India tightens deep tech funding rules to push frontier innovation
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India has redrawn the rules managing government support for deep tech startups, introducing stricter eligibility criteria and vetting requirements to channel funding toward next-generation technologies.
The Ministry of Commerce and Industry last week redefined what qualifies as a deep tech startup and extended eligibility for recognition to companies up to 20 years old.
Firms operating in areas such as artificial intelligence, biotechnology, quantum computing, and advanced materials will now qualify, provided their annual revenue does not exceed 3 billion rupees, or about $33.1 million.
Digital platforms and consumer-facing applications, which have dominated India’s startup ecosystem and attracted a large share of public funding in recent years, have been excluded.
The move is aimed at encouraging frontier innovation by offering recognised startups access to tax incentives, government funding, and intellectual property support. It also comes ahead of the largest artificial intelligence gathering ever hosted in New Delhi next week, which is expected to draw global technology leaders, including OpenAI chief Sam Altman, Alphabet chief executive Sundar Pichai, Nvidia head Jensen Huang, and Anthropic chief Dario Amodei.
Under the revised framework, startups seeking government support will face rigorous scrutiny. Applicants must submit incorporation documents and detailed information on their innovation areas, while also demonstrating meaningful investment in research and development, creation of intellectual property, and clear plans to scale up and commercialise their products.
Each application will be reviewed by an inter-ministerial certification board comprising representatives from multiple central government departments, including the Department of Science and Technology and the Department for Promotion of Industry and Internal Trade.
The policy shift aligns India with global efforts to nurture deep tech.
Countries such as Singapore and members of the European Union have launched targeted grant programmes for high-risk innovation, while US agencies like the Defense Advanced Research Projects Agency have long backed advanced technology research. India’s new approach signals a push to move beyond consumer internet businesses and build a stronger base of globally competitive deep tech companies.