What’s powering the next generation of deep tech startups in India

India’s deep tech ecosystem is entering a defining moment. Fuelled by a new breed of entrepreneurs, progressive policy interventions, and growing investor confidence, the country is poised to lead on some of the most complex technological frontiers. With a robust talent pool, cost efficiencies, and a growing domestic market, India is now drawing international attention as a serious player in deep tech.

The momentum is real—and measurable. In just the first four months of 2025, Indian deep tech startups attracted $324 million in investments as per the recent Venture Intelligence report—more than double the $156 million raised during the same period last year. These ventures span critical domains like semiconductors, AI, quantum computing, defence, and space, showcasing the growing ambition to solve not just local but global challenges.

India’s domestic Electronics System Design and Manufacturing (ESDM) market is also projected to grow from around to nearly $500 billion by 2030, according to industry reports, amplifying opportunities for startups and investors alike. This expansion is helping create a transformation in how Startups and investors collaborate to shape new technology paradigms in India.

The Deep Tech Dilemma: Scaling from Scratch

However, translating ideas into real-world products—especially in hardware—remains a complex journey. Deep-tech startups typically take one to three years to progress from conceptualisation to production, but Indian startups often encounter additional constraints that can further extend this timeline.

Among the most pressing hurdles is access to mentorship, advanced labs, and specialized tools, all of which are vital in fields like IoT and industrial automation. Regulatory navigation is another bottleneck. In sectors such as healthcare, EVs, and smart energy, startups often lack in-house expertise to meet compliance demands—causing delays at critical stages.

Compounding this is the challenge of storytelling. Deep tech is inherently complex, making it hard for startups to articulate value to investors and customers alike. However, this is beginning to change with new age startups using pilot projects and live prototypes to build credibility, rekindling investor confidence and bridging the very communication gap that once slowed them down.

Building a Launchpad: Policy, Partners, and Production

What’s changing the game is the ecosystem support beginning to take shape. Government programs like the Production Linked Incentive (PLI) scheme, the Design Linked Incentive (DLI) scheme are and the India Semiconductor Mission are creating a foundation for scale. At the heart of this momentum is a focused commitment to frontier technologies—from AI and semiconductors to quantum computing and biotechnology.

Significantly, a portion of the ₹10,000 crore Fund of funds has been earmarked specifically for these verticals. Recent approvals for semiconductor fabrication plants in Gujarat, Odisha, Assam, Andhra Pradesh, and Punjab and deepening ties with global tech leaders is a signal that India’s semiconductor journey is no longer aspirational, but operational.

Shortcutting the Cycle: Standardized Innovation
To further reduce time-to-market, many chipmakers and module providers now offer pre-certified, production-ready platforms. These hardware accelerators are reshaping how startups build—shifting their effort from building basic infrastructure to creating differentiated innovation.

Take software-defined radios (SDRs), for example. Equipped with built-in wireless and security features, SDRs allow teams to test and scale across multiple communication protocols—all on a single platform. This kind of modular adaptability is a game-changer for startups navigating varied regulatory landscapes or evolving international standards.

Building India’s Digital Infrastructure

India’s deep tech ventures are no longer experimenting but are rapidly moving from prototype to product. Supported by a strong investor ecosystem and a new generation of entrepreneurs, these startups are transforming core sectors like mobility, energy, and healthcare.
The EV boom has sparked innovation in charging networks, telematics, and battery analytics. At the same time, India’s energy grid is undergoing a digital transformation—with millions of smart meters rolled out under IoT-led smart energy initiatives.

Healthcare, too, is seeing deep tech’s transformative power. According to the EY Parthenon
Report,  63–79% of Indian MedTech innovations now rely on digital or IoT components, with startups building portable diagnostics, remote monitoring devices, and AI-driven telemedicine platforms—all aimed at improving access and affordability.

What makes this shift possible is the growing alignment between startups and investors. Once seen as a risky bet, deep tech ventures are now earning confidence by proving scalability and solving real infrastructure gaps. This has transformed investor perception—from viewing India as a cost-centric hub to recognising it as a value-driven innovation economy.

What Lies Ahead

Projected to grow from $150 billion today to $500 billion by 2030, the Electronics System Design and Manufacturing (ESDM) market is backed by schemes like PLI and DLI, which are playing a pivotal role in this expansion—accelerating product development, strengthening supply chains, and reducing import dependency.

With the right ecosystem enablers, India’s journey from prototype to product will not just drive Atmanirbhar Bharat, it will define a new era of homegrown technological leadership for the world.
This convergence will define a new era of homegrown technological leadership, setting the stage for a future where deep tech startups are instrumental in powering sustainable growth, security, and innovation on the world stage.

Hitesh Garg

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Hitesh Garg is Vice President and India MD, NXP Semiconductors