Context:

India’s deep technology (deep tech) sector is emerging as a key driver of transformative innovation, leveraging advanced scientific breakthroughs to address complex challenges across sectors such as defence, healthcare, artificial intelligence (AI), biotechnology, aerospace, and renewable energy. Deep tech encompasses disruptive technologies including AI and machine learning, quantum computing, biotechnology, advanced materials, robotics, and aerospace systems.

Growth and Potential of India’s Deep Tech Sector

India’s deep tech ecosystem has seen rapid expansion in recent years. According to NASSCOM’s 2024 report, over 3,600 deep tech startups operate in India, with 480 new startups launched in 2023 alone, doubling the number from the previous year. While India ranks as the third-largest startup ecosystem globally, its deep tech sector ranks sixth worldwide. This growth reflects a rising blend of entrepreneurial ambition, government support, and increasing collaboration between academic institutions, research organisations, and industry.

Government initiatives such as the Draft National DeepTech Start-up Policy, the National Quantum Mission, India AI Mission, and substantial venture capital funds (e.g., ?1,000 crore for space tech startups) underscore India’s commitment to strengthening this ecosystem. Programmes like the Atal Innovation Mission, NITI Aayog’s innovation initiatives, and Start-up India provide critical support through incubators, accelerators, and funding mechanisms.

The ?20,000 Crore Deep Tech Fund

In the Union Budget 2024-25, Finance Minister announced a ?20,000 crore allocation as a 50-year interest-free loan to private sector-driven deep tech research and innovation. The fund aims to catalyse cutting-edge R&D and position India as a global leader in disruptive technologies.

However, the Parliamentary Standing Committee on Science and Technology, Environment, Forests and Climate Change has raised significant concerns about this scheme. While acknowledging the boldness of the initiative, the Committee warned of risks including potential misallocation of funds, national security implications, and low return on investment for the government. It expressed doubts over the competence of fund managers in selecting impactful projects, cautioning that private entities might benefit disproportionately at public expense.

The Committee suggested that directing such substantial funding toward government research institutions might yield more measurable impact. It emphasized the need for transparency, accountability, and a robust framework to guide the implementation of the fund.

Underutilisation of Scientific Research Funds and Reviving Public Sector Units

The Committee also flagged suboptimal utilisation of allocated funds by the Department of Scientific and Industrial Research, with over half of the budget remaining unused late into the financial year. A significant portion (62%) is consumed by salaries and pensions, leaving limited funds for actual research and infrastructure development.

Further, the Committee highlighted concerns over the poor condition of two public sector undertakings under the Department of Biotechnology—BIBCOL and IVCOL. It recommended their revival to ensure affordable vaccine availability domestically and improve India’s position in the global vaccine market, especially for exports.

Policy Recommendations and Future Outlook

To unlock the full potential of deep tech innovation, the Committee and experts suggest multiple policy measures for Budget 2025 and beyond:

• Ensuring long-term, patient capital through government grants and venture capital funds to meet the high risk and capital-intensive nature of deep tech ventures.
• Strengthening intellectual property rights and establishing commercialisation hubs for startups.
• Enhancing public-private partnerships and specialised talent development through tailored skilling and certifications in AI, robotics, and quantum computing.
• Modernising infrastructure by establishing research hubs, technology parks, and national facilities such as wind tunnels.
• Streamlining regulatory frameworks for faster deployment of emerging technologies like autonomous vehicles and drones.
• Promoting sustainability by incentivising green and climate tech innovations.

Conclusion:

India’s deep tech sector is poised for a transformative leap, but its success hinges on addressing governance, funding utilisation, and ecosystem-building challenges. The government’s strategic interventions and sound policy frameworks will be crucial in translating India’s scientific prowess into global technological leadership.