Deep Tech Policy: India’s deeptech growth hinges on policy execution | Bengaluru News

BENGALURU: As India aims to establish itself as a leader in deep technology, several policy interventions have created a foundation for technological advancement. These include the India semiconductor mission, the national deep tech startup policy (NDTSP), and the allocation of Rs 10,000 crore through the Fund of Funds initiative.
However, there remains a significant gap between policy intent and execution, according to Pranav Pai, founding partner and chief investment officer of 3one4 Capital. In an interview with TOI, Pai acknowledged India’s progress in recognising deep tech as a national priority but emphasised that execution remains a major bottleneck.
Investors and entrepreneurs continue to grapple with regulatory hurdles, inconsistent implementation, and a lack of patient capital – factors that could determine whether India’s deep-tech ecosystem truly takes off or struggles to scale. “For the first time, our Prime Minister and finance minister are openly talking about deep tech, quantum computing, and AI in the national budget. That’s a massive pro-in novator shift. However, the execution of policy hasn’t caught up. Even if a deeptech fund of funds is announced, the execution mechanism will take time and startups may not have access to that capital immediately,” he said, discussing the excerpts of the Frontier Tech 2025 report launched on Wednesday.
Despite the govt’s substantial financial commitment, including a $10 billion stimulus package for semiconductor development, key industry stakeholders express doubts regarding the adequacy of these measures. “The true acceleration can happen when India’s largest corporations are convinced to invest in IP and deep tech based revenue streams. Policy can offer them real incentives such as lowered tax on profits from chip manufacturing for the next 10 years. That’s how other large economies have incentivised major industrial players to put billions into this space and match the national policy priorities. Otherwise, corporations will naturally focus on their existing, more profitable businesses,” he said.
However, funding challenges persist. While investment in AI, clean mobility, and biotech is growing, capital allocation for sectors like quantum computing, additive manufacturing, and strategic defence AI remains low. Pai believes this is due to a lack of targeted incentives. “We need more structured incentive programmes. Countries like the US have the Defense Advanced Research Projects Agency (DARPA) and a dozen other programmes that have pumped billions into research grants for decades. India will have to chart its own path on this front to help its innovators compete globally,” he added.
The deeptech ecosystem in India is evolving rapidly, but stakeholders agree that better execution of policy commitments, increased private-public collaboration, and targeted financial incentives are essential for sustained growth.