New Startup Definition: Deep Tech Firms Get 20-Year Recognition Under Expanded Startup India Framework

India’s startup policy just took a decisive step into the future—and this time, it’s speaking directly to founders building the hardest, deepest technologies.

For years, India’s deep tech entrepreneurs have worked in a system designed largely for faster-moving digital startups. While software-first ventures could scale in months, companies working on advanced materials, semiconductors, AI hardware, space tech, biotech or clean energy often needed years—sometimes decades—before their ideas were ready for the market. That mismatch has now been formally acknowledged.

In a landmark move, the government has expanded the definition of startups under the Startup India programme to officially include deep technology companies as a distinct category. More importantly, it has redesigned the rules to reflect the realities of building science-led businesses.

Startup Definition: A policy shift that recognises patience, risk and research

Through a gazette notification issued on February 4, the Department for Promotion of Industry and Internal Trade (DPIIT) announced that startups recognised as deep tech entities will now be eligible for government benefits for up to 20 years from the date of incorporation. This is double the recognition window available to other startups, which remains capped at 10 years.

Alongside the extended timeline, the government has also raised the turnover ceiling for deep tech startups to Rs 300 crore, compared to Rs 200 crore for regular startups. The notification takes effect immediately and supersedes the startup definition issued in February 2019.

Taken together, these changes mark a clear message from the Centre: innovation that takes longer to mature deserves longer policy support.

For the first time, a clear definition of deep tech

Perhaps the most significant aspect of the notification is that it clearly defines what qualifies as a deep tech startup—something that had remained ambiguous until now.

According to the new framework, a deep tech startup must be built on new scientific or engineering knowledge. It should demonstrate a high proportion of expenditure on research and development and must either own, or be in the process of creating, significant and novel intellectual property with a clear plan for commercialisation.

Crucially, the policy also acknowledges what founders and investors have long argued: deep tech companies face higher capital requirements, longer gestation periods, and greater technical or scientific uncertainty than most traditional startups. By recognising these realities in regulation, the government has laid the groundwork for more patient capital and long-term innovation.

What hasn’t changed—and why that matters

While deep tech has been brought into sharper focus, the government has been careful not to dilute the broader startup framework.

The core startup definition remains unchanged. To qualify, an entity must be incorporated or registered in India as a private limited company, partnership firm, limited liability partnership, or cooperative society. It must also be driven by innovation or a scalable business model with the potential to create employment or generate wealth.

This continuity ensures that the ecosystem remains stable for existing startups, even as new layers are added for more complex, research-driven ventures.

How recognition will work

Startup recognition will continue to be routed through the DPIIT portal. Applicants are required to submit incorporation or registration documents, along with a write-up explaining their innovation or scalability.

Deep tech startups, however, will need to go a step further. They must provide additional details demonstrating that they meet the prescribed scientific, R&D and intellectual property criteria. DPIIT will evaluate these applications using internal frameworks and guidelines issued by the department.

The notification also clearly spells out exit conditions, bringing much-needed clarity. Regular startups will lose recognition after completing 10 years from incorporation or if their annual turnover crosses Rs 200 crore in any financial year. Deep tech startups will exit the framework after 20 years or upon breaching the Rs 300 crore turnover limit—whichever happens earlier.

Tax incentives remain, but with tighter oversight

Recognised startups, including deep tech firms, can continue to apply for income-tax exemptions under Section 80-IAC of the Income-tax Act, subject to certification by the Inter-Ministerial Board.

At the same time, the government has retained the authority to revoke such certification if it is found that benefits were obtained through misrepresentation or false information—signalling stricter oversight alongside expanded support.

Clear boundaries on how startup funds can be used

The revised framework also tightens rules around the use of funds during the recognition period. Startups are prohibited from deploying capital into activities unrelated to their core business.

These restrictions include investments in residential real estate, non-core land and buildings, unrelated loans and advances, capital contributions to other entities, shares and securities not linked to core operations, luxury assets, and other speculative or non-productive activities.

However, the Centre has kept some flexibility in reserve. It has the right to relax or modify these conditions for specific classes of startups or individual cases, allowing room for nuanced decision-making where needed.

Why this matters for India’s innovation story

This policy update is more than a regulatory tweak. It represents a shift in how India views innovation—away from short-term scale alone and towards long-horizon, research-led value creation.

By formally recognising deep tech startups, extending their support window, and aligning policy with scientific realities, the government is signalling that India wants to compete not just in apps and platforms, but in foundational technologies that shape the next few decades.

For founders working on breakthroughs that take time, and for investors backing them with patience and capital, this move could prove to be a defining moment in India’s deep tech journey.