Key Highlights:

• India doubles the eligibility period for deep tech startups from 10 to 20 years.
• Revenue threshold for startup benefits rises to ₹3 billion.
• ₹1 trillion RDI Fund aims to boost long-term innovation financing.
• Funding momentum for deep tech startups shows signs of recovery.

India has revised its startups framework, extending the eligibility period for deep tech firms to 20 years and raising the revenue cap for benefits to ₹3 billion. The policy matters because deep tech ventures in semiconductors, biotech, and space often require longer development cycles before commercial success.

The change aligns regulatory timelines with the realities of research-driven businesses. It also signals a stronger government push to build long-horizon innovation capacity in India.

What Exactly Has Changed in the Policy?

Under the updated framework, deep tech firms can retain startup status for twice as long as before. This allows companies to continue receiving tax benefits, grants, and regulatory support while still developing early-stage technologies.

Additionally, the revenue ceiling for startup-specific incentives has increased from ₹1 billion to ₹3 billion. This shift enables scaling companies to remain eligible for support during growth phases.

Investors say the reform reduces what many founders previously described as a “graduation cliff,” where companies lost benefits before achieving market readiness.

How Will Funding Improve for Deep Tech Startups?

The policy change works alongside India’s ₹1 trillion Research, Development and Innovation (RDI) Fund. The fund aims to expand patient capital for science-led ventures and improve funding availability across early and growth stages.

Private investors are also increasing participation. A $1-billion-plus India Deep Tech Alliance, supported by global venture firms, has formed to boost capital access. Together, public and private initiatives are expected to address long-standing funding gaps, especially beyond Series A rounds.

Recent data already shows improving momentum. Indian deep tech startups raised $1.65 billion in 2025, up from about $1.1 billion annually in the previous two years.

Can India Compete Globally in Deep Tech?

Despite progress, India remains a smaller deep tech funding market compared with the United States and China. However, policymakers and investors view the updated framework as a long-term signal that India is building patient regulatory and financial systems for frontier innovation.

Over time, sustained funding, regulatory stability, and stronger domestic listing opportunities could encourage more founders to build and scale locally.

The Long-Term Signal for Startups

The revised policy indicates India’s intent to support long-horizon research ventures and reduce regulatory friction. If funding pipelines expand as planned, the updated framework could help more startups survive the lengthy path from laboratory innovation to commercial products.