Strengthening India’s Deep Tech Ecosystem: Insights from Minister Piyush Goyal’s Recent Roundtable

The Context

In a significant move to bolster India’s innovation landscape, Commerce and Industry Minister Piyush Goyal recently engaged with a diverse group of over 35 deep tech and semiconductor startups, along with representatives from more than 30 prominent venture capital firms. This roundtable discussion, held in Bengaluru, aimed to address various strategies for enhancing India’s deep tech ecosystem, a sector pivotal for the nation’s technological self-reliance and economic growth.

Government Commitment to Innovation

Minister Goyal reiterated the Indian government’s unwavering commitment to fostering a supportive environment for innovation and entrepreneurship. The minister emphasized that the government aims to enhance the ease of doing business while reducing compliance burdens. This is especially crucial for startups that thrive on agility and the ability to pivot quickly in response to market changes.

Key Issues Addressed

During the discussions, several pressing challenges faced by deep tech startups were highlighted. A central theme was the extension of Startup India recognition benefits for deep tech ventures beyond the current ten-year limit. This extension is pivotal as it provides startups with vital support in their formative years, allowing them to focus on innovation without the looming pressure of compliance.

Clarity around funding regulations was another major concern. Startups called for improved transparency regarding grant accounting and the application of the Foreign Contribution Regulation Act (FCRA), particularly for research and development (R&D) funding. These steps are essential to encourage private investment in innovation, ensuring that funds can flow freely to promising startups.

Flexibility in Regulations

Participants emphasized a crucial need for flexibility in funding regulations, especially regarding the registration norms under the Department of Scientific & Industrial Research (DSIR). The current structure often hampers early-stage deep tech startups from accessing R&D-related benefits. Modifying these regulations could empower startups to kickstart their innovations faster and more efficiently.

To ensure continued progress, a follow-up mechanism will be established. This will be instrumental in reviewing actionable recommendations over time, ensuring that discussions evolve into concrete support for long-term innovation initiatives.

The Call for Domestic Capital

In the spirit of making India more self-reliant, Goyal stressed the necessity of scaling up domestic capital. He urged for the nurturing of homegrown venture funds, which can play a vital role in the growth of startups. By developing frontier technologies within India, these startups can significantly contribute to the Aatmanirbhar Bharat initiative.

Focus Areas for Startups

The interaction covered a variety of sectors within the deep tech class, such as semiconductor design, artificial intelligence, quantum computing, robotics, advanced materials, and machine learning infrastructure. Each of these areas holds significant transformative potential, both for India and for the global market.

Diverse startups including Agnit Semiconductors, QpiAI, Nabhdrishti Aerospace, EtherealX, Fabheads, and Dozee showcased their innovations, discussing the unique challenges they face, such as long development cycles, access to patient capital, and the complexities of technology commercialization.

Investor Perspectives

The discussions also featured insights from key investors associated with leading funds like Celesta Capital, Blume Ventures, Avaana Capital, Peak XV, Creagis, and 3one4 Capital. These investors shared their commitment to supporting long-term deep tech innovation while focusing on developing sustainable exit pathways and exploring co-investment opportunities. This dialogue is crucial as it aligns investors’ interests with the needs of startups, creating a synergistic environment conducive to growth and innovation.

---

Through these dialogues, the Indian government and the startup ecosystem are stepping closer to building a robust infrastructure that supports deep tech innovation. The commitment from both sides indicates a promising future for India’s position in the global tech landscape.