing facility by Micron Technology is being set up in Gujarat with ~$2.7 billion investment, and proposals for fabs are in evaluation. To spur homegrown innovation, ISM also includes design-linked incentives that grant financial support to fabless chip startups and design firms. A few startups like Signalchip and Saankhya Labs have developed indigenous chips for telecom and broadcasting, exhibiting proof of concept. India’s strategic partnership with the U.S. has led to the formation of a joint Semiconductor Supply Chain Taskforce (under the iCET initiative) aimed at coordinating on chip design and manufacturing alignment. Similar efforts may soon be more visible through the Trade and Technology Council (TTC) format collaboration that the world’s largest democracy has with the European Union. The EU operates TTC format cooperation only with the United States and India. In terms of strengths, India’s large market, it is the second-largest mobile phone base, gives it leverage to demand local production; its skilled engineers can handle chip design and verification; and government commitment is high, with several states vying to host semiconductor plants. In terms of challenges, fabrication is capital-heavy and technologically complex, the Vedanta-Foxconn fab attempt faced setbacks, underscoring the need for experienced partners. Still, India is carving a niche in semiconductor design and specialised manufacturing like compound semiconductors, packaging, and silicon-photonics where entry barriers are slightly lower. Also notable is India’s push in open-source chip architectures like RISC-V – the IIT-Madras developed Shakti processor is a principal example of academic-industry collaboration yielding a usable technology. If nurtured, such efforts could make India a hub for next-gen chip design and low-cost innovative semiconductors, even as mainstream fab capacity builds up slowly with foreign help.
Biotechnology and Healthcare Tech
India’s biotech sector stands on the solid foundation of a large pharmaceutical industry and world-class biomedical talent. The country is the world’s vaccine factory, supplying 60% of global vaccines, and showed innovative capacity during COVID-19 by developing an indigenous vaccine (Covaxin) and mass-producing others. This prowess extends to a growing cadre of biotech startups focusing on areas like genomics, molecular diagnostics, bioengineering, and biopharma. India’s advantages include relatively lower R&D costs, a vast pool of life science graduates, and diverse biological data. Government support through BIRAC has been a game-changer, its Biotechnology Ignition Grant and other schemes have funded hundreds of startups varying from a low-cost hepatitis test maker to agritech bio-companies. Public-private partnerships in biotech are strong, the Indian Genome Project and initiatives in precision medicine leverage both government labs and startups. In biotechnology, India is strong in frugal innovation, developing affordable healthcare devices and diagnostic kits for resource-limited settings, which not only serve domestic needs but also huge markets in the Global South. Another emerging area is bio-manufacturing, India’s large biopharma firms such as Serum Institute and Biocon are scaling production for any biotech startup with a promising drug or vaccine. That said, to climb the value chain, more investment in basic research, specifically in areas like gene editing, synthetic biology, and novel biologics is needed; current R&D spend stands barely at 0.7% of GDP across all science. Recognising this trend of substantial underfunding, the government has announced a National Research Foundation and a dedicated pharma R&D fund, seeking to stimulate private R&D via tax incentives. With policy focus on improving IPR frameworks, India is streamlining patent examination to encourage medical patents, and regulatory sandboxes for biotech, examples being relaxed norms for pilot clinical studies on new therapies, the environment is ameliorating. All in all, India’s biotech strength is in its combination of scale and frugality, the ability to innovate at lower cost and massproduce, which can be directed to both domestic health challenges and global markets.
Space Technology
India’s space tech story is perhaps the most inspiring example of deep tech success to date. Long dominated by the public sector, ISRO’s legendary space program, the field was opened to private players only a few years ago, and they have hit the ground running. Agnikul Cosmos and Skyroot Aerospace are two startup stars that developed their own small satellite launch vehicles with remarkable speed; Skyroot’s Vikram-S rocket launch in 2022 was the first by a private Indian entity, and Agnikul’s custom Agnibaan rocket is not far behind. These startups benefited from ISRO’s technical mentorship and facilities access, as well as a supportive regulatory shift, the creation of IN-SPACe as a onestop agency for private space permits, and a new Space Policy in 2023 that permits private activity across the board from launch and satellites to ground services. Both, the central and state governments are actively funding spacetech, Tamil Nadu partnered with the central government to set up the iTNT hub in Chennai which supports space startups with funding, incubators, and connects them to academia. As a result, India now has 140+ space startups working on everything from cube satellites and propulsion systems to geospatial analytics. This is backed by India’s legacy strengths, ISRO’s decades of experience mean a readily available talent pool of engineers who’ve built and operated satellites and rockets under resource constraints, an inimitable know-how in cost-effective innovation; India’s Mars orbiter famously cost less than the budget of the Hollywood movie Gravity. Commercial demand is on the rise too, Indian startups like Pixxel, which builds imaging satellites, have secured global customers and funding. The ambition is significant, a report suggests India could capture 10% of the global space economy, projected to be $700 billion, by 2030, if it continues on this trajectory. Strengths in this domain include end-to-end capability such as design, build, launch, and operate satellites all within country, cost competitiveness, and government’s willingness to integrate space startups into national projects. Moving forward, India is forging international collaborations with Australia and Japan on satellite data sharing, and with the US on planetary missions, to bolster this sector. The sky is not the limit here, with the combination of ISRO’s legacy and startup agility, India can become a major global hub for small satellite launches, affordable space services, and even space applications like broadband constellations. Across these domains, India’s deep tech strengths often boil down to talent, cost-effective engineering, and policy support in the form of national missions or incentives. Whether it’s AI or space, having a large pool of well-trained, English-speaking engineers is India’s ace; coupling that with supportive policy as being done via specialised missions and policies, creates a fertile ground. Each domain also reflects India’s desire for strategic autonomy, indigenous AI for language tools, local quantum encryption to secure communications, domestic chips to reduce import dependence, biotech for health security, and private space assets for both commercial and strategic use. The challenge will be to convert these inherent strengths into globally competitive products and companies in the coming decade.
