India’s start-up ecosystem faces a unique set of challenges when it comes to fostering deep tech innovation. A recent study commissioned by the Office of the Principal Scientific Advisor reveals that only about 25% of public-funded research and development organizations in India provide incubation support to start-ups. Even fewer, just one in six, support deep tech start-ups specifically.
The study, executed by the Confederation of Indian Industry (CII) and the Centre for Technology, Innovation, and Economic Research, surveyed labs on 62 parameters. These included R&D expenditure, the number of young scientists, patents filed, technologies developed, and the participation of women scientists. The focus was on organizations affiliated with the Council of Scientific and Industrial Research (CSIR), Department of Science and Technology (DST), and the Ministry of Electronics and Information Technology, among others.
Central government expenditure on R&D was approximately ₹55,685 crore for the 2020-21 fiscal year. When excluding strategic departments like DRDO, DAE, and DoS, the spending by key scientific agencies and other Central government departments was ₹24,587 crore. Dr.
Ajay Sood, Principal Scientific Adviser, expressed hope that the study data would prompt institutions to identify areas for improvement. “It’s a positive indicator that more researchers are transitioning from scientific inquiry to innovation.
Deep tech funding strategies in India
Academia and product innovation must go hand-in-hand,” he said. The report recommends that labs should review and align their mandates with the government’s Viksit Bharat goals. This involves focusing on critical technologies and working closely with industry and other public-funded R&D organizations.
Despite these challenges, some deep tech startups in India are making progress through innovative funding strategies. Bugworks Research, a biotech startup developing first-in-class antibiotics, relies on a mix of global health grants and specialized VCs with patient capital. Electric two-wheeler manufacturers and underwater robotics companies have also found success through hybrid funding models.
The Indian government has signaled support for deep tech innovation through policies like the National Deep Tech Startup Policy of 2023. However, industry advocates argue for more substantial support, such as government investments in labs, testing facilities, and prototyping spaces. Manish Singhal, founder of pi Ventures, emphasizes the need for hybrid capital structures to sustain deep tech innovation.
Arvind Lakshmikumar of Tonbo Imaging and Tanuj Jhunjhunwala of Planys Technologies also highlight the need for government co-investment, support in high-risk R&D, and real-world validation environments. In conclusion, building a robust ecosystem for deep tech innovation in India requires coordinated efforts across government, industry, and academia. Overcoming infrastructural and funding challenges, enabling real-world testing, and cultivating a culture of multidisciplinary collaboration are key to unlocking India’s potential in this space.
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