India Formalises Deep-Tech Startup Definition, Extends Recognition to 20 Years

The Indian government has, for the first time, formally defined deep-tech startups, expanding the scope of benefits available to research-intensive ventures. Under a revised framework notified by the Department for Promotion of Industry and Internal Trade (DPIIT), deep-tech startups will now be eligible for recognition for up to 20 years from incorporation, with an enhanced annual turnover ceiling of ₹300 crore.

The notification, issued recently and signed by Sanjiv, Joint Secretary at DPIIT under the Startup India programme, supersedes the February 19, 2019 startup definition and comes into effect immediately. It introduces a distinct regulatory framework for deep-tech ventures, recognising their longer development cycles, higher capital needs and scientific risk.

The move comes at a time when India's deep-tech sector is gaining momentum, with the country now home to approximately 3,600 deep-tech startups across sectors like artificial intelligence, biotechnology, quantum computing, space technology, and advanced materials science.

Under the new rules, a deep-tech startup will lose its recognition only once it completes 20 years from incorporation or if its turnover exceeds ₹300 crore in any financial year. In comparison, standard startups remain eligible for recognition for 10 years, with a turnover cap of ₹200 crore. Notably, the ₹200 crore threshold for regular startups represents a doubling from the earlier ₹100 crore limit set in 2019.

What Qualifies As Deep-Tech Startup

“The revised framework takes a more thoughtful approach to deep-tech innovation by clearly defining eligibility, extending timelines, and raising turnover limits, while keeping capital focused on core R&D, an important step toward positioning India as a global deep-tech hub,” said Srividya Kannan, Founder and CEO of Avaali Solutions.

To qualify as a deep-tech startup, an entity must meet four additional criteria beyond standard startup requirements. It must be working on new or advanced science- or engineering-based technology, spend a significant share of its funds on R&D, create or own new intellectual property with plans to commercialise it, and operate in areas that need long development time, high investment and involve major technical risk.

DPIIT will assess these attributes based on documents submitted through its designated portal. Deep-tech applicants must also provide proof that they meet the specialised criteria and then the DPIIT will review the details and decide whether to approve or reject the application.

2026-27 Budget Support

The revised framework aligns with the government's broader push for deep-tech innovation announced in Union Budget 2026-27, presented on February 1. Finance Minister Nirmala Sitharaman announced ₹20,000 crore for private sector-driven research, development and innovation initiatives for FY 2026-27, as part of the larger ₹1 lakh crore Research Development and Innovation (RDI) Scheme, with a focus on developing indigenous capabilities in semiconductors, artificial intelligence, quantum computing, and biotechnology.

The budget also announced a Deep Tech Fund of Funds to support early-stage deep-tech startups working on breakthrough technologies. Additionally, the India Semiconductor Mission 2.0 was launched with ₹40,000 crore allocated for the Electronics Component Manufacturing Scheme, pivoting from assembly-led incentives to IP-centric, fabless models.

Recent Deep-Tech Developments

India's deep-tech ecosystem has witnessed significant activity in recent months. In January 2026, Bengaluru-based quantum computing startup QNu Labs raised $40 million in Series B funding to expand its quantum-safe cryptography solutions, marking one of the largest funding rounds in India's quantum tech sector.

The Indian Space Research Organisation (ISRO) announced in December 2025 that it would open up space-tech opportunities to private deep-tech startups through its NewSpace India Limited arm, enabling companies to participate in satellite manufacturing, launch services, and space applications.

In the biotechnology sector, Hyderabad-based Bugworks Research raised $18 million in November 2025 to advance its novel antibiotic development programme, highlighting growing investor interest in life sciences deep-tech ventures. The company is developing new antibiotics to combat drug-resistant bacteria, addressing a critical global health challenge.

The government's National Deep Tech Startup Policy, released in October 2025, identified 25 priority technology areas ranging from advanced materials and green hydrogen to neuromorphic computing and synthetic biology. The policy framework emphasised that India aims to build 500 deep-tech unicorns by 2030.

Standard Startup Rules Updated

Under the general category, startups must be registered in India as a private company, partnership, LLP, or cooperative society. They should be less than 10 years old, have annual turnover below ₹200 crore, and be focused on innovation, improving products or processes, or building scalable businesses that create jobs or wealth. Companies formed by splitting or restructuring existing businesses are not eligible.

“The revised startup framework is a positive step, as higher turnover limits and longer timelines for deep-tech better reflect real innovation cycles and give founders the confidence to scale and invest in R&D,” said Rahul Garg, Founder and CEO of Moglix.

Startups must apply for recognition through the DPIIT portal by submitting incorporation documents and a brief description of their business.

As of December 31, 2024, DPIIT had recognised more than 1.57 lakh startups across India, with the ecosystem having created over 17.28 lakh direct jobs and producing more than 100 unicorns, according to government data.

Startup Funds And Tax Benefits

The notification also places restrictions on the use of funds by recognised startups, including deep-tech ventures. During the recognition period, startups are barred from investing in non-business real estate, speculative assets, luxury items, or unrelated capital contributions, except where such investments are integral to core business operations.

Eligible startups structured as private limited companies or LLPs may apply for tax benefits under Section 80-IAC of the Income Tax Act, 1961. Applications will be evaluated by an Inter-Ministerial Board comprising DPIIT, the Department of Biotechnology and the Department of Science and Technology.

However, despite India having over two lakh DPIIT-recognised startups, only around 2% currently benefit from the Section 80-IAC income tax exemption, according to tax experts, indicating that most startups either don't meet the stringent criteria or find the application process cumbersome.

India’s move comes as countries around the world race to lead in frontier technologies. The US has committed over $280 billion to advanced research under its CHIPS and Science Act, while China has invested more than $150 billion in areas such as AI, quantum computing and biotech. The European Union has also stepped in, launching a €10 billion Deep Tech Initiative in 2024. Against this backdrop, India’s revised framework helps it compete for global capital and retain domestic deep-tech talent. Longer recognition timelines are especially important for sectors like biotech and space, where development and approval cycles can take a decade or more.