Leveraging International Partnerships
In an era of geopolitical flux, India’s bilateral and multilateral partnerships are proving to be valuable force-multipliers for its deep tech aspirations. By collaborating with key allies and global tech leaders, India can gain access to advanced technologies, capital, and markets, while also contributing its own strengths. Here’s how India can leverage partnerships with the Quad nations, the EU, Israel, and others for mutual benefit in deep tech. Primarily, the Quad (U.S., Japan, Australia, India), a security dialogue, has increasingly pivoted to technology cooperation as a core pillar. In May of 2022, leaders of the Quad announced joint efforts to augment semiconductor supply chains, 5G telecom, quantum technologies, biotechnology, and space. This involves pooling their “complementary strengths” to create more diverse, resilient tech supply lines, effectively using friend-shoring to reduce dependency on single sources (China). For India, Quad cooperation means partnering with the U.S. and Japan, global leaders in semiconductors, to develop local chip manufacturing and design capabilities. Indeed, the Quad setup envisions mapping supply chain vulnerabilities and coordinating investments so that fab capacity, materials, and talent can be shared. In telecom, the Quad nations are collaborating on open 5G/6G standards to ensure democratic values in technology, an effort India is deeply involved in given its own drive for indigenous 5G such as BSNL’s 4G/5G project with local tech. The Quad also launched a Quad Fellowship that brings 100 students from India (and each of the other partners) to the U.S. each year for graduate STEM education, this is already in motion, creating a pipeline of talented researchers with cross-national networks. In space, Quad countries agreed to share more satellite Earth observation data and even set up a joint data portal, which will aid Indian startups in fields like geospatial analytics and climate tech. Furthermore, a Quad Investors Network (QUIN) was set up to facilitate cross-country venture funding for critical tech startups. By leveraging the Quad, India essentially gains a platform to co-develop and co-standardise emerging technologies with three advanced economies, amplifying its own capabilities. The mechanism going forward could include joint R&D projects, an India-Japan-Australia research program on quantum encryption being an example, technology demonstration partnerships like inviting Australian quantum companies to India’s Quantum Mission projects, and coordination in setting global tech norms where India’s voice gets weight through alignment with fellow democracies. India-EU ties in technology have accelerated with the creation of the EU-India TTC in 2023. This high-level forum mirroring the EU-US TTC and focuses on strategic tech collaboration. Key areas identified include semiconductors, AI, clean energy, and digital governance. The EU and India are working on strengthening semiconductor ecosystems, the EU’s Chips Act and India’s Semiconductor Mission share a common goal of supply chain diversification, and cooperation can range from European chipmakers setting up in India to joint training programs for semiconductor engineers. On AI, both partners are committed to ethical AI and data privacy; there’s discussion of linking India’s upcoming AI research institutes with European initiatives like the European AI Excellence centers. One concrete area is standards and certification by aligning standards for emerging tech like autonomous vehicles or biotech, Indian startups can more easily export to Europe and vice versa. The TTC also covers digital public infrastructure, the EU is interested in India’s success with things like Aadhaar digital ID and UPI payments, and there’s scope to co-create solutions for other developing regions. Moreover, Europe’s emphasis on green technologies overlaps with Indian priorities in hydrogen and battery tech; co-development projects or EU investments in Indian climate-tech startups could result. A recent joint statement reaffirmed deepening cooperation in trusted ICT, resilient supply chains, and research exchange. Practically, India can leverage EU partnerships by accessing European R&D funding from Horizon Europe programs that are now open to Indian entities in certain calls, inviting European firms to set up manufacturing of high-tech products in India with incentives from both sides, and conducting joint hackathons or innovation challenges in priority fields (an example being the India-EU AI challenge to solve language translation and pooling expertise from both). Such mechanisms ensure tech transfer is a two-way street, India gets cutting-edge tech and best practices, while Europe gains a trusted partner and a huge market to scale innovations. Israel, often dubbed the “startup nation”, is a natural partner for India in deep tech. The two countries have a long history of cooperation in defense and agriculture tech; this has expanded into innovation and R&D collaborations. A flagship initiative is the India-Israel Industrial R&D and Technological Innovation Fund (I4F), a $40 million joint fund which grants money to partnered companies from both nations to co-develop technologies. Focus areas include water tech, energy, healthcare, agritech, and ICT , all of which overlap with deep tech domains. Through I4F, an Indian and an Israeli company might jointly build a new drone-based precision agriculture system, sharing IP and market access. The fund essentially reduces the risk of R&D by sharing costs and expertise. Beyond I4F, Israel’s venture ecosystem is opening up to Indian startups, Indian deep tech companies are increasingly forging ties with Israeli counterparts to learn from their commercialisation models, Israel excels at converting defense research to civilian startups, something India is keen to emulate. On the governmental side, high-level visits often yield MoUs on technology, a 2023 MoU on industrial R&D covered cooperation in AI, quantum, and sustainable energy. Defense tech is fulcrum of strategic cooperation, joint development of cutting-edge systems