‘Deep Tech’ Start-ups

‘Deep Tech’ Start-ups

  • Context:

  • The Centre, through a gazette notification by the Department for Promotion of Industry and Internal Trade (DPIIT), has provided an official definition and eligibility criteria for what constitutes a "deep tech" start-up in India

  • Definition & Eligibility Criteria:

  • According to the notification, a deep tech start-up is defined by the following characteristics:

  • Primarily concerned with producing a solution based on new knowledge or advancements in a scientific or engineering discipline.

  • Must spend a significant portion of its funds on Research and Development (R&D).

  • It either owns or is in the process of creating significant novel Intellectual Property (IP) and taking steps to commercialize it.

  • Characterized by extended development timelines, long gestation periods, high capital and infrastructure requirements, and significant technical or scientific uncertainty.

  • Key Distinctions: Standard vs. Deep Tech Start-up:

  • The notification provides a relaxed threshold for deep tech firms compared to standard start-ups to account for their longer development cycles:

Feature

Standard Start-up

Deep Tech Start-up

Age Limit

Less than 10 years

Up to 20 years

Turnover Limit

Less than ₹200 crore

Up to ₹300 crore

  • Certification & Governance:

  • The DPIIT is the final authority to grant the certificate qualifying a company as a deep tech start-up.

  • The decision is based on guidance from an Inter-Ministerial Board of Certification, which includes:

  • Joint Secretary, DPIIT (Convener)

  • Representative from the Department of Science and Technology (DST)

  • Representative from the Department of Biotechnology (DBT)

  • Restrictions:

  • Investment Bans:

  • A defined start-up is prohibited from investing in activities not directly connected to its core mandate, such as real estate, speculative assets, or shares and securities (unless core to knowledge production)

  • Funding Support:

  • Deep tech start-ups are expected to benefit from the Anusandhan National Research Foundation (ANRF), which holds a ₹1 lakh crore Research and Development Innovation (RDI) Fund.

  • Companies may access financing at concessional rates (2%-4%) with tenures up to 15 years.