India is preparing to invest $25 billion in deep tech startups as it seeks to strengthen its position in the global technology market and reduce its reliance on foreign technology.
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The funding would represent a significant increase from the $11.6 billion invested in the sector over the past decade. The initiative comes as India faces growing pressure to develop its own capabilities in artificial intelligence, semiconductors and other advanced technologies.
Where will the money come from?
The planned $25 billion investment will combine public and private funding.
According to Rajat Tandon, president of the Indian Venture and Alternative Capital Association, the government has committed $11 billion through the Research Development Infrastructure Fund. Venture capital and private equity fund managers are expected to match that amount, with an additional $3 billion to $4 billion potentially bringing the total to around $25 billion.
The funding is intended to support startups working on technologies such as:
- Artificial intelligence and advanced computing
- Semiconductors and chip development
- Advanced manufacturing
- Drones and aerospace technology
These industries require substantial investment and often take years to develop products that can be sold commercially.
Why is India investing so heavily in deep tech?
India’s plans are closely linked to growing concerns about access to foreign technology. The United States and China remain major players in advanced technology, but geopolitical tensions and export restrictions have made reliance on foreign suppliers more complicated.
India has to navigate both sides of this situation. Its relationship with China creates concerns about relying on Chinese technology, while US restrictions on advanced technology exports could limit access to American products. This has encouraged Indian policymakers and investors to focus on building domestic alternatives.
Anandamoy Roychowdhury, managing director of Crane Venture Partners, told CNBC that US tariffs could encourage the development of local deep tech companies, as businesses seek to reduce the risk of losing access to critical technologies.
India’s deep tech sector is gaining momentum
There are already signs of growing investor interest in the sector. India’s deep tech startups raised nearly $3 billion in 2025, their highest annual total on record, according to an industry report cited in the coverage.
Several Indian technology companies have also reached valuations of $1 billion or more, including AI startup Emergent, space technology company Skyroot and AI developer Sarvam. However, the funding gap between India and the United States remains substantial. US startups raised around $136 billion in 2025, compared with the much smaller sums available to Indian companies.
The challenge: turning investment into global technology companies
Even with more funding available, India’s deep tech ambitions face a significant obstacle: access to large amounts of long-term private capital. Deep tech companies often need years of research, testing and product development before they generate revenue. That makes sustained investment particularly important. Rajat Tandon has pointed to the limited number of Indian investors able to make investments exceeding $10 million as one of the sector’s key constraints.
The planned $25 billion funding pool could help address that gap, but the amount of money available will not, by itself, guarantee that Indian startups can compete with established technology companies in the US and China.