like the Barak-8 missile in the past could extend to robotics, AI for defense, or drones. Since Israel is a leader in cybersecurity, Indian startups are also partnering in that arena to improve domestic cyber capabilities. Culturally, Israeli and Indian entrepreneurs share a penchant for frugal innovation under constraints, and exchange programs have been frequent. To leverage this partnership fully, India can learn from Israel’s incubation approach, how its Chief Scientist’s Office ran the Yozma funds and tech incubators in the 1990s, and adapt it locally. We may see more Indo-Israeli accelerators and cross-investments. Moreover, Israel can be a gateway for Indian deep tech into Western markets, given its strong US/EU connections, and conversely India offers Israel scale and talent. The mechanism here is clear, co-development projects, joint funds, and sharing of best practices are the way forward, with the two governments facilitating and private sectors executing. In addition to the above, India is exploring deep tech collaboration in various other forums. With the United States (outside of Quad), the iCET (Initiative on Critical and Emerging Technology) launched in 2023 is a comprehensive bilateral agenda covering semiconductors, defense tech, space, 5G/6G, biotech and more. Through iCET, the US and India are working to remove export control barriers for high-tech trade and increase technology sharing, exemplified by the recent agreement for General Electric to manufacture jet engines in India, a first-of-its-kind tech transfer. Such moves will directly uplift India’s aerospace tech ecosystem. Similarly, India-Japan cooperation has grown, with Japan investing in Indian digital startups and both governments discussing collaboration in AI and robotics, Japan’s aging society innovations could be localized for India. Australia and India, aside from Quad, have a critical minerals partnership for materials needed in semiconductors and batteries, and are cooperating on quantum research via academic exchanges. On the multilateral front, India’s engagement with the G20 and forums like BRICS also touches on tech, India led a Digital Public Infrastructure showcase in G20, positioning itself as a model for other emerging economies; and with BRICS, it’s exploring a shared R&D fund. Even South-South partnerships, such as with African nations, are an opportunity, India can export affordable deep tech solutions like telemedicine setups or fintech platforms in exchange for data access and market expansion, a mutually beneficial arrangement. The benefits of these partnerships are manifold, they can bring in tech transfer, capital investment, market access, and standard-setting influence. A concrete illustration is in semiconductors by aligning with the US, Japan, and EU, India increases the likelihood of securing supply of critical chip IPs and tools that are restricted to allies, while also offering itself as a viable manufacturing location that allies can trust. In AI, working with Europe on governance means India can help shape global AI regulations in line with its values like fairness and inclusion, rather than be a rule-taker. In space, sharing data and even jointly developing small satellites with partners can accelerate innovation while spreading costs. India’s approach, true to its diplomatic style, has been multi-aligned, engaging with Western democracies for advanced tech and investment, with Israel for niche innovation, and still keeping channels open with others, including tech trade with Russia in areas like nuclear energy, or with South Korea for electronics. This hedges against overreliance on any single source and keeps technology access broad-based, quintessential in a fragmented world. Going forward, India can propose specific mechanisms to deepen these partnerships; bilateral startup visas to allow entrepreneurs to spend time in each other’s ecosystems; joint innovation challenges, prize competitions funded by two governments for solving a common problem like climate change using deep tech; and co-investment platforms where sovereign funds from two countries pool money into deep tech funds. By institutionalising such mechanisms, collaborations move beyond MoUs into operational realities that benefit startups on the ground.
From Lab to Market – and Beyond
To truly scale up deep tech innovation, India’s policy framework must address the full lifecycle, from research to commercialisation to global expansion. Based on current gaps, industry feedback, and global best practices, we attempt to provide key policy recommendations targeting R&D commercialisation, intellectual property (IP), regulatory flexibility, and export promotion.
A. Bridge the Lab-to-Market Gap with Translational R&D Support: A recurring challenge is the “valley of death” between academic research and viable product. India should establish translational research centers and innovation labs that specifically help mature technologies from TRL (Technology Readiness Level) 3–4, research prototype, to 7–8, market-ready prototype). The new Anusandhan National Research Foundation can earmark grants for partnerships that pair a research lab with a startup or industry partner on mission-mode projects. Under the program, a university developing a new battery chemistry could get a grant that mandates collaboration with an electric vehicle startup to co-develop a prototype battery pack. The government could expand schemes like PRISM and TDB, which fund product development, with larger outlays for deep tech. Another lever is academic incentives, encouraging professors through promotions and funding to spin off startups or license their patents. Simplifying tech transfer rules, as entailed in NDTSP, will allow IP developed in universities under public grants to be licensed to startups on fair royalty terms, rather than languish. Finally, enabling partial or conditional equity ownership by universities in startups so they benefit from successful commercialisation and motivate institutions to actively support entrepreneur-researchers. The end goal is a seamless continuum from scientific discovery to engineered solution.
