Centre defines eligibility criteria for deep tech start-ups
Background
“Deep tech” had remained a buzzword without an official definition in India.
The Department for Promotion of Industry and Internal Trade (DPIIT) has now notified a formal definition and eligibility framework through a gazette notification.
This is significant given the Centre’s push for technology-led growth and R&D-based innovation.
What is a deep tech start-up?
A deep tech start-up is one that:
Develops solutions based on new knowledge or advancements in:
Science, or
Engineering disciplines
Is research-intensive rather than market- or platform-driven.
Key eligibility conditions
A deep tech start-up must:
R&D focus
Spend the majority of its expenditure on Research and Development.
Intellectual Property
Owns or is in the process of creating significant and novel IP.
Actively working towards commercialisation of such IP.
High-risk profile
Long gestation and development timelines.
High capital and infrastructure requirements.
Significant technical or scientific uncertainty.
Start-up vs deep tech start-up:
Criteria | Normal Start-up | Deep Tech Start-up |
Maximum age | 10 years | 20 years |
Turnover cap | ₹200 crore | ₹300 crore |
Nature | Market/business-driven | Knowledge & R&D-driven |
Certification and authority
To be recognised, a deep tech firm must apply to DPIIT for certification.
DPIIT is the final authority.
Advisory mechanism
DPIIT takes guidance from an Inter-Ministerial Board of Certification, comprising:
Joint Secretary, DPIIT (Convener)
Representative from Department of Science and Technology
Representative from Department of Biotechnology
Investment restrictions
Recognised start-ups cannot invest in:
Real estate
Speculative assets
Shares and securities
Exception: if such investments are directly linked to knowledge creation or core mandate.
Policy relevance and funding ecosystem
Definitions matter due to:
Government focus on emerging technologies
Channelisation of public R&D funds
RDI Fund
Anusandhan National Research Foundation
Custodian of ₹1 lakh crore Research and Development Innovation (RDI) Fund
Funding period: 7 years
Deep tech start-ups are expected to be major beneficiaries.
Concessional financing
RDI-backed companies may get loans at:
2%–4% interest
Tenure up to 15 years
Pending policy development
A Deep Tech Policy was prepared by the Principal Scientific Adviser’s Office in July 2023.
Still awaiting Union Cabinet approval.
Prelims Practice MCQs
Q. With reference to “deep tech start-ups” as defined by the Government of India, consider the following statements:
They must be primarily based on new scientific or engineering knowledge.
They are allowed to invest freely in real estate and financial securities.
They can retain start-up status for a longer period than ordinary start-ups.
Which of the statements given above are correct?
A. 1 and 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 1, 2 and 3
Correct answer: B
Explanation:
Statement 1: Correct – core definition.
Statement 2: Incorrect – such investments are prohibited unless core-related.
Statement 3: Correct – up to 20 years