India has undergone a historical transformation of its startup ecosystem, including special attention to bootstrapping deep tech companies. Thanks to these amended regulations, the time frame deep tech companies can stretch their startup status has doubled from a 10- to 20-year window. This amendment is expected to promote sustainable, long-term development in a fast-growing field that has experienced a downturn. The revisions are intended to address the “graduation cliff” that has historically hindered startups as they scale, leaving them vulnerable to losing support just as they reach their potential.
When speaking on the importance of these changes, Siddarth Pai, the founding partner at 3one4 Capital, made no secret about their importance. In addition, he is co-chair of regulatory affairs for Indian Venture and Alternate Capital Association. To accompany that announcement, he launched the new Research, Development, and Innovation Fund (RDI). Valued at ₹1 trillion (around $11 billion), this fund is expected to help create a robust deep tech ecosystem in India. This step will significantly improve the funding environment, particularly for seed-stage and growth-stage companies.
Vishesh Rajaram, another prominent figure in the Indian deep tech landscape and founding partner at Speciale Invest, noted the previous framework’s shortcomings. Under the old rules, many companies risked losing their startup status while still pre-commercial, which created a “false failure signal.” The new regulations aim to address this gap by providing support for a longer period.
Funding Landscape Transformation
The Indian deep tech startup sector has recently experienced an extraordinary revival of its fortunes, as Indian deep tech startups raised over $1.65 billion in 2025. This figure represents a stunning increase over the $1.1 billion raised in each of the last two years. With that, it’s now approaching the remarkable $2 billion mark set in 2022. Yet in spite of this rapid expansion, India’s deep tech funding is still very far behind its peers. In 2025, U.S. deep tech startups raised a staggering $147 billion. At the same time, China pulled in more than $81 billion in funding in 2018.
Pratik Agarwal, a partner at Accel, was recently quoted discussing the long operational timelines of deep tech companies. He mentioned that these firms typically operate on horizons of seven to twelve years. He highlighted the importance of the new framework increasing predictability for investors. It is not enough to set the right long-term goals and priorities.
Rajaram realized there was a major funding hole when it came to capital-intensive deep tech companies. This problem is especially acute at the Series A stage and up. He’s confident that in time, the new framework will lead to some more serious funding streams, giving startups a leg up when they take off.
“The biggest gap has historically been funding depth at Series A and beyond, especially for capital-intensive deep tech companies.” – Vishesh Rajaram
Government Support and Private Investment
The Indian government’s commitment to nurturing innovation is clear with the creation of the RDI Fund. Siddarth Pai to underscore its mission. He said it acts as a catalyst for more capital formation. This new platform is a promising way to mobilize both private investment and grow potential industries in the deep tech space.
The India Deep Tech Alliance has been formed, bringing together such private investors as Accel, Blume Ventures and Celesta Capital. That’s right—this coalition has more than $1 billion in funding! This alliance aims to enhance collaboration among investors and startups and bolster the growth of deep tech initiatives across the country. Significantly, Nvidia is serving as an adviser to this coalition, underscoring its commitment to supporting India’s tech innovations at all levels.
Arun Kumar, another leader in the field, emphasized the benefits of the new framing. He noted that this approach dramatically increases funding availability for deep tech companies. This is particularly important at their formative and nurturing stages.
“The real benefit of the RDI framework is to increase the funding available to deep tech companies at early and growth stages.” – Arun Kumar
Implications for Future Growth
These changes to India’s startup framework are part of a larger realization of the distinct needs of deep tech companies. The government is increasing the startup lifecycle and increasing revenue thresholds for tax and regulatory benefits to ₹3 billion ($33.12 million). This proposed change is fundamentally about creating the type of environment where innovation and growth thrive.
Neha Singh, cofounder of Transitapp-maker, was excited that the funding momentum signals one big step in the direction of longer-horizon investing. This trend is not unique and is following global practices where investors are starting to realize the opportunities in deep tech sectors.
As Pratik Agarwal noted, classifying deep tech as a separate category helps to streamline the fundraising process. This formal recognition facilitates productive engagement with state agencies. He was excited about the potential for Indian deep tech companies to take center stage.
“Deep tech companies operate on seven- to twelve-year horizons, so regulatory recognition that stretches the lifecycle gives investors greater confidence that the policy environment will not change mid-journey.” – Pratik Agarwal
“The change shows that India is learning from the U.S. and Europe on how to create patient frameworks for frontier building.” – Pratik Agarwal