B. Strengthen IP Regimes and Incentives Innovation: A robust intellectual property ecosystem is essential for deep tech, where patents and proprietary technology are key assets. India has made progress in reducing patent backlogs, but further reforms are needed. One recommendation is to introduce fast-track examination for deep tech patents, especially in critical fields like semiconductors or biotech, with a targeted 6-9 month window for approval. Coupling this with lower fees or tax credits for startups filing patents can greatly encourage IP creation. Under such reforms, a startup could get a rebate on expenses for international patent filings, PCT applications, easing the burden of protecting their IP globally. Another idea is innovation boxes in taxation, i.e. a lower corporate tax rate for income derived from patents or patented products, which would reward firms that commercialise IP. The government can reinforce IPR enforcement by setting up special commercial courts or fast-track arbitration for disputes in deep tech sectors, giving confidence to investors that IP theft or infringement will be addressed swiftly. Mentorship on IP strategy is also key as many startups underutilise the IP system. Leveraging programs like Startup India, workshops can be run to train founders on patent landscaping, licensing models, and how to avoid common pitfalls. All these measures signal that India values innovation and will protect and reward it, which in turn attracts more R&D investment.
C. Regulatory Sandboxes and Easing Compliance: Given the pace of technological change, regulators need to be ahead of the curve in allowing experimentation. India has had success with fintech sandboxes, RBI’s sandbox allowed new payments solutions to be tested under relaxed norms, This approach should be generalised to deep tech domains. In autonomous vehicles (AVs) vertical, India could designate certain zones or corridors as AV testing grounds where startups can trial self-driving cars or drones with provisional permits. Similarly, for drones and UAVs, the regulator has already begun granting experimental licenses; this needs expansion to autonomous delivery drones, etc. In healthcare, a regulatory sandbox for digital health and biotech could let, say, an AI diagnostic tool be deployed in a pilot hospital with interim approval while data is gathered for full certification. The idea is to learn and iterate policy-by-policy in controlled environments rather than enforce blanket bans or strict rules that stifle innovation. Sandboxes should have clear criteria, time-bound phases, and involve close monitoring, but ultimately they de-risk regulatory uncertainty for startups. Beyond sandboxes, broader ease-of-doing-business reforms are needed, a deep tech hardware startup should not have to wrestle with 10 different bureaucracies to import lab equipment or to get environmental clearance for a pilot plant. A solution is creating a single-window clearance system specifically for R&D facilities as this would coordinate visas for foreign experts, import licenses for equipment, and any local permits required, through one nodal agency, perhaps under DPIIT. India could also update standards and certifications to be in sync with global norms in emerging areas, so that a product developed under Indian standards is automatically acceptable in major markets. Overall, responsive and light-touch regulation will allow deep tech innovation to flourish responsibly.
D. Export Enablement and Global Market Access: Indian deep tech startups often eye global markets from day one, partly due to the limited domestic demand for some cutting-edge products. The government can support their international forays through a mix of diplomacy and export incentives. One idea is to create a Deep Tech Export Promotion Council, analogous to those for traditional industries, that would help identify market opportunities abroad, advise on compliance, modeller around ITAR for defense exports, FDA for medtech, etc., and organise India pavilions at major tech trade shows such as CES and IAC for space. Trade agreements could include chapters on tech cooperation and standards, ensuring Indian products meet partner market requirements. Extending export credit and insurance schemes to startups will reduce the risk of selling overseas, assuming a scenario, wherein, a spacetech startup has a contract to launch satellites for an African country, EXIM Bank could provide insurance or working capital against that export order. The foreign ministry can ramp up Tech Diplomacy via science attachés in key embassies who facilitate partnerships and help Indian startups land pilot projects abroad. There is also room for a program akin to “Soft Landing” networks, India can negotiate reciprocal arrangements where Indian incubators partner with, say, an EU or US incubator, so that when a startup wants to expand to that market, they have office space, mentorship, and regulatory guidance waiting and vice versa for foreign startups in India. By the same token, as global tech trade increasingly faces protectionism, India should proactively align with trusted networks such as the U.S.-led Chip 4 Alliance or others to ensure its companies are on “friendly” supply chain lists and not subject to undue export controls. Being part of frameworks like the Wassenaar Arrangement and other multilateral export control regimes also gives India a voice in shaping the rules that govern high-tech trade. Therefore, the government must act as a facilitator for global expansion, smoothing the path in foreign markets and integrating Indian deep tech into global value chains.
