India is preparing to make up to $25 billion available for investment in Deep Tech start-ups, as it seeks to reduce 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 (IVCA), told CNBC that India invested $11.6 billion in Deep Tech over the past decade.
He said the 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. A further $3 billion to $4 billion is expected, bringing total funds available to about $25 billion.
Deep Tech covers start-ups working in areas including artificial intelligence, semiconductors, advanced manufacturing, drones and space technology.
Geopolitics drives the push
Experts told CNBC the funding reflects growing government recognition that frontier technology is increasingly important amid rising geopolitical tensions.
The United States and China currently lead the global artificial intelligence race. Concerns over Chinese technology and US restrictions on technology exports have increased pressure on India to build domestic capabilities.
“Tariffs from the U.S. actually help this [Deep Tech] segment a lot,” said Anandamoy Roychowdhury, managing director of Crane Venture Partners.
He said India is likely to develop more local Deep Tech companies because access to important technology “can get cut off at any point.”
Those concerns were highlighted 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.
Rising start-ups and investor appetite
Fund managers at SuperReturn Asia said India’s Deep Tech sector remains nascent but could eventually produce global technology leaders, citing the quality of ideas and talent.
Shweta Rajpal Kohli, president and chief executive of Startup Policy Forum, said there has been a “dramatic acceleration of innovation,” with some companies moving from prototypes to “real commercialization.”
Earlier this year, Vibe-coding start-up Emergent, space technology company Skyroot and sovereign AI company Sarvam became unicorns after their valuations crossed $1 billion in fundraising rounds.
Roychowdhury described the opportunities in India as being like “a kid in a candy store.” He said about 80% of his $150 million Asia-Pacific fund is concentrated in India.
Funding gap remains
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 11 to 20 such companies.
The report said the sector attracted nearly $3 billion in 2025, its highest level ever, despite an overall decline in start-up funding in India. That remains far below the $136 billion raised by the sector in the United States.
A major challenge is access to enough domestic capital to scale businesses that typically need long development periods and heavy investment.
“Our challenge today in India is that only 2% of people are able to sign” checks above $10 million, Tandon said. He added that high-net-worth individuals and family offices need to increase their investments to support Deep Tech in India.
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