India Doubles Deep Tech Startup Support to 20 Years

How long does it take to build a semiconductor company? Unlike a typical app startup that can launch in months, deep tech ventures need 7-12 years just to reach commercial viability. India just acknowledged this reality by fundamentally restructuring how it supports science-led startups.

Policy Meets Reality

This week, India doubled the period deep tech companies can maintain startup status from 10 to 20 years and tripled the revenue threshold for startup benefits from $11 million to $33 million. The change aligns policy timelines with the extended development cycles typical of space, semiconductor, and biotech ventures.

"Under the previous framework, companies often risked losing startup status while still pre-commercial, creating a 'false failure signal' that judged science-led ventures on policy timelines rather than technological progress," explained Vishesh Rajaram, founding partner at Speciale Invest.

The timing isn't coincidental. This policy shift comes as India's $11 billion Research, Development and Innovation Fund (RDI) begins taking operational shape, designed to provide patient capital for long-horizon technologies. Meanwhile, U.S. and Indian venture firms launched the $1 billion India Deep Tech Alliance, with Nvidia as advisor and participation from Accel, Qualcomm Ventures, and others.

The Capital Depth Problem

While regulatory recognition helps, investors say access to capital remains the binding constraint. "The biggest gap has historically been funding depth at Series A and beyond, especially for capital-intensive deep tech companies," Rajaram noted.

The numbers tell the story. Indian deep tech startups raised $1.65 billion in 2025, rebounding from $1.1 billion in each of the previous two years. But this pales against the $147 billion raised by U.S. deep tech startups and $81 billion in China during the same period.

Arun Kumar of Celesta Capital sees the RDI fund as addressing this gap by routing public capital through venture funds with tenors similar to private capital. "The real benefit is to increase funding available to deep tech companies at early and growth stages," he said.

Global Investor Signal

For international investors, India's framework change signals longer-term policy intent rather than triggering immediate allocation shifts. "Deep tech companies operate on seven- to twelve-year horizons, so regulatory recognition that stretches the lifecycle gives investors greater confidence that the policy environment won't change mid-journey," said Pratik Agarwal of Accel.

The extended runway strengthens the case for building and staying in India, though questions remain about whether this will reduce the tendency of Indian startups to shift headquarters overseas as they scale. Over the past five years, India's public markets have shown growing appetite for venture-backed tech companies, making domestic listings more credible than before.

The Benchmark Test

Siddarth Pai of 3one4 Capital noted that India's framework avoids a "graduation cliff" that historically cut companies off from support just as they scale. But the ultimate test will be commercial outcomes.

"It would be great to see ten globally competitive deep tech companies from India achieve sustained success over the next decade," Kumar said, describing that as his benchmark for assessing whether India's deep tech ecosystem is truly maturing.