E. Foster Demand and Adoption at Home: While not explicitly asked, a complementary recommendation is to cultivate a domestic market for deep tech. As noted, the lack of an early adopter market in India can be a bottleneck. Policy can help stimulate demand through incentive schemes for local buyers of deep tech solutions. Manufacturing firms that adopt Indian-made robotics or AI could get tax deductions or faster depreciation benefits. In healthcare, if hospitals deploy an indigenous medical device or diagnostic AI, perhaps they get part of the cost reimbursed through a government innovation fund. The rationale is to reduce the risk for first customers trying a new technology. Additionally, the government can use its convening power to run grand challenges for public problems like a challenge to use AI for crop disease detection, winner gets a government contract, this creates a pull for innovation directed at India’s needs. By ensuring there is a home market, even if small initially, startups can prove their product at home before scaling abroad, which also helps keep core IP and talent anchored in India.
These policy measures, if executed well, create a nurturing environment for deep tech startups to emerge from research, protect their innovations, test them in the real world, and then take them global. They also align with what industry leaders have requested, simplifying IP and giving tax breaks for innovation-driven firms, and making government a launch customer for new tech among other reforms. Policymakers should approach deep tech as a long-term strategic investment, a facilitative policy today could pay back multifold in the form of world-beating companies, higher-value exports, and technological self-reliance tomorrow.
Short, Medium, and Long-Term Interventions
Transforming India’s deep tech landscape is a marathon, not a sprint. It requires a phased approach with clear milestones in the short, medium, and long term. The immediate priority over the next two to three years is to lay a robust institutional and financial foundation for India’s deep tech ecosystem. This year itself, the government must finalise and implement the National Deep Tech Startup Policy, which will institutionalise critical funding programs such as the Fund-of-Funds (FoF) and targeted grants, while also streamlining regulatory frameworks. Central to this is operationalising the Deep Tech Fund-of-Funds, with an initial disbursement of ₹2,000 crore through SIDBI, directed towards at least 100–200 early-stage startups working in strategic domains like artificial intelligence and quantum technologies. Equally important is seeding R&D through a structured rollout of the proposed Proof-of-Concept and prototype grant schemes, aimed at funding 50–100 high-potential research projects across leading academic institutions and incubators. The National Research Foundation should be fully operationalised during this period with a clear mandate to foster flagship programs linking academia with industry on frontier technologies. Simultaneously, the regulatory landscape must evolve to foster innovation, regulatory sandboxes should be launched in key areas such as autonomous drones, blockchain-based applications, and telemedicine solutions. A fast-track patent mechanism, coupled with patent fee waivers, must be introduced to incentivise startups to file and protect their intellectual property. On the international front, India should initiate at least five joint R&D collaborations under major frameworks such as iCET with the United States, I4F (with Israel), and the India-EU Trade and Technology Council. Projects like a U.S.- India semiconductor center of excellence and an Indo-Israeli AI research collaboration must be prioritised and fasttracked. These efforts should be complemented by the establishment of soft-landing programs, supported through bilateral MoUs with leading incubators across the U.S., EU, Israel, and Japan, enabling Indian startups to scale internationally with structural backing. Domestically, stimulating market demand is essential. A Startup Procurement Fast-Track should be created within the government to assist deep tech ventures in navigating public procurement processes. This could include a quota mechanism where a fixed percentage (say 5%) of project budgets is reserved for innovative startup solutions. This can be supplemented by an annual Deep Tech Showcase that must be institutionalised to expose government departments and large corporations to emerging technologies through demonstrations, thereby catalysing early adoption and commercial pilots. Finally, a strong pipeline of skilled talent must be nurtured. This involves expanding fellowship and internship programs such as the Prime Minister’s Research Fellowships, aiming to train at least 1,000 specialists in quantum technologies and over 10,000 AI professionals. The government must accelerate the launch of National Centres of Excellence for Skilling in partnership with industry, designed to offer hands-on, sector-specific training. By 2027, these coordinated efforts should result in an ecosystem where enabling policy is active, early-stage capital is flowing, and globally recognised pilot projects, such as a domestic quantum communication testbed or AI-driven health diagnostics, begin demonstrating India’s emerging capabilities in deep tech. In the medium term, India must transition from foundational development to scaling up the deep tech ecosystem. By the early 2030s, the Deep Tech Fund-of-Funds should be scaled towards its intended ₹10,000 crore corpus, while new sector-specific investment vehicles, such as funds focused on space technology, clean energy, or climate tech, should be established. As investor confidence in deep tech grows, private venture capital participation is expected to deepen, with generalist funds potentially allocating 20% or more of their corpus to these high-impact sectors. With this momentum, India should target a compound annual growth rate of over 40% in deep tech investments, aiming to surpass $5–6 billion annually by 2030. Indian institutional investors, including pension and insurance funds, must be encouraged to enter the venture capital landscape to diversify and deepen the capital base. By this phase, India’s deep tech ecosystem should witness the emergence of multiple unicorns and successful public listings, validating long-term business models. According to estimates by Inc42, the sector could contribute up to $350 billion to national GDP by 2030, provided the right structural support is in place. This includes expanding accelerator programs and mentorship platforms focused on hardware, bolstering the presence of corporate innovation labs, and fostering a community of serial deep tech entrepreneurs. The government can amplify this momentum by establishing dedicated Deep Tech Zones or Cities, experimental hubs equipped with advanced labs, co-working spaces, test