India's DeepTech Challenge: Startups, Funding, and Growth Beyond 2025

What if India became the next global epicenter for DeepTech, driving breakthroughs in AI, Quantum Computing, and BioTech? That future isn’t decades away—it’s unfolding right now. 2025 is shaping up to be a defining moment for India's DeepTech ambitions. It all kicked off with Prime Minister Narendra Modi co-chairing the Paris AI Summit in February, followed by a high-profile meeting with U.S. President Donald Trump in Washington. These events set the stage for India’s strategic partnerships with global DeepTech powerhouses—the U.S., France, Germany, and Israel—while also exploring collaborations with Japan, Switzerland, and the UK.

The DeepTech Revolution Unfolding in India

India’s startup ecosystem is no longer just buzzing; it’s igniting. With over 3,600 DeepTech startups, this movement is about more than just technology—it’s about reshaping industries, solving global challenges, and positioning India as a true innovation leader. AI, Blockchain, IoT, Drones, and Quantum Computing aren’t just trendy buzzwords; they are the foundational elements of India's future.

For decades, India has been synonymous with IT prowess and global outsourcing dominance. But today, the narrative is shifting. A new breed of startups, fueled by scientific breakthroughs and intellectual property, is emerging. These are DeepTech pioneers—ventures that thrive on fundamental research and audacity. They're not just building apps; they're building the future.

Why DeepTech, and Why Now?

The rise of DeepTech startups in India is not coincidental; it’s driven by multiple factors:

• Academic Excellence: Premier institutions like IITs and IIMs are not just nurturing talent but incubating game-changing ideas that transform into startups.
• Government Catalyst: Policies are evolving, with dedicated funding schemes and innovation clusters fostering a thriving DeepTech ecosystem.
• Industry Embrace: Large enterprises are recognizing the disruptive potential of DeepTech and investing heavily in its growth.
• Innovation Explosion: The increasing number of patents being filed signals a decisive shift toward original innovation, moving beyond service-based solutions to create cutting-edge intellectual property.

Challenges on India’s DeepTech Path

Despite its potential, India’s DeepTech journey isn’t without challenges. Several key hurdles need to be addressed to ensure sustained growth:

• Funding Gaps: While India boasts the third-largest DeepTech startup ecosystem globally, it still lags behind its international counterparts in funding, particularly at later stages. This funding gap can stifle growth and prevent startups from scaling effectively.
• Talent Crunch: While AI talent is relatively abundant, specialized expertise across other DeepTech verticals, such as quantum computing and advanced materials, requires significant development. Attracting and retaining top talent is crucial.
• Infrastructure Bottlenecks: Access to advanced computing resources, state-of-the-art research labs, and prototyping facilities remains limited in some areas. Bridging this infrastructure gap is essential for DeepTech development.
• Investor Expertise: DeepTech investment demands a long-term perspective and a deep understanding of complex technologies. Many Indian investors lack the necessary expertise in this area.
• Investor Confidence: Adopting global best practices like loan guarantees, regulatory sandboxes, and robust secondary markets can bolster investor confidence and encourage greater investment in DeepTech.
• Targeted Support: Incentives such as tax credits and grants specifically tailored for DeepTech R&D are crucial for fostering sustained growth and encouraging innovation.

India’s Strategic Approach: A $100 Billion Bet

India’s DeepTech landscape is at a critical inflection point. In a major boost to the sector, the 2025-26 Union Budget unveiled a staggering $100 billion fund earmarked for DeepTech research and development. This could be a game-changer for Indian startups, providing the necessary capital to scale and compete globally. However, India currently ranks last in median funding ticket sizes across all DeepTech ecosystems, highlighting the need for strategic deployment of these funds.

Despite these funding challenges, India’s DeepTech ecosystem is expanding rapidly: (data: Nasscom Report)

• 480 DeepTech startups were established in 2023, nearly twice the number in 2022.
• 100+ of these startups are inventive DeepTech ventures, creating intellectual property and breakthrough solutions.
• Indian DeepTech startups have raised a cumulative $10 billion in the last five years, with $850 million raised in 2023 alone—though this marks a 77% decline from 2022.
• The number of DeepTech investment deals declined by 25% in 2023 compared to 2022.

India's DeepTech Destiny: A Decade of Disruption

With a concerted push from academia, industry, and government, the next decade could witness the rise of Indian DeepTech unicorns solving global-scale challenges. Whether in health tech, space exploration, agriculture, or industrial automation, DeepTech startups are poised to lead the charge.

This is just the beginning. In our next chapter, TICE will explore global DeepTech trends and India’s evolving position in this dynamic landscape. We’ll uncover the specific forces shaping the future of DeepTech innovation and explore the potential for India to become a true global leader in this space. Stay tuned!

The future is not just digital—it’s DeepTech.