Despite India’s growing reputation as a global technology hub, a recent study has highlighted that deep tech start-ups in the country continue to face significant challenges due to insufficient institutional support, policy bottlenecks, and a lack of patient capital.

The study, jointly conducted by the Indian Institute of Management Bangalore (IIMB) and the Centre for Innovation and Entrepreneurship Development, reveals that while India boasts over 3,000 deep tech start-ups, only a small fraction succeed in scaling or commercializing their innovations. Deep tech — which refers to start-ups rooted in scientific or engineering innovations such as artificial intelligence, quantum computing, robotics, and biotechnology — remains an undernourished segment in the Indian start-up ecosystem.

Key Findings of the Report

The report underscores several structural challenges:

• Funding Deficit: Most early-stage investors in India shy away from deep tech ventures due to their long gestation periods and high technical risk. The study found that over 70% of deep tech founders struggle to raise seed or Series A capital.

• Inadequate R&D Infrastructure: Despite government efforts like the Atal Innovation Mission and BIRAC for biotech, entrepreneurs cite limited access to advanced labs, prototyping facilities, and mentorship from domain experts.

• Policy and Regulatory Hurdles: The study criticizes the lack of a comprehensive national policy tailored to deep tech. Bureaucratic delays in grant disbursement, unclear IP regulations, and export restrictions on dual-use technologies were cited as major impediments.

• Talent Drain: With better opportunities abroad, many top scientists and engineers either join global firms or relocate, draining India's deep tech potential.

Industry Voices Raise Alarm

“The current start-up ecosystem is primarily geared toward SaaS and consumer tech,” said Dr. Ritu Malhotra, a Bengaluru-based quantum computing entrepreneur. “We need long-term institutional support, not just hackathons and pitch fests.”

Start-up founders also point out that while India has a growing number of unicorns, very few are from deep tech domains. This, they argue, reflects the absence of an enabling environment for foundational innovation.

Government Initiatives: A Work in Progress

While the Department for Promotion of Industry and Internal Trade (DPIIT) and NITI Aayog have launched several schemes aimed at innovation, the report stresses that these remain fragmented and insufficient for deep tech, which requires sustained, multi-year support.

A senior official from the Ministry of Science and Technology, speaking on condition of anonymity, acknowledged the concerns. “We are reviewing our innovation policies to better address deep tech challenges. A national deep tech mission is under discussion.”

Recommendations

The study recommends:

• Establishment of a National Deep Tech Fund with patient capital and flexible terms.

• Creating Centers of Excellence in AI, quantum tech, and robotics in partnership with academia and industry.

• Simplification of IP processes and export licensing for emerging technologies.

• Launching an exclusive policy framework for deep tech entrepreneurship.

The Road Ahead

India’s aspirations to become a global innovation powerhouse may falter unless deep tech ventures are nurtured with the same vigor as IT and fintech start-ups. Experts warn that without systemic reforms and dedicated support, India risks missing the bus in critical technologies of the future.