The recently published Department for Promotion of Industry and Internal Trade (DPIIT) Deep Tech notification shows that the government wants to support innovation. Still, the framework has some real problems, both in concept and practice, that might actually hold back its own goals.
One major issue is how “Deep Tech Startup” is defined. The notification creates a special category for deep tech ventures and acknowledges their unique challenges, like long development times, high costs, and technical uncertainty. However, it still limits eligibility to private limited companies, LLPs, or cooperatives, just like regular startups. This means established companies, research institutions, or public sector organisations leading in deep tech are left out. For instance, a twenty-year-old pharmaceutical company working on a new cancer treatment or an experienced engineering firm developing advanced materials would not qualify, even though these are the kinds of innovation India needs.
The amount of required paperwork is another problem. Startups must use the DPIIT portal, fill out applications, and submit many documents to prove they meet vague standards like “novel intellectual property” and a “high percentage of R&D expenditure.” After that, they have to wait for approval from an Inter-Ministerial Board. For companies working in advanced areas like quantum computing or biotechnology, this process does not fit the government’s goal of encouraging innovation. The notification also says that deep tech status will be decided by future “framework, parameters, and guidelines as may be issued by the Department” which is standard bureaucratic language that means the rules are not yet defined.
The financial rules are also an issue. The notification increases the turnover limit for deep tech startups to three hundred crore rupees and the age limit to twenty years, showing some awareness that deep tech needs more time. Still, these limits seem arbitrary and do not reflect how deep tech really develops. For example, a breakthrough in fusion energy or semiconductors could take decades and require large investments before making any profit. It does not make sense for a company to lose its “deep tech” status just because it earns more revenue while still focusing on research and development. The restrictions on asset deployment are even more worrying. The notification bans investments in buildings, vehicles, or other assets unless they are “integral to core business operations.” But it is unclear who decides what counts as integral. For example, a biotech startup may need special buildings for safety, and an aerospace company might need aircraft for testing. In deep tech, what is normal business is often very different from what is normal in other fields.
The notification misses the bigger picture. Deep tech innovation often comes from collaboration between startups, established companies, universities, and research institutions. By offering benefits only to organisations set up as startups, the policy values company structure over actual innovation. For example, a skilled researcher at an IIT who invents a new battery technology gets no recognition under this system unless they start a company, even if their work is more valuable than that of many registered startups.
The government should be recognised for trying to set deep tech apart from regular startups. However, the way the policy is carried out shows that innovation is still seen mainly as an administrative process, not as something flexible and unpredictable. Deep tech needs flexibility, long-term planning, and acceptance of uncertainty, but the strict rules and bureaucracy in this notification limit those qualities.