Interview/ Rajesh Nambiar, president, Nasscom
Q/ How would you rate India’s progress and position in deep tech right now?
A/ With 32,000 to 35,000 active tech startups, and more than 80 active unicorns, India is now the third-largest tech startup ecosystem globally. Of these startups, more than 4,000 are focused on deep tech as of 2024.
While tech startups have been addressing some of the most critical national imperatives, the rise of deep tech startups, particularly in areas like AI, blockchain and robotics, reflects the ecosystem’s maturity and ambition to lead in high-impact and high-tech domains.
We are also witnessing startups building solutions in novel areas such as energy (hydrogen, battery technology), AI (agentic AI, large language models and drug discovery), new-age computing (quantum, brain computing interface), cybersecurity, nanotech and biotechnology (genomics and proteomics).
Q/ What more needs to be done?
A/ The ecosystem faces complex challenges that need to be tackled. The rapid pace of innovation in Indian deep tech startups often outstrips existing regulatory frameworks. A lack of understanding among regulatory bodies can significantly limit the development of new solutions. It is crucial for the government to mitigate these regulatory risks by fostering regulatory certainty across all deep tech sectors.
Q/ Funding remains an issue.
A/ If we look at last year, around 20 per cent of new startup creation and 22 per cent of the total funding in Indian tech startup ecosystem in 2024 were directed towards deep tech ventures, reflecting increased confidence among investors. Deep tech funding in 2024 surged 78 per cent over 2023, as AI startups captured investor interest. Private capital in India is taking higher risks, and industries are partnering with deep tech startups to build transformative solutions.
However, it takes three to five years to build and raise capital for a deep tech startup. These startups therefore require investment sustained over extended time periods. The government’s help to provide pre-commercial funding support to Indian deep tech startups is critical.
This year’s budget reflected a clear intent from the government to boost the startup and innovation ecosystem. Key measures included the expansion of the Fund of Funds for Startups, the introduction of a dedicated deep tech-focused Fund of Funds, and the enhancement of the credit guarantee scheme. These initiatives are aimed at infusing much-needed capital into emerging businesses and supporting risk-taking in high-potential sectors.