India Deep Tech Policy Revised: Extended Benefits for Startups

India recently revised its startup rules specifically for the deep tech sector. Key changes include doubling the benefit period and raising the revenue threshold. These adjustments aim to support the India deep tech policy and its long development cycles.

What Happened

The Indian government updated its startup framework, extending the period for deep tech companies. They will now be treated as startups for 20 years. The revenue threshold for specific benefits has increased to ₹3 billion (about $33.12 million). This is up from the previous ₹1 billion (around $11.04 million). These changes align policy timelines with the lengthy development cycles of science and engineering-led businesses.

Details From Sources

New Delhi is building a long-horizon deep tech ecosystem, combining regulatory reform with public capital. The ₹1 trillion (around $11 billion) Research, Development and Innovation (RDI) Fund was announced last year. Its purpose is to expand patient financing for science-led and R&D-driven companies. More information is available at rdifund.anrf.gov.in.

The India Deep Tech Alliance also formed as a $1 billion-plus private investor coalition. This alliance includes firms like Accel, Blume Ventures, Celesta Capital, Premji Invest, Ideaspring Capital, Qualcomm Ventures, and Kalaari Capital. Nvidia serves as an adviser to this initiative, according to TechCrunch. Vishesh Rajaram, founding partner at Speciale Invest, noted the previous framework created “artificial pressure points.” He also described it as a “false failure signal,” adding the new policy reduces friction in fundraising.

Siddarth Pai, founding partner at 3one4 Capital, observed that the policy avoids a “graduation cliff.” Pai also mentioned the RDI fund is taking shape, with fund managers identified. The selection process for venture and private equity managers is currently underway. He views the RDI Fund as a nucleus for greater capital formation. It will take direct positions and provide credit and grants to deep tech startups.

Arun Kumar, managing partner at Celesta Capital, stated the RDI framework aims to increase funding. This funding supports deep tech companies at early and growth stages. It also addresses chronic gaps in follow-on funding. Pratik Agarwal, a partner at Accel, said regulatory recognition provides investors greater confidence. This shows the policy environment will not change mid-journey. He believes India is learning from the U.S. and Europe in this regard.

Why This Matters

Deep tech startups in sectors like space, semiconductors, and biotech require longer maturation periods. These policy changes address previous artificial pressure points, as noted by Vishesh Rajaram. Companies risked losing startup status while still pre-commercial. Formally recognizing deep tech as different reduces friction in fundraising and state engagement. This extended runway strengthens the case for building and staying within the Deep tech ecosystem India, according to Pratik Agarwal. This tech policy reform is significant.

Background Context

Indian deep tech companies historically faced challenges, including the risk of losing startup status. Long development cycles often contributed to this issue. Investors previously cited access to capital, particularly beyond early stages, as a binding constraint. This was especially true for capital-intensive deep tech companies. Revised Indian startup regulations aim to mitigate these concerns.

Industry Reactions

Venture capital partners have largely welcomed the policy changes. Vishesh Rajaram of Speciale Invest believes the policy reduces friction in various processes. Siddarth Pai from 3one4 Capital sees the framework as preventing a “graduation cliff.” Arun Kumar of Celesta Capital emphasized the India RDI fund\s role in increasing funding depth. Pratik Agarwal with Accel views the framework change as a signal of longer-term policy intent. This increases investor comfort and confidence.

Related Data or Statistics

Indian deep tech startups have collectively raised $8.54 billion to date. In 2025, funding reached $1.65 billion. This marks a rebound from $1.1 billion in each of the two preceding years. Funding peaked at $2 billion in 2022, according to Tracxn. In comparison, U.S. deep tech startups raised about $147 billion in 2025. China accounted for roughly $81 billion in 2025, also per Tracxn. Neha Singh, co-founder of Tracxn, noted this pickup suggests a gradual move. It indicates a shift toward longer-horizon investing, especially in advanced manufacturing, defence, climate technologies, and semiconductors.

Future Implications (CLEARLY LABEL AS SPECULATIVE)

These policy moves may lead to increased investor participation over the medium term. It remains an open question whether these changes will reduce the tendency of Indian startups to shift headquarters overseas. Pratik Agarwal suggests India\’s public markets show a growing appetite. This includes venture-backed tech companies, making domestic listings more credible. Arun Kumar sets a benchmark: seeing ten globally competitive deep tech companies from India achieve sustained success over the next decade.

Conclusion

India\’s revised deep tech policy is significant. It fosters a more supportive environment for science- and engineering-led startups. Extended benefits, coupled with initiatives like the RDI Fund, strengthen the Deep tech ecosystem India. Private alliances further support this goal. These comprehensive efforts aim to nurture long-term growth.

Call-to-Action

Readers can explore the official government press release for full details on the policy changes.

FAQ Section

Q1: What are the key changes in India\’s revised startup rules for deep tech?

India doubled the benefit period for deep tech startups to 20 years. The revenue threshold for benefits also increased to ₹3 billion (about $33.12 million).

Q2: What is the purpose of the ₹1 trillion Research, Development and Innovation (RDI) Fund?

The RDI Fund aims to expand patient financing for science-led and R&D-driven deep tech companies. It provides credit and grants.

Q3: How does the India Deep Tech Alliance contribute to the deep tech ecosystem?

The India Deep Tech Alliance is a private investor coalition exceeding $1 billion. It provides capital and advisory support to deep tech startups.

Q4: Why did the Indian government introduce these specific policy changes for deep tech?

These changes address the long development cycles of deep tech businesses. They aim to reduce fundraising friction and provide sustained support.

Q5: How does India\’s deep tech funding compare to that of the U.S. and China?

Indian deep tech startups have raised $8.54 billion total, with $1.65 billion in 2025. U.S. deep tech raised $147 billion in 2025, and China $81 billion.