Can India own deep tech future?

In May 2025, Commerce and Industry Minister Piyush Goyal called out Indian startups for playing it safe, chasing easy wins in consumer tech instead of diving into the tougher, game-changing world of deep tech. Sure, India’s deep tech scene is growing fast, with over 3,600 startups already and a target of hitting 10,000 by 2030. It’s the third-largest startup ecosystem in the world, but when it comes to deep tech, we’re still only sixth. And despite all the buzz, the sector’s got its fair share of roadblocks like long development timelines, scattered R&D efforts, lack of patient capital and infrastructure and not enough skilled talent in the pipeline.

India’s deep tech ecosystem spans several high-impact sectors, often driven by breakthroughs in science and engineering. The main deep tech sectors currently gaining traction in India include AI, ML, biotech and healthtech, semiconductors and electronics, spacetech and cybersecurity. “Unlike the US or Europe, India’s ecosystem lacks enough venture funds dedicated to decade‑long bets, plus there’s a shortage of world‑class testbeds and research labs. Also, building specialised teams in fields like semiconductor design or advanced robotics means upskilling beyond generic STEM talent. Without robust, enterprise‑aligned training pathways, startups struggle to staff critical roles,” said Ravi Kaklasaria, Co-Founder & CEO at edForce.

According to Yuvraj Bhardwaj, CEO and Co-Founder, Petonic AI, India’s deep tech ecosystem holds immense promise, but it faces significant structural challenges like long gestation cycles and capital intensity. “Unlike consumer tech, which can demonstrate traction within months, deep tech innovations in areas like semiconductors, robotics, quantum computing, or biotech often require years of fundamental research, prototyping, and regulatory validation before commercialisation. Moreover, R&D infrastructure is still catching up, we have world-class scientific minds, but insufficient institutional frameworks for applied research and technology transfer,” he said. However, Bhardwaj believes the tide is slowly turning. “Government initiatives like the National Deep Tech Startup Policy (NDTS) and growing interest from sovereign funds and strategic investors show that the ecosystem is maturing but it needs sustained, collaborative efforts across academia, industry, and government,” he added.

In 2024, India saw its deep tech startup count cross 3,600, with investments jumping 78% from the year before, thanks to a mix of government support, big strides in generative AI, and some bold innovations from new-age startups, according to a report by Nasscom and Zinnov. The report highlights that the top 10 deep tech funding rounds alone pulled in around $600 million out of a total $1.6 billion raised that year. Interestingly, nearly all of these top-funded startups were AI-driven software platforms tackling a wide range of real-world problems.

Siddhartha C, Founder and CEO, ShepHertz, informed how AI is impacting almost everyone. “With the rebirth of AI through ChatGPT and similar tools, it is helping nearly anyone with a smartphone. In my view, the biggest impact has been on developers. With the help of GitHub Copilot and Cursor, productivity has increased multi-fold,” he said. Kaklasaria admitted that AI is turbo‑charging the innovation engine in deep tech by accelerating simulations and prototyping, automating mundane code and data tasks and enabling predictive R&D.

Among all challenges, IIT Madras made history when the institute incubated more than 100 deep tech startups in a single financial year. Over the last 12 years, IITM Incubation Cell has supported 457 deep tech startups, collectively valued at over Rs 50,000 crores (based on investments raised from VCs), with two unicorns and one company on the verge of an IPO. These startups, founded by IIT Madras faculty, staff, students and alumni as well as external entrepreneurs, span a wide range of emerging sectors, from manufacturing & robotics to spacetech, aero/defence, AI, biotech & IOT. “This year, we have filed 417 patents during the 2024-25 financial year. These are deep core-tech startups in sectors such as manufacturing, robotics, automotive materials, battery, construction, defence, ship building, aerospace, UAVs and health tech, besides space technologies, pharma and quantum, among others,” said Prof V Kamakoti, Director, IIT Madras, in April 2025.

India’s deep tech ambitions just got a big boost with the Union Cabinet approving a Rs 1 lakh crore RDI scheme on July 1, 2025. The plan aims to encourage more private sector involvement in cutting-edge areas like AI, quantum tech, semiconductors, defence and space by offering long-term, low or zero-interest funding. Chaired by PM Narendra Modi, the move is meant to fix the funding gap in these critical “sunrise” sectors. The Department of Science and Technology (DST) will lead the rollout. The goal? To help India become self-reliant in tech and globally competitive by 2047.

Siddhartha believes in deep tech, it’s not just about the product. According to him, investors assess the full ecosystem such as timing, infrastructure and regulations before backing a startup. “I also believe that defensibility is essential. Investors look for deep IP moats like patents, proprietary data, or engineering capabilities that aren’t easy to copy. It’s not just about whether the tech works, but whether it can stay ahead over time, let’s say for the next 10 to 15 years. It should not be just another feature addition. Also, team structure is often the make-or-break factor. A majority of startups fail due to cash flow issues. Being fiscally disciplined and having a strong execution team with quality controls and governance plays a big role,” he said.