India’s Commitment to Deeptech Startups
India’s startup ecosystem is gaining momentum, with a renewed focus on deeptech innovations. The government has recognized the vital role that startups play in the nation’s economic growth. Recent budget announcements by the Finance Minister (FM) highlight this commitment, particularly towards deeptech startups, which are increasingly becoming essential in the age of emerging technologies like artificial intelligence (AI).
Financial Support for Startups
In 2016, the Indian government allocated ₹10,000 crore to a fund-of-funds (FoF) aimed at supporting startups through venture capital. This initiative has proven successful, with a total of ₹91,000 crore reportedly deployed in startups with the help of this fund. In the latest budget, the FM announced an additional ₹10,000 crore for the FoF, which will include a dedicated fund for deeptech startups. This financial backing is crucial for fostering innovation and ensuring that Indian startups can thrive in a competitive global landscape.
The extension of the three-year tax holiday for startups is another significant move. Originally set to expire in March, the scheme now allows startups incorporated before March 2030 to benefit from this tax relief. Padmaja Ruparel, co-founder of the angel network IAN Group, emphasized that this extension reflects the government’s commitment to long-term growth and innovation. The additional funding and tax benefits signal a clear direction for the next wave of entrepreneurial success in India.
Advancements in Deeptech
The establishment of a dedicated deeptech fund within the FoF is expected to accelerate advancements in critical technologies such as AI, quantum computing, and semiconductor research. Prashanth Prakash, a founding partner at Accel, noted that this initiative aligns with India’s vision to lead the global innovation curve. The government’s commitment to deeptech is further underscored by the announcement of 10,000 fellowships under the PM Research Fellowship Scheme, aimed at supporting research at prestigious institutions like IITs and IISc.
Nasscom, the industry body for the IT sector, has also expressed optimism about the deeptech FoF. They believe it will enhance India’s leadership in frontier technologies. The government’s focus on deeptech is not just about funding; it is about creating an ecosystem that nurtures innovation and research. This approach will ensure that Indian startups can compete effectively on the international stage.
Building a Stronger Ecosystem
The budget also includes a ₹500 crore allocation for establishing a center of excellence in AI, specifically targeting the education sector. This initiative is a significant step towards integrating AI into educational frameworks, preparing the next generation for a tech-driven future. Chirag Gupta, founder of 8X Ventures, pointed out that many Indian deeptech startups currently seek funding overseas due to the limited size of domestic funds. The government’s FoF could bridge this gap, providing much-needed capital for growth.
Moreover, Nasscom highlighted additional measures in the budget aimed at advancing technology and enhancing skill development. The ₹20,000 crore allocation for private-sector-led research and development, along with plans to expand IIT capacities and establish 50,000 Atal Tinkering Labs in government schools, are crucial steps. These initiatives will strengthen India’s position as a global hub for deeptech innovation and enhance its competitive advantage as a digital talent nation.
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