India is preparing to make up to $25 billion available for investments in Deep Tech start-ups as it seeks to reduce its reliance on foreign frontier technology and strengthen its position in the global technology race.
Rajat Tandon, president of the Indian Venture and Alternative Capital Association, told CNBC that India invested $11.6 billion in Deep Tech over the past decade.
He said the Indian government has now committed $11 billion through the Research Development Infrastructure Fund, with venture capital and private equity fund managers expected to match the investment.
An additional $3 billion to $4 billion is expected to be added, bringing the total funds available for Deep Tech investments to about $25 billion, Tandon said.
Deep Tech is a broad term covering start-ups working in areas including artificial intelligence, semiconductors, advanced manufacturing, drones and space technology.
Experts told CNBC that the funding push reflects growing recognition by the Indian government that frontier technology has become increasingly important amid rising geopolitical tensions.
The United States and China currently lead the global artificial intelligence race, while concerns over Chinese technology and US restrictions on technology exports have increased pressure on India to develop domestic capabilities.
“Tariffs from the U.S. actually help this [Deep Tech] segment a lot,” Anandamoy Roychowdhury, managing director of Crane Venture Partners, said.
He said India is likely to develop more local Deep Tech companies because of concerns that access to important technology “can get cut off at any point.”
Those concerns were highlighted earlier in June when Anthropic disabled access to its Fable 5 and Mythos 5 models for foreign nationals, in compliance with a US government export-control directive.
Fund managers attending SuperReturn Asia said India’s Deep Tech sector remains at a nascent stage but could eventually produce global technology leaders, citing the quality of ideas and talent in the country.
Shweta Rajpal Kohli, president and chief executive of Startup Policy Forum, said there has been a “dramatic acceleration of innovation” in India’s Deep Tech sector, with some companies moving from prototypes to “real commercialization.”
Earlier this year, Vibe-coding start-up Emergent, space technology company Skyroot and India’s full-stack sovereign AI company Sarvam became unicorns after their valuations crossed $1 billion during fundraising rounds.
Roychowdhury described the investment opportunities in India as being like “a kid in a candy store.” He said about 80% of his $150 million Asia-Pacific fund is currently concentrated in India.
An IVCA report published in August found that nine out of 10 funds surveyed were deploying capital in Deep Tech start-ups, while 37% held stakes in between 11 and 20 such companies.
The report also said the sector attracted nearly $3 billion in funding in 2025, its highest-ever level, despite an overall decline in start-up funding in India. However, funding remained significantly below the $136 billion raised by the sector in the United States.
A major challenge for Indian Deep Tech start-ups remains access to sufficient domestic capital to scale businesses that typically require long development periods and significant investment.
“Our challenge today in India is that only 2% of people are able to sign” checks above $10 million, Tandon said, adding that high-net-worth individuals and family offices need to increase their investments to support the development of Deep Tech in India.
Boluwatife Enome
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