facilities, and streamlined regulatory processes, effectively functioning as tech-special economic zones. This period must also see the realisation of major infrastructure investments. The first generation of domestic semiconductor fabrication plants, producing chips in the 28nm to 40nm range, and display fabs should become operational, fulfilling the vision of the India Semiconductor Mission. Parallelly, a vibrant fabless design ecosystem should materialise, with numerous startups launching commercial chipsets backed by government design-linked incentives. In space technology, private companies must progress to routine satellite launches and international contracts, making India a top-three player in the global small satellite launch market. In the quantum domain, India should aim to build and demonstrate quantum computers with 50–100 qubit capabilities, while applying quantum encryption solutions for secure strategic communications. These are ambitious, but plausible targets if early investments mature as expected. As technologies evolve, policy and regulatory frameworks must also keep pace. Domains like AI ethics, genomic data protection, and autonomous mobility will need comprehensive, India-centric legal structures by 2030. The regulatory sandboxes set up during the 2020s should transition into permanent laws informed by their learnings. To keep regulation responsive, annual deep tech policy forums involving government, academia, and industry stakeholders should institutionalise feedback loops and policy iteration. Internationally, India must shift from being primarily a technology recipient to a norm-setter and exporter. Hence by 2030, it can lead initiatives such as a global coalition on AI for low-resource languages, drawing on its experience with IndiaAI. It could also champion a Quad-led space collaboration providing satellite data and climate monitoring for Indo-Pacific nations. India’s affordable innovations, such as drone-based agri-solutions or telemedicine kits, should be embedded into its development partnerships across Africa, Latin America, and Southeast Asia, generating both goodwill and new markets. By the end of this phase, India should aspire to clear, measurable benchmarks, over 10,000 deep tech startups, at least 100 companies crossing $50 million in annual revenue, 50 or more international patents annually by Indian founders, R&D investment nearing 2% of GDP, and an increase in high-tech exports to at least 20% of total exports. These indicators would signify a maturing and internationally competitive deep tech ecosystem. Looking beyond 2035, the long-term objective for India is to attain technological sovereignty in strategic domains and establish itself as a global leader in deep tech innovation. By the mid-2030s and beyond, India must possess indigenous capabilities across entire supply chains in select critical technologies, whether in designing and producing advanced semiconductors, even if not the most cutting-edge nodes, or manufacturing quantum encryption systems at scale. This ambition aligns with the broader vision of Atmanirbhar Bharat 2047, where India celebrates its centenary as an independent nation with full-spectrum technological self-reliance that insulates it from foreign embargoes or supply chain vulnerabilities. Achieving this will demand sustained capital deployment, institutional capacity, and a multigenerational talent pipeline. By this horizon, deep tech must be a core pillar of India’s economy, contributing both significantly to GDP and to the creation of high-skilled employment. The $350 billion contribution projected by 2030 could expand further by 2035, and a cohort of Indian deep tech multinationals, the country’s equivalents of Google in AI or SpaceX in aerospace, should emerge, headquartered domestically but operating at global scale. These firms, grown out of today’s startups, would solidify India’s place as a first-tier technological power. Moreover, India should become a hub of global innovation, a geography synonymous with cutting-edge breakthroughs in areas such as sustainable energy, affordable medical technology, AI for developmental use-cases, and frontier space exploration. These efforts, by 2040, would yield global investors and research organisations routinely looking towards India not merely as a market or manufacturing base, but as a source of invention. High-tech exports, from AI-driven medical devices and biotech products to satellite systems and advanced materials, should dominate the export basket, replacing traditional dependencies on hydrocarbons and low-end manufacturing. This long-term capability must also translate into geopolitical resilience. In a fragmented world, India’s deep tech edge will give it the ability to withstand supply shocks, technology embargoes, and geopolitical coercion. With proven inhouse capacity to produce critical components, such as semiconductor nodes or launch systems, India will gain greater leverage in international negotiations and greater independence in strategic decision-making. The ability to offer sovereign technology to allies will further enhance its diplomatic capital. Culturally and institutionally, India should aim to cultivate a self-sustaining innovation ecosystem. The national psyche should reflect an enduring commitment to continuous scientific and technological exploration, by 2040, with researchers and startups organically transitioning from one wave of technology like AI or quantum to the next, potentially neurotech, fusion energy, or space-based infrastructure. Government policies must remain agile and forwardlooking, preparing for the regulatory and ethical challenges of future fields like AI super-intelligence, geoengineering, or synthetic biology. The ambition must be not only to keep pace with innovation globally but to lead the conversation on how such technologies should be developed, deployed, and governed. Ultimately, India’s long-term success in deep tech will be measured by its ability to adapt, lead, and shape the technologies of the future, securing not only economic advancement but also strategic independence and global stature. The foundations laid today, through deliberate policy, inclusive innovation, and visionary partnerships, will determine whether India realises its potential as the innovation frontier of the 21st century. This phased roadmap is of course subject to real-world variability, but having time-bound goals helps measure progress and adjust strategy. It’s worth noting that some early signs of success are already visible, the deep tech sector is maturing with larger funding rounds and even IPOs, recent public listings like MTAR Technologies show investor appetite for deep tech. As we progress through these phases, the hope is that deep tech startups will transition “from labto-market at unprecedented scale” , fundamentally transforming India’s economic and technological landscape.
