Govt rolls out startup status for deeptechs, extends recognition to 20 yrs

The government has formally recognised deeptech startups, extending Startup India benefits to 20 years and raising the turnover limit to Rs 300 crore

The government has formally recognised deeptech startups under the Startup India programme, expanding eligibility by granting them double the recognition period of regular startups and a higher revenue threshold.

 

In a gazette notification dated February 4, the Department for Promotion of Industry and Internal Trade (DPIIT) said deeptech startups will be eligible for recognition for up to 20 years from incorporation, twice the duration available to regular startups.

 

Similarly, the annual turnover threshold for deeptech startups has been set at Rs 300 crore, compared with Rs 200 crore for regular startups.

 

This implies that deeptechs will lose startup status and associated benefits after 20 years or after breaching Rs 300 crore in annual turnover, whichever is earlier.

   

A deeptech startup has been defined as a firm that contributes a major portion of its expenditure to research and development (R&D) as a percentage of revenue or funding.

 

The government has defined such firms as those with long development cycles and gestation periods, higher capital and infrastructure requirements, and significant technical or scientific uncertainty.

 

The notification adds that these entities should be developing solutions based on new scientific or engineering knowledge and creating significant novel intellectual property with plans for commercialisation.

 

For example, deeptech startups include those operating in sectors such as artificial intelligence (AI) and related infrastructure, biotechnology, and climate tech, among others.

 

Lloyd Mathias, investor and independent director, said the DPIIT’s move to double the recognition window for deeptech entities to 20 years is a strong acknowledgement of the long gestation inherent in science-led innovation.

 

“This policy shift effectively de-risks the frontier tech sector, ensuring our innovators are supported throughout their journey from discovery to commercialisation,” he added.

 

The recognition of the sector in the context of startups indicates that companies can enjoy startup benefits for a longer period as they develop and commercialise such technologies.

 

“This reform reflects the economic reality of deep tech: most companies spend seven to eight years in intensive R&D and lab-scale validation, often losing their startup status just as they enter early commercialisation. It meaningfully improves access to growth capital, grants, and institutional participation at the critical transition from lab to market — strengthening India’s frontier technology ecosystem and its ability to build globally competitive deep-tech champions,” said Ajay Modi, investment director, Piper Serica VC Fund.

 

The notification may expand access to private capital on account of the reformed rules.

 

The shift could help draw investor capital into India at a time when global competition for deeptech is heating up.

 

“Family offices invest with multi-generation horizons, and this change finally allows that capital to participate meaningfully in deep tech without structural constraints. For us, this unlocks a wider set of high-quality companies that were previously outside the investible framework despite strong fundamentals,” said Anirudh A Damani, director, Artha India Ventures.