Can the Government’s Deep-Tech Definition Revive India’s R&D Ecosystem?
On February 7, 2026, the Union Government announced formal eligibility criteria for “deep tech start-ups” via a notification from the Department for Promotion of Industry and Internal Trade (DPIIT). Among the parameters: a turnover cap of ₹300 crore, a 20-year timeframe for retaining start-up status, and a requirement to focus heavily on research and development (R&D). These measures aim to position India as a global hub for advanced technologies like quantum computing, artificial intelligence, and green energy. But policy ambition and ground realities rarely align seamlessly. Will this initiative truly catalyse India’s innovation ecosystem, or are we witnessing over-engineered bureaucracy in action?
The Institutional Framework: Certifying Innovation?
The DPIIT’s notification outlines a well-defined mechanism for identifying and certifying deep tech companies. An Inter-Ministerial Board of Certification — comprising representatives from the DPIIT, Department of Science and Technology (DST), and Department of Biotechnology (DBT) — will oversee approvals. Companies must demonstrate significant investments in R&D, possess novel intellectual property (IP), and navigate long development cycles to qualify.
This institutional clarity is welcome, as it provides a legal basis for deep-tech incentives. But the certification process also raises concerns. With no transparency provisions in place, how will the Board ensure consistency and fairness in awarding certifications? What mechanisms exist to appeal unjust rejections? Institutional bottlenecks of this kind have hobbled earlier schemes, including DPIIT's Start-up India framework, where certification delays led to uncertainty over tax exemptions. “Deep tech” risks remaining a buzzword unless operational hurdles are smoothed out.
Unpacking the Ground Realities
The headline-grabbing Rs 1 lakh crore Research, Development, and Innovation (RDI) Scheme, spearheaded by the DST, shows the government’s intention to strengthen R&D. With Rs 20,000 crore allocated for FY 2025–26, the focus areas are sunrise technologies and high-strategic-value sectors. However, these numbers require scrutiny. India’s gross expenditure on R&D as a percentage of GDP continues to hover below 1%, far behind South Korea’s 4.5% or the OECD average of 2.68% (as of 2023).
Moreover, while the RDI Scheme pushes for private-sector participation in R&D, the reality is that the private sector currently contributes less than 40% to India’s total R&D expenditure, compared to over 70% in the United States. Without robust fiscal incentives or risk-sharing mechanisms, the government’s hope of coaxing private capital into long-gestation, high-risk deep tech domains appears unrealistic.
Consider also the availability of physical infrastructure. Cutting-edge deep tech like semiconductor fabs and quantum computing demands specialised testing facilities, which remain conspicuously sparse in India. A single supercomputing facility in Pune and limited prototyping infrastructure paints a dismal picture. For start-ups in Bengaluru, Pune, or Hyderabad, accessing such facilities often means protracted waitlists and logistical hurdles that stymie progress. Breaking ground here would require investment in national networks of shared innovation hubs — a key area where the current framework remains silent.
The Central Tensions: Framework Meets Reality
One of the most glaring friction points lies in the federal structure. Innovation ecosystems are inherently local — reliant on regional universities, state-level grants, and city-based industrial clusters. Yet, the deep-tech framework leans heavily on centralised decision-making through the DPIIT’s certification process. Will states with robust start-up ecosystems like Karnataka or Maharashtra align with the Centre’s eligibility criteria, or will state governments develop their own parallel schemes? The risk of duplicity or conflict isn’t merely hypothetical; it mirrors dilemmas seen with GST implementation and the overlap of central and state tax authorities.
A deeper tension stems from linking certification strictly to R&D and IP outcomes. While these are vital, the criteria overlook engagement with end-user markets, a key barrier for deep-tech commercialisation globally. In areas like precision agriculture or rural healthcare, on-ground adoption hinges on building supplier relationships, training users, and navigating regulatory environments — dimensions beyond lab-based work. India’s policy framework appears blind to these blockages.
Learning from South Korea: Aligning Incentives
South Korea offers a compelling counterpoint. Its "Creative Economy Initiative" ties R&D investments with a focus on specific societal challenges, such as aging populations or green energy, ensuring that innovations are both goal-directed and heavily subsidised. Crucially, South Korea doesn’t centralise funding decisions. Regional Development Agencies wield significant autonomy, directly linking local academic institutions with private firms. This decentralised, demand-driven model has helped South Korea maintain its global leadership in high-tech exports, ranging from semiconductors to battery technologies.
Can India emulate this? Its current deep-tech framework’s centralised certification process runs counter to South Korea's decentralised approach, raising doubts about whether allocated funds will trickle down to diverse fields and geographic regions.
Looking Ahead: Ambitions Need Metrics
The initiative’s success hinges on more than defining eligibility. Practical questions loom. How will India measure progress? Patents filed or commercialised? Doctoral researchers retained? The RDI Scheme must include explicit metrics — disaggregated by sector and geography — to track the health of India’s deep-tech ecosystem. Random allocation of blanket funds has failed before, as seen in misplaced priorities under the Smart Cities Mission.
Furthermore, market adoption barriers must enter policymaking discourse. The government should consider revamped regulatory sandboxes for controlled roll-out of deep tech in fields like biotechnology or robotics, incentivising partnerships and attracting private investors. Without these, the gap between potential and public impact could widen, leaving deep tech a domain for speech-making rather than scalable solutions.
Frequently Asked Questions
What are the main eligibility criteria for deep tech start-ups as announced by the Indian government?
The Indian government's eligibility criteria for deep tech start-ups includes a turnover cap of ₹300 crore, a maximum of 20 years to retain start-up status, and a strong emphasis on research and development (R&D). These criteria are designed to position India as a leader in advanced technologies, specifically targeting innovative fields such as quantum computing and artificial intelligence.
How does the Institutional Framework outlined by the DPIIT aim to support deep tech start-ups?
The DPIIT's Institutional Framework sets up an Inter-Ministerial Board of Certification that includes representatives from various government departments to oversee approvals for deep tech companies. To qualify, companies must show significant R&D investments and possess unique intellectual property, which establishes a legal basis for receiving deep-tech incentives and certifications.
What challenges may arise from the government’s push for private sector participation in R&D?
One major challenge is that the private sector currently contributes less than 40% to India's total R&D expenditure, which contrasts sharply with over 70% in the United States. Without adequate fiscal incentives and support for high-risk ventures in deep tech, the government's ambitions may not attract sufficient private capital necessary for long-term innovation.
In what ways does India’s physical infrastructure impact the growth of deep tech start-ups?
The lack of specialized testing facilities for deep tech, such as semiconductor fabs and supercomputing resources, poses a significant obstacle for start-ups in cities like Bengaluru and Pune. Access to these facilities is often hindered by logistical difficulties and lengthy waitlists, which can delay critical development processes for emerging technologies.
How does the Indian government’s deep-tech initiative compare with South Korea's approach to fostering innovation?
Unlike India's centralized decision-making model, South Korea's Creative Economy Initiative integrates R&D investments with societal challenges and ensures regional autonomy in funding decisions. This approach helps create a more responsive innovation ecosystem that directly addresses local needs, which contrasts with India's tendency to overlook regional dynamics and the importance of market engagement in deep tech commercialization.
Source: LearnPro Editorial | Science and Technology | Published: 7 February 2026 | Last updated: 3 March 2026
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