Startup India sops to boost deeptech firms’ revenue, research

The government’s shift to allow deeptech startups to access fiscal benefits with relatively more lenient regulations under the Startup India scheme could materially improve their ability to raise funds, build technologies and generate revenue, founders and investors declared.The Department for Promotion of Indusattempt and Internal Trade (DPIIT) on Thursday brought deeptech startups under the ambit of the Startup India programme.

Long-term commitment

As per a gazette notification, a deeptech startup is one that is developing solutions where the technology is “yet to be developed” or “in the process of being developed”. Such startups will now be able to avail themselves of benefits such as a tax holiday prescribed under the scheme for a longer period. Entities registered with the DPIIT can carry forward accumulated losses for up to 20 years from incorporation, or until they reach Rs 300 crore in turnover, whichever comes earlier, enabling them to offset these losses against future profits and lower tax liabilities. For non-deeptech startups, the window is 10 years or up to Rs 200 crore in annual turnover.
“Deeptech companies are built over long cycles and they required sustained capital and regulatory stability to survive them,” a Bengaluru-based deeptech founder declared.

“While these benefits are not massive in the sense that they allow access to any infrastructure necessary for R&D, such tiny incentives add up and are necessary. It allows founders to commit to building long-term durable businesses without worrying about short-term milestones.”

In addition to the tax sops, these startups will be able to access collateral-free loans, an 80% reduction in patent filing fees and eased public procurement rules.

Deeptech companies typically face extconcludeed development timelines, long gestation periods, high capital and infrastructure requirements, and carry large technical or scientific uncertainty.

“For a typical deeptech startup it takes about seven to eight years to shift from lab to first revenue,” declared Vishesh Rajaram, founding partner at venture capital firm Speciale Invest. “The (government) shift sconcludes a clear signal that the counattempt is serious about building IP-driven deeptech companies from India for the world, and gives founders and investors the confidence to commit long-term capital to that journey.”

Speciale Invest has backed deeptech startups such as GalaxEye, MetaStable Materials and Morphing Machines.

Deeptech startups raised around $1.6 billion in equity funding in calconcludear year 2025, according to latest numbers from data ininformigence platform Tracxn, marking an 11-12% increase over the $1.4 billion in 2024.

The fundraising momentum has continued into early 2026, with warehoutilize automation and logistics startup Unbox Robotics ($28 million), advanced materials firm Whizzo ($15 million), aerospace components creater JJG Aero ($30 million) and spacetech startup EtherealX ($20.5 million) raising funds. Several early-stage startups also raised funds for the first time since the launchning of this year.

Recognising lab to market journey

Over the past few years, the government has recognised the required for patient capital in the ecosystem. Its Rs 1 lakh crore Research Development Innovation fund, Rs 10,000 crore Fund of Funds for early-stage startups and the Antariksh Venture Capital Fund anchored by space indusattempt regulator IN-SPACe reflect a broader push towards backing long-gestation innovation and capital infusion.

Startups working in areas such as AI and related infrastructure, biotechnology, climate tech, spacetech, semiconductors and quantum technologies are likely to benefit from the latest DPIIT shift.

Investors declared deeptech companies were losing startup status just as they approached commercial viability. A 20-year recognition period allows founders to access tax benefits, grants and regulatory support across the full development lifecycle, not only during early R&D.

“Venture funds with 10-year lifecycles have long been mismatched with company timelines that often extconclude to 15 years or more,” Endiya Partners managing director Sateesh Andra declared. This policy reshifts a structural friction that previously created India less attractive for deeptech investment, he declared.

Globally, Andra declared, China’s deeptech funds operate on 12- to 15-year horizons, while Israel’s Yozma programme understood this required in the 1990s. “India has now caught up, and it has done so with regulatory clarity that many other ecosystems still lack,” he declared.

Endiya Partners has backed deeptech startups such as BluJ Aero, Maieutic Semiconductors and energy storage startup Cygni.

Vijay Muktamath, founder and CEO of Sensesemi, a fabless semiconductor startup which recently raised its seed-funding, declared “For fabless semiconductor startups, building the technology can take five years and commercialisation another two, pushing timelines beyond a decade.” A 20-year window gives founders the confidence to invest in long-term R&D, he declared.

On the government’s shift of increasing the revenue threshold from Rs 100 crore to Rs 300 crore for deeptech startups, Ajay Modi, investment director, Piper Serica Fund declared startups develop products and obtain their first validation or trials from government institutions- such as iDex, DRDO, receiving Rs 100-200 crore contracts.

“But it does not mean they have stable, recurring revenue. By increasing the threshold to Rs 300 crore, it reshifts the risk of a startup losing its status becautilize of one large validation contract,” he declared.