SUMMARY
The policy paper is currently in the final stages of inter-ministerial discussions
After its introduction, the government looks to move towards creating a dedicated fund of funds
The development comes at a time when the Centre is focusing on developing segments such as artificial intelligence (AI), semiconductor manufacturing, spacetech and other allied sectors
The central government is in the final stages of building a dedicated policy to promote deeptech startups, said Rajesh Kumar Singh, secretary of the Department for Promotion of Industry and Internal Trade (DPIIT).
He was speaking at the inaugural session of the Startup Mahakumbh event in New Delhi on Monday (March 18).
“Government of India is in the process of creating a separate dedicated deeptech startup policy. The policy paper is currently in the final stages of inter-ministerial discussions and we hope to bring it forward soon. After its introduction, we will hopefully move towards creating a dedicated fund of funds,” said Singh.
The development comes at a time when the Centre is focusing on developing segments such as artificial intelligence (AI), semiconductor manufacturing, spacetech and other allied sectors.
In her interim budget speech, finance minister Nirmala Sitharaman announced a corpus of INR 1 Lakh Cr to provide 50-year interest-free loans for research and development in the sunrise sectors.
“The 1 Lakh Cr fund is a path-breaking exercise. We hope that DPIIT can play a role as an intermediating entity between the government and the startup community,” Singh added.
Apart from the Centre’s focus on deeptech, Singh also emphasised the government’s focus on increasing its procurement from the startup ecosystem.
He said that GeM has procured about INR 22K Cr worth of products from startups.
Inc42 data reveals that before 2014, India had fewer than 100 deeptech startups, but between 2014 and 2023, this number surged more than 4 times to over 400 startups.
The ecosystem has become more structured and now encompasses new sub-sectors such as defence tech, dronetech, spacetech, IoT & hardware, and robotic process automation, among others.
These startups leverage advanced technologies like artificial intelligence (AI), augmented reality (AR), virtual reality (VR), cloud computing, machine learning (ML), big data analytics, robotic process automation, Gen AI, and more to address complex global problems with innovative solutions, attracting investors to the sector.
In her interim budget speech, Sitharaman also said that a new scheme would be launched to strengthen the deeptech sector for defence purposes.
Despite the ongoing funding challenges, the sector has continuously grown in the last three years. In 2023, deeptech startups raised $496 Mn compared to $397 Mn in 2022, according to Inc42’s latest “Indian Tech Startup Funding Report 2023”.
Overall, between 2014 and 2023, deep tech startups in India have secured over $1.5 Bn in funding across 343+ deals. Notable startups in the ecosystem include Grey Orange, Smartron, FanCraze, and 5ire among others
