In a bold move to narrow the technology gap with the United States and China, the Indian government has pledged to make as much as $25 billion available for investments in deep-tech startups. The package brings together public financing, venture-capital commitments and private-equity contributions, creating what officials describe as a “national pool” for frontier industries such as artificial intelligence, semiconductor design, advanced manufacturing, drones and space technology.
The core of the initiative is the Research Development Infrastructure Fund through which the state will inject $11 billion. Venture-capital and private-equity firms have agreed to match that amount, while an additional $3-4 billion is expected from domestic and foreign investors. If all contributions materialise, the total capital earmarked for deep-tech will reach the announced $25 billion ceiling.
Funding blueprint: who contributes and how the money is allocated
India’s decade-long investment in deep-tech has already topped $11.6 billion according to industry leaders. The new scheme sharply scales that effort. The government’s $11 billion stake is funneled through the Research Development Infrastructure Fund, a vehicle designed to reduce bureaucratic friction and accelerate capital deployment. Venture-capital and private-equity managers are expected to mirror the public outlay, effectively doubling the pool before the optional $3-4 billion top-up is added.
Stakeholders from both sides of the table have highlighted the importance of targeting capital toward “long-gestation” projects that demand patient money. Unlike typical software businesses, deep-tech ventures often require years of R&D before a commercial product emerges, making the combined public-private approach especially critical.
Geopolitical pressures: why the fund matters now
Rising tensions on the global stage have turned technology into a strategic asset. Both the United States and China dominate the AI and semiconductor arenas, and India finds itself reliant on imported tools and platforms. Recent U.S. export controls—exemplified by Anthropic’s decision to block its latest AI models for foreign users—have underscored the vulnerability of depending on foreign “frontier” tech.
Furthermore, American tariffs on certain high-tech components have inadvertently nudged capital toward Indian innovators. As Anandamoy Roychowdhury, managing director of Crane Venture Partners, puts it, “tariffs from the U.S. actually help this segment a lot.” The government’s funding push is therefore framed as a defensive measure, ensuring that critical technologies can be sourced domestically should external supply chains be disrupted.
Ecosystem readiness: unicorns, venture enthusiasm and remaining hurdles
Although still in a nascent stage, India’s deep-tech landscape has already produced three unicorns this year: the vibro-coding startup Emergent, the space-launch firm Skyroot and the sovereign AI platform Sarvam. Their valuations breached the $1 billion mark in recent fundraising rounds, signalling investor confidence in the sector’s commercial potential.
At the SuperReturn Asia conference, fund managers described the scene as “a kid in a candy store,” reflecting the abundance of promising projects. Crane Venture Partners, for instance, has allocated roughly 80 % of its $150 million Asia-Pacific fund to Indian deep-tech opportunities. An August report from the Indian Venture Capital Association (IVCA) showed that nine out of ten surveyed funds are already active in the space, with 37 % holding stakes in 11-20 deep-tech companies each.
Nevertheless, a stark funding gap remains when compared with the United States, where deep-tech firms raised about $136 billion in the same period. In India, only a small fraction of investors—estimated at 2 %—are comfortable writing checks above $10 million, limiting the scale-up capacity of home-grown ventures. Industry insiders call for greater participation from high-net-worth individuals and family offices to bridge this capital shortfall.
