Evolution of India's Deep Tech Policy Framework: UPSC Current Affairs Story Arc
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ExploreWhile India boasts over 100+ unicorns, the Commerce Minister pointed out a glaring gap: our innovation engine is fueled by consumer apps, while China (Rank 11 in GII) outpaces us (Rank 39) in deep-tech. By February 2026, the government doubled the startup turnover threshold to ₹200 crore specifically to bridge this 'hard science' divide.
Overview
This arc tracks India's strategic pivot from a consumer-centric startup ecosystem to a 'Deep Tech' powerhouse. Triggered by high-level ministerial criticism in early 2025, the government recognized that sectors like AI, semiconductors, and EVs require more than just digital platforms—they need patient capital and R&D support. Over ten months, the policy evolved from verbal criticism to removing the mandatory three-year viability rule for funding, and finally, creating a legal definition for 'Deep Tech Startups.' This matters because it signals India's intent to move up the Global Innovation Index (GII) and achieve 'Viksit Bharat 2047' through fundamental scientific breakthroughs rather than just service delivery.
How This Story Evolved
Minister criticizes lack of deep-tech focus (Apr '25) → Govt eases funding norms for deep-tech (Jan '26) → DPIIT officially defines and creates sub-category for Deep Tech Startups (Feb '26)
- 2025-04-11: Indian Startups: Focus on Deep-Tech Innovation
More details
UPSC Angle: Debate on Indian startups prioritizing consumer ventures over deep-tech.
Key Facts:
- Commerce Minister criticized Indian startup ecosystem
- Criticism: Focus on consumer-centric ventures
- Call for a shift toward deep-tech innovation
- India has over 100+ unicorns
- Driven by digital payments, e-commerce, and consumer-tech
- India processed over 100 billion UPI transactions in 2023
- ₹10,000 crore Deep-Tech Fund and India Semiconductor Mission are recent efforts
- Over 65% of the population under 35
- Piyush Goyal: Criticized Indian startups on April 3, 2025
- Viksit Bharat 2047: Requires innovation as the engine of transformation
- Global Innovation Index 2024: India ranked 39th, China ranked 11th
- China's Made in China 2025 initiative: India's support remains modest
- India invested $160 billion in tech from 2014 to 2024
- China invested $845 billion in tech from 2014 to 2024
- 2026-01-06: Govt Eases Funding Norms for Deep-Tech Start-ups
More details
UPSC Angle: Govt eases funding norms for deep-tech start-ups.
Key Facts:
- Government relaxed norms for deep-tech start-ups
- Financial assistance from the Department of Scientific and Industrial Research (DSIR)
- Mandatory three-year viability criterion removed
- Financial assistance of up to ₹1 crore
- Funding support under the Industrial Research and Development Promotion Programme (IRDPP)
- Relaxation: Removed 3-year viability criterion for deep-tech start-ups
- Financial Assistance: Up to ₹1 crore from DSIR
- Funding Program: Industrial Research and Development Promotion Programme (IRDPP)
- 2026-02-07: Definition of Deep Tech Start-ups
More details
UPSC Angle: Government officially defines “Deep Tech Start-ups”.
Key Facts:
- Start-up Type: Deep Tech Start-ups
- Definition: Enterprises that build solutions based on new scientific or engineering knowledge
- Characteristics: High technical uncertainty, long gestation periods, and intensive research and development (R&D)
- Notification: Defined and notified eligibility criteria through a DPIIT gazette notification
- Definition of Deep Tech Start-ups was issued by the Department for Promotion of Industry and Internal Trade (DPIIT)
- Deep tech includes nanotechnology, biotechnology, material sciences, quantum technologies, semiconductors, artificial intelligence, data sciences, robotics, 3D printing, etc
- 2026-02-07: DPIIT Revises Startup Recognition Framework
More details
UPSC Angle: DPIIT revised startup recognition framework under Startup India Action Plan.
Key Facts:
- Turnover threshold for startup recognition increased from Rs 100 crore to Rs 200 crore
- New sub-category: 'Deep Tech Startup'
- Eligibility Criteria for new sub-category: Considering the long gestation periods, high Research and Development (R&D) intensity and capital requirements of deep technology ventures
Genesis
Trigger
Minister Piyush Goyal's critique on April 3, 2025 (reported April 11), where he lambasted Indian startups for focusing on consumer-centric ventures over deep-tech innovation, contrasting India's trajectory with China's focus on EVs and AI.
Why Now
The shift was driven by the realization that India's GII rank (39th) lagged behind major competitors despite having the 3rd largest startup ecosystem, necessitating a focus on 'frontier technologies' to sustain long-term growth.
Historical Context
Since the launch of the Startup India Action Plan in 2016, the focus was on 'ease of doing business' and digital services. This arc represents a maturing of that policy to include 'Science-led' entrepreneurship.
Key Turning Points
- [2026-01-06] DSIR relaxes funding norms under IRDPP
It removed the 'three-year viability' hurdle, acknowledging that deep-tech ventures cannot show profits as quickly as consumer startups.
Before: Startups needed 3 years of viability for DSIR funding. After: Financial assistance up to ₹1 crore available without this constraint.
- [2026-02-07] DPIIT Gazette Notification on Deep Tech Definition
It legally codified what constitutes a 'Deep Tech Startup,' enabling targeted policy benefits and preventing 'innovation-washing'.
Before: Deep-tech was a buzzword with no legal standing. After: It is a recognized sub-category with a ₹200 crore turnover limit.
Key Actors and Institutions
| Name | Role | Relevance |
|---|---|---|
| Piyush Goyal | Union Minister of Commerce and Industry | Initiated the policy shift in April 2025 by criticizing the 'consumer-only' focus of Indian startups and calling for a pivot to deep-tech innovation. |
Key Institutions
- Department for Promotion of Industry and Internal Trade (DPIIT)
- Department of Scientific and Industrial Research (DSIR)
- World Intellectual Property Organization (WIPO)
- Ministry of Commerce and Industry
Key Concepts
Deep Tech
Advanced and disruptive technologies based on new scientific or engineering knowledge, characterized by high technical uncertainty and long development cycles.
Current Fact: Officially defined by DPIIT in February 2026 as enterprises building solutions based on intensive R&D and scientific knowledge.
Global Innovation Index (GII)
An annual ranking of countries by their capacity for, and success in, innovation, published by WIPO.
Current Fact: India ranked 39th in the 2024 GII, while China held the 11th spot, as cited in the Minister's 2025 critique.
Gestation Period
The time interval between the initial R&D of a product and its commercial availability, which is significantly longer for deep-tech than for software apps.
Current Fact: The DPIIT revised framework specifically increased the turnover threshold to ₹200 crore to account for these 'long gestation periods'.
What Happens Next
Current Status
As of February 7, 2026, Deep Tech Startups are officially defined by a DPIIT gazette notification, and a new sub-category exists within the Startup India framework with an increased turnover threshold of ₹200 crore.
Likely Next
Introduction of specific tax breaks for R&D-heavy startups and the potential creation of a dedicated National Deep Tech Fund as proposed in draft policies.
Wildcards
A global tech slowdown could drain the high-risk 'patient capital' needed for these long-gestation projects, potentially stalling the momentum.
Why UPSC Cares
Syllabus Topics
- Science and Technology- developments and their applications and effects in everyday life
- Indigenization of technology and developing new technology
- Government policies and interventions for development in various sectors
Essay Angles
- Innovation: The engine for Viksit Bharat 2047
- From 'Jugaad' to Deep Tech: The evolution of the Indian entrepreneurial spirit
- The role of State as a facilitator in high-risk research
Prelims Likely: Yes
Mains Likely: Yes
Trend Signal: rising
Exam Intelligence
Previous Year Question Connections
- Asked about India's rank in Global Innovation Index-2023 (Rank 40) and its trajectory. — This arc updates the rank to 39th (2024) and provides the policy reason for pushing to improve it further.
- Operationalization of Startup India Hub (2016). — The arc shows the latest major evolution of the Startup India framework (sub-category creation) since its 2016 inception.
Prelims Angles
- New turnover threshold for Startup recognition is ₹200 crore (up from ₹100 crore).
- The agency responsible for the gazette notification of Deep Tech startups is DPIIT.
- DSIR provides funding up to ₹1 crore under the Industrial Research and Development Promotion Programme (IRDPP) without the 3-year viability rule.
- The definition of Deep Tech specifically includes 'high technical uncertainty' and 'long gestation periods'.
Mains Preparation
Sample Question: Analyze the shift in India's startup policy from consumer-tech to deep-tech innovation. To what extent can the new Deep Tech Startup sub-category address the structural challenges of the Indian innovation ecosystem?
Answer Structure: Intro: Context of India's GII rank and the need for Viksit Bharat 2047 → Body 1: Challenges of Deep Tech (long gestation, high risk, lack of patient capital) → Body 2: Recent policy changes (DPIIT definition, DSIR funding relaxation, turnover threshold) → Body 3: Comparative analysis with global peers (China/US) → Conclusion: Deep tech as a necessity for strategic autonomy and economic transformation.
Essay Topic: Technological Sovereignty: Moving Beyond the Service-Sector Paradigm.
Textbook Connections
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 7: p. 238
Provides the baseline definition of a startup with a ₹100 crore turnover limit and 10-year age limit.
Gap: Outdated as per this arc; the turnover threshold has been increased to ₹200 crore by the Feb 2026 DPIIT notification.
Indian Economy, Nitin Singhania (ed 2nd 2021-22) > Chapter 14: p. 431
Notes India as the 3rd largest ecosystem for startups, citing Paytm and Ola as top examples.
Gap: Reinforces the 'consumer-centric' focus that Minister Goyal criticized in 2025 as needing a transition toward Deep Tech.
Quick Revision
- April 2025: Commerce Minister urges shift from consumer-tech to deep-tech.
- India's 2024 GII Rank: 39th (China: 11th).
- January 2026: DSIR removes 3-year viability rule for deep-tech startups.
- Funding available under IRDPP: Up to ₹1 crore from DSIR.
- February 7, 2026: Official DPIIT notification defining 'Deep Tech Start-ups'.
- Revised turnover threshold for Startup recognition: Increased from ₹100 crore to ₹200 crore.
- Key characteristics of Deep Tech: High R&D intensity, high technical uncertainty, and long gestation periods.
Key Takeaway
India's startup policy has matured from promoting service-delivery apps to legally and financially supporting 'Deep Tech' ventures, aiming to bridge the innovation gap with global leaders like China.
All Events in This Story (4 items)
- 2025-04-11 [Economy] — Indian Startups: Focus on Deep-Tech Innovation
Commerce Minister Piyush Goyal criticized Indian startups on April 3, 2025, for prioritizing consumer-centric ventures over deep-tech innovation, initiating a debate on India's innovation ecosystem. Goyal contrasted India's approach with China's focus on electric vehicles, semiconductors, and AI, urging a reflection on India's innovation trajectory as India eyes Viksit Bharat 2047, innovation must be the engine of transformation. India ranks 39th on the 2024 Global Innovation Index, while China holds the 11th spot.More details
UPSC Angle: Debate on Indian startups prioritizing consumer ventures over deep-tech.
Key Facts:
- Commerce Minister criticized Indian startup ecosystem
- Criticism: Focus on consumer-centric ventures
- Call for a shift toward deep-tech innovation
- India has over 100+ unicorns
- Driven by digital payments, e-commerce, and consumer-tech
- India processed over 100 billion UPI transactions in 2023
- ₹10,000 crore Deep-Tech Fund and India Semiconductor Mission are recent efforts
- Over 65% of the population under 35
- Piyush Goyal: Criticized Indian startups on April 3, 2025
- Viksit Bharat 2047: Requires innovation as the engine of transformation
- Global Innovation Index 2024: India ranked 39th, China ranked 11th
- China's Made in China 2025 initiative: India's support remains modest
- India invested $160 billion in tech from 2014 to 2024
- China invested $845 billion in tech from 2014 to 2024
- 2026-01-06 [Economy] — Govt Eases Funding Norms for Deep-Tech Start-ups
The Union government has relaxed funding norms for deep-tech start-ups seeking financial assistance from the Department of Scientific and Industrial Research (DSIR). The mandatory three-year viability criterion for deep-tech start-ups has been removed to facilitate financial assistance of up to ₹1 crore from DSIR. The funding is provided under the Industrial Research and Development Promotion Programme (IRDPP).More details
UPSC Angle: Govt eases funding norms for deep-tech start-ups.
Key Facts:
- Government relaxed norms for deep-tech start-ups
- Financial assistance from the Department of Scientific and Industrial Research (DSIR)
- Mandatory three-year viability criterion removed
- Financial assistance of up to ₹1 crore
- Funding support under the Industrial Research and Development Promotion Programme (IRDPP)
- Relaxation: Removed 3-year viability criterion for deep-tech start-ups
- Financial Assistance: Up to ₹1 crore from DSIR
- Funding Program: Industrial Research and Development Promotion Programme (IRDPP)
- 2026-02-07 [Economy] — Definition of Deep Tech Start-ups
The Union Government has officially defined “Deep Tech Start-ups” through a gazette notification issued by the Department for Promotion of Industry and Internal Trade (DPIIT). Deep tech refers to advanced and disruptive technologies that have the potential to trigger transformative change, and provide solutions for the future.More details
UPSC Angle: Government officially defines “Deep Tech Start-ups”.
Key Facts:
- Start-up Type: Deep Tech Start-ups
- Definition: Enterprises that build solutions based on new scientific or engineering knowledge
- Characteristics: High technical uncertainty, long gestation periods, and intensive research and development (R&D)
- Notification: Defined and notified eligibility criteria through a DPIIT gazette notification
- Definition of Deep Tech Start-ups was issued by the Department for Promotion of Industry and Internal Trade (DPIIT)
- Deep tech includes nanotechnology, biotechnology, material sciences, quantum technologies, semiconductors, artificial intelligence, data sciences, robotics, 3D printing, etc
- 2026-02-07 [Schemes & Programs] — DPIIT Revises Startup Recognition Framework
The Department for Promotion of Industry and Internal Trade (DPIIT) has notified the revised startup recognition framework under the Startup India Action Plan. The Government of India(GoI) has increased the turnover threshold for startup recognition from Rs 100 crore to Rs 200 crore. The revised framework has introduced a new sub-category of 'Deep Tech Startup' for entities working on cutting-edge and emerging technologies.More details
UPSC Angle: DPIIT revised startup recognition framework under Startup India Action Plan.
Key Facts:
- Turnover threshold for startup recognition increased from Rs 100 crore to Rs 200 crore
- New sub-category: 'Deep Tech Startup'
- Eligibility Criteria for new sub-category: Considering the long gestation periods, high Research and Development (R&D) intensity and capital requirements of deep technology ventures
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