What Happened
- The Department for Promotion of Industry and Internal Trade (DPIIT) issued a notification on 6 February 2026 replacing the 2019 startup recognition framework with a revised version that formally introduces a "Deep Tech Startup" category for the first time in India.
- The recognition period for deep tech startups has been extended to 20 years from incorporation, compared to 10 years for regular startups, acknowledging the longer gestation periods required for research-intensive ventures.
- The revenue threshold for deep tech startups has been raised to Rs 300 crore (approximately USD 33 million), while regular startups now have a revised ceiling of Rs 200 crore (up from Rs 100 crore under the 2019 framework).
- Deep tech is defined to include sectors such as artificial intelligence, biotechnology, quantum computing, semiconductors, space technology, and advanced materials.
- Deep tech applicants must submit additional documentation demonstrating they meet specific deep tech criteria related to R&D intensity and technological novelty.
Static Topic Bridges
Startup India Action Plan and DPIIT Recognition Framework
The Startup India Action Plan, launched on 16 January 2016, is the Government of India's flagship initiative to build a robust startup ecosystem. DPIIT, under the Ministry of Commerce and Industry, is the nodal department that recognises startups and administers the benefits under this scheme.
- DPIIT recognition grants startups access to several benefits: tax exemption under Section 80-IAC of the Income Tax Act (100% deduction on profits for any 3 consecutive years within a 10-year window), exemption from angel tax under Section 56(2)(viib), self-certification for compliance under labour and environmental laws, faster patent examination, and access to the Fund of Funds for Startups (managed by SIDBI).
- Under the original 2019 framework, a startup was defined as an entity incorporated for not more than 10 years with annual turnover not exceeding Rs 100 crore in any financial year, working towards innovation, improvement of products or processes, or a scalable business model.
- The 2026 notification is significant because it acknowledges for the first time that different types of startups have fundamentally different development timelines and capital requirements.
- Complete applications are now reviewed within 120 days under the revised evaluation framework.
Connection to this news: The new notification directly amends the DPIIT recognition framework to create a separate deep tech track with a 20-year window and Rs 300 crore revenue ceiling, ensuring that science-led ventures do not lose startup status while still in the pre-commercial stage.
Research, Development and Innovation (RDI) Fund
The RDI Scheme was approved by the Union Cabinet on 1 July 2025 and launched by the Prime Minister on 3 November 2025, with a total outlay of Rs 1 lakh crore (approximately USD 11.68 billion) over six years. It is administered through a Special Purpose Fund within the Anusandhan National Research Foundation (ANRF).
- ANRF is a statutory body created by the Anusandhan National Research Foundation Act, 2023, and notified on 5 February 2024. It serves as the apex organisation for catalysing research and innovation across academia, industry, and government.
- The RDI Fund operates through a two-tiered mechanism: the SPF within ANRF acts as custodian of the corpus, and Alternative Investment Funds (AIFs), Development Finance Institutions (DFIs), NBFCs, and Focused Research Organisations (FROs) can apply for RDI funding to invest in R&D-intensive companies and startups.
- Priority sectors include energy security and transition, climate action, quantum technologies, robotics, AI applications in agriculture, biotechnology, health, space, and the digital economy.
- The Fund provides long-term financing at low or nil interest rates, designed as "patient capital" for ventures with extended development horizons.
Connection to this news: The revised DPIIT framework and the RDI Fund together form a two-pronged strategy: regulatory recognition (extended timelines, higher revenue thresholds) combined with public capital deployment (Rs 1 lakh crore patient financing) to build India's deep tech ecosystem.
Deep Tech and India's Innovation Ecosystem
Deep tech refers to startups whose products or services are built on substantial scientific or engineering challenges, typically requiring extended R&D periods before commercialisation. The term encompasses ventures in areas like AI, quantum computing, semiconductors, advanced materials, biotechnology, and space technology.
- Deep tech startups differ from conventional tech startups in three key ways: they require significant upfront R&D investment (often years before any revenue), they depend on breakthrough scientific discoveries rather than business model innovation, and they have longer time-to-market cycles.
- India's deep tech ecosystem has been growing: the country has over 3,000 deep tech startups, with major clusters in Bengaluru, Hyderabad, and the NCR region.
- Globally, the EU launched its European Innovation Council (EIC) with a EUR 10 billion budget specifically for deep tech, while the US supports deep tech through agencies like DARPA, NSF, and the CHIPS and Science Act (2022).
- Under the earlier framework, deep tech companies often lost startup status while still pre-commercial, creating what industry observers called a "false failure signal" that judged science-led ventures on policy timelines rather than technological progress.
Connection to this news: By formally defining deep tech and extending recognition to 20 years, India aligns its startup policy with the reality that semiconductor fabs, biotech drug development, or quantum computing platforms cannot be commercialised within the same timeframe as a consumer app.
Key Facts & Data
- DPIIT notification date: 6 February 2026, replacing the 2019 framework
- Deep tech startup recognition period: 20 years (up from 10 years for regular startups)
- Deep tech revenue threshold: Rs 300 crore (approximately USD 33 million)
- Regular startup revenue threshold: Rs 200 crore (up from Rs 100 crore)
- Section 80-IAC benefit: 100% tax deduction on profits for 3 consecutive years within a 10-year window; startups must be incorporated between 1 April 2016 and 1 April 2030
- RDI Fund: Rs 1 lakh crore over 6 years, administered through ANRF
- ANRF established under the ANRF Act, 2023; notified 5 February 2024
- Deep tech sectors covered: AI, biotechnology, quantum computing, semiconductors, space technology, advanced materials
- India has over 3,000 deep tech startups
- Startup India Action Plan launched: 16 January 2016