India just rewrote the rulebook for deep tech startups. The government doubled the period companies can claim startup status to 20 years and tripled the revenue threshold to $33 million, recognizing that space, semiconductor, and biotech ventures need more runway than traditional software startups. The move comes as India deploys an $11 billion public fund to close a chronic gap in follow-on capital that's forced founders to relocate overseas.
India's deep tech ecosystem just got a longer leash. The government this week updated its startup framework to double the recognition period for deep tech companies to 20 years, while raising the revenue threshold for tax breaks and grants to ₹3 billion (roughly $33.12 million) from ₹1 billion previously. The changes, announced through official government channels, acknowledge what investors have been saying for years - science-led companies building semiconductors, space tech, and biotech don't mature on software timelines.
The shift tackles what Vishesh Rajaram, founding partner at Speciale Invest, calls an "artificial pressure point." Under the old rules, deep tech companies often lost startup benefits while still pre-commercial, creating what he describes as a "false failure signal" that judged them on policy deadlines rather than technological progress. "By formally recognizing deep tech as different, the policy reduces friction in fundraising, follow-on capital, and engagement with the state," Rajaram told TechCrunch.
But regulatory recognition alone won't fix India's capital problem. The country's deep tech startups raised $1.65 billion in 2025 - a sharp rebound from $1.1 billion in each of the prior two years, but still a fraction of the $147 billion deployed in the U.S. during the same period, per Tracxn data. China accounted for roughly $81 billion, highlighting the scale gap India faces despite its engineering talent base.
That's where New Delhi's ₹1 trillion (around $11 billion) Research, Development and Innovation Fund comes in. Announced last year, the RDI Fund is structured to route public capital through venture funds with timelines that mirror private capital, addressing what investors describe as chronic gaps in Series A and beyond. "The real benefit of the RDI framework is to increase the funding available to deep tech companies at early and growth stages," Arun Kumar, managing partner at Celesta Capital, told .