Navigating Geopolitics and Strategic Autonomy in a Fragmented World
The final piece of the puzzle is understanding how global geopolitical currents and India’s domestic imperatives interact in shaping the deep tech ecosystem. We live in an era of techno-nationalism, where nations vie for supremacy in critical technologies amid increasing geopolitical fragmentation. For India, this presents both challenges and opportunities, influencing funding flows, technology access, and the quest for strategic autonomy. With U.S.-China tensions and a broader East-West tech rift, multinational companies and investors are diversifying their supply chains and investment destinations. India has emerged as a prime candidate for “friend-shoring,” evidenced by moves like Apple significantly expanding iPhone production in India and global chip firms considering India for packaging and assembly plants. In terms of startups, Western venture capital that might have gone to China a decade ago is now cautiously looking at India and Southeast Asia as the next frontier. Undoubtedly, many U.S. and Japanese VC funds have raised dedicated India vehicles in recent years. This means India could see increased foreign funding flows into deep tech as global investors seek non-China options for growth . However, it also means competition, other countries, particularly Vietnam and Indonesia are vying for similar attention. India must capitalise by exhibiting a stable policy environment and large talent pool, which it has done to some extent. On the flip side, India’s own strategic stance, restricting Chinese apps and investment since 2020 for security reasons, has cut off one source of capital that previously fuelled some Indian startups. Chinese VC investment in India dropped from billions to nearly zero after those curbs. While this was a conscious choice aligned with national security, it underlines that geopolitics can swiftly redirect funding flows. Going forward, India will lean on partners like the U.S., EU, Japan, and the Middle East to fill the gap. Already, sovereign funds from Gulf countries such as the UAE and Saudi Arabia have become active investors in Indian tech. Maintaining a neutral but friendly posture to multiple blocs allows India to welcome diverse capital, a strategy that has served it well so far. The fragmentation might also prompt India to build domestic funding capacity, encouraging Indian banks, pensions, and even retail investors (via SME exchanges, etc.) to invest in tech innovation, thereby insulating from external shocks. Hence, while global capital seeks new homes amidst great-power rivalries, India must position itself as an attractive yet secure haven, balancing openness with due caution. One harsh reality of a fragmented global order is the use of export controls and tech embargoes as geopolitical tools. We witness the U.S. restricting advanced semiconductors to China, or in international regimes that limit spread of missile tech, etc. For India, which is not yet at the frontier of many technologies, being on the right side of these controls is crucial to access high-end tech. In the past, India faced embargoes, post-1998 nuclear tests, that hampered even its supercomputing development. Today, the situation is improved, India’s closer ties with Western nations mean it’s more likely to be treated as a partner in tech, as evinced by the U.S.-India iCET where both sides are working to break down export control barriers between them. A tangible example is the agreement to share cutting-edge defense tech such as jet engines and drones with India, something seemingly inconceivable two decades ago. Similarly, being part of arrangements like the Australia-group or Wassenaar means India has greater access to dual-use technologies than nonmember states. However, India’s stance of strategic autonomy means it’s not a formal ally, which can sometimes lead to hesitation on the part of partners sharing their crown jewels. To navigate this, India uses diplomacy and confidencebuilding, multi-decade defense cooperation with Russia balanced with new defense ties with the U.S., extensive participation in international scientific projects such as CERN and ITER to gain know-how, and showcasing itself as a responsible tech player with strong non-proliferation record, and an advocate for ethical AI. The net effect is that India’s access to tech will depend on its ability to maintain strategic partnerships without over-committing, a delicate balance. If it can continue convincing partners that helping India advance technologically is in their interest, specifically to present a democratic counterweight in Asia, then flows of technology, through co-development, licensing, or trade, will remain open. Domestically, India is also hedging, investing in its own R&D for critical areas where it doesn’t want to be held hostage. The push in semiconductors and networking as evinced from efforts at developing Indian 5G/6G standards is partly to avoid being overly dependent on foreign tech that could be cut off in a crisis. Indigenous development is essentially an insurance policy against a balkanised tech world. India’s grand strategy has long been anchored around strategic autonomy, making independent decisions in line with its national interests, rather than being locked into any one camp. In the deep tech context, this means India is unlikely to join exclusive blocs that limit its options. While India is in the Quad, it also keeps dialogue open with BRICS on technology. This multi-alignment can yield dividends, India could act as a bridge between different tech ecosystems. An illustration is telecommunications, India works with Western companies on Open RAN 5G, but it also leveraged its partnership with Russia to get access to GLONASS, a GPS alternative, for strategic uses. The domestic need to build self-reliance in tech is also partly to enable independent foreign policy. If India can produce, say, advanced encryption systems, it can securely communicate without fearing that a supplier might eavesdrop or cut off service. Similarly, being able to manufacture defence tech means it doesn’t depend on foreign spare parts during conflict. Strategic autonomy in tech thus buttresses national security. The challenge is that full autonomy is unrealistic in a globalised R&D world, collaboration is necessary. So India’s approach is to meticulously choose areas to be autonomous like nuclear technology and space launchers, where it’s largely self-sufficient, and where to integrate with global networks (as in semiconductors and AI, where catch-up is faster via partnerships). Global fragmentation puts pressure on countries to pick sides in standards. So far, India has tilted towards the democratic tech sphere, aligning with those standards, which does boost interoperability with partners. This seems to be a conscious decision to ensure India’s tech is “trusted” and hence welcome in major economies. It also dovetails with values, India shares with the West concerns on data privacy, AI ethics, etc., and can influence global debates by contributing an Indian perspective such as advocating for AI that addresses developing world issues, not just Western markets. Amid global manoeuvring, India’s domestic needs, development, jobs, inclusion, remain paramount. Technology is seen as a means to solve Indian lingering problems such as clean water, healthcare access and farmer income, as much as a means to project power. Therefore, even as India collaborates globally, it will channel tech into grassroots applications at home. Drones developed with Israeli help are being used for land surveys in Indian villages under the SVAMITVA scheme to digitise land records. Similarly, AI developed in partnership might be used for Indian languages translation to bridge digital divides. This focus on domestic development ensures political support for deep tech initiatives as they are not just elite science projects, but things that can improve daily life for millions. It also means India might prioritise tech that aligns with its vast development market, for cheaper healthcare devices inter alia, even if not at the absolute cutting edge, because it immediately serves a need. This pragmatism will shape the ecosystem to be one that values affordability and scale, which incidentally is also exportable to other emerging economies. Thus, global fragmentation aside, India will invest in tech that secures its basic needs of food, energy and health supplemented by biotech for better crop yields, renewable energy tech for energy security, etc., sometimes in collaboration with say Israel, on drip irrigation tech, or with another international partner. In a fragmented world, supply chains can break, alliances can shift. India’s strategy appears to be building resilience through diversification. In electronics, the Indian government launched the Production Linked Incentive (PLI) schemes to ensure some manufacturing moves to India, reducing over-reliance on China. In critical minerals such as lithium and rare earths, the nation is striking deals with Australia, Argentina, etc., to secure supplies for batteries and electronics. In high-tech talent, India’s diaspora in Silicon Valley and elsewhere is a strength, it acts as informal ambassadors and a reservoir of expertise that India can tap as many have returned to launch startups or guide policy. By keeping connections with all major tech centers, India insures itself against any one pipeline shutting off. Forbye, India is supporting open-source movements like open-source software, Open RAN, and RISC-V chips, which are inherently more global and less controllable by any single power. This aligns with strategic autonomy; if the tech specs are open, India can implement or modify them freely. Geopolitical fragmentation poses challenges of access and alignment, but India is actively managing these by aligning with friendly nations, investing in self-reliance, and focusing on its unique needs. The deep tech ecosystem stands to benefit if India can successfully walk this tightrope, drawing in technologies and capital from around the world without becoming dependent. As a Carnegie Endowment assessment noted, the U.S.-India tech partnership under iCET is geared toward “coproducing and co-innovating technologies to build geo-economic resilience”. This succinctly captures India’s approach, which is to collaborate where it strengthens mutual resilience, and build independent capabilities where needed. If done right, India can emerge in the coming decades as a tech power that is trusted by partners, feared by adversaries, and ultimately self-reliant in the critical innovations that drive its economy and security.
Conclusion
India’s journey to foster a thriving deep tech startup ecosystem is complex but increasingly within grasp. The country has the raw ingredients, a vast reservoir of STEM talent, a cohort of daring entrepreneurs, and a government willing to deploy visionary policies and funds. The coming years will test India’s ability to coordinate these elements, to move from isolated success stories to a self-sustaining, large-scale ecosystem that regularly produces world-class innovations. The evaluation above highlights that money, while crucial, is not the only answer, it’s the structure of funding, which is anchored around patient deployment of strategic capital, and the alignment of stakeholders that will determine success. An early-stage quantum computing startup in Bengaluru might need a grant from an academic incubator, a follow-on investment from a public-private fund, mentorship from a global tech firm, and a pilot contract from the government, a chain of support that converts potential into product. By putting in place the mechanisms for each link in that chain, India can dramatically raise the odds of “the next big thing” emerging on its soil. There are headwinds, certainly. The global economic climate can turn, geopolitical sands can shift, and technology itself can be unpredictable, today’s AI boom could will almost certainly be tomorrow’s quantum rush. But India has shown time and again, from its IT outsourcing boom to the frugal engineering feats of ISRO, that it can harness adversity and startle the world with its dazzling successes; only this time the efforts must be well resourced. By following a phased roadmap, staying agile in policy, and remaining open to global collaboration, India can ensure that deep tech is not just a buzzword but a cornerstone of its future economy. For investors, this unequivocally means unprecedented opportunities across new sectors; for policymakers, a chance to sculpt an inclusive innovation-led growth model; for startup founders, the prospect of solving hard problems with impact on a billion-plus lives; and for foreign partners, a new innovation engine to engage with. The takeaway is unambiguous, India is gearing up for a deep tech revolution, and those who recognise the inflection point stand to gain immensely. The next decade could very well metamorphose India from the back-office of the world to the frontier laboratory of the world, where cutting-edge technology is invented, refined at scale, and exported to the rest of the planet. The mission now is to turn that potential into reality, through smart investment and steadfast commitment to the deep tech cause.