KEY POINTS
- The Indian government has extended the official recognition period for deep tech startups from 10 to 20 years.
- Revised rules increase the annual turnover threshold for these specialized firms to ₹300 crore to accommodate long-term growth.
- A new dedicated “Deep Tech” category aims to channel patient capital into research-heavy sectors like semiconductors and space.
India has officially redefined its startup regulations to provide a massive boost to the deep tech sector. The Department for Promotion of Industry and Internal Trade recently issued a notification that fundamentally changes how the country classifies innovative ventures. Under the new framework, companies working on advanced scientific breakthroughs can now remain recognized as startups for up to 20 years. This is a significant jump from the previous decade-long limit applied to all small businesses.
This policy shift acknowledges the unique challenges faced by companies in fields such as biotechnology and quantum computing. Unlike consumer-facing apps, deep tech ventures often require years of research and development before reaching commercialization. By extending the recognition window, the government ensures these firms continue to receive tax benefits and regulatory support during their lengthy gestation periods. Officials want to move India away from simple technology adoption toward genuine global innovation.
In addition to extending the timeline, the government has raised the financial ceiling for startup status. Deep tech entities can now report an annual turnover of up to ₹300 crore while retaining their official classification. For standard startups, this limit has been doubled to ₹200 crore. These adjustments reflect the evolving scale of the Indian entrepreneurial ecosystem and the high capital intensity required for hardware and engineering projects.
To qualify for this new category, firms must demonstrate a primary focus on new scientific knowledge or engineering advancements. They are required to spend a significant portion of their budget on research and development activities. Additionally, these companies must own or be in the process of creating novel intellectual property. A special inter-ministerial board will oversee the certification process to ensure only genuine deep tech ventures benefit from the rules.
The revised framework also introduces strict guidelines on how recognized startups can use their capital. To prevent misuse of incentives, the government has banned investments in speculative assets or non-productive real estate. Funds must be deployed toward core business operations, scaling, and innovation. This ensures that public support directly contributes to national technological sovereignty and economic growth.
Industry leaders and investors have praised the move as a vital step in building a sustainable tech landscape. The extended runway provides international investors with greater confidence in the stability of the local regulatory environment. It also reduces the pressure on founders to move their headquarters abroad in search of late-stage funding. India aims to position itself as a major hub for frontier technologies in an increasingly competitive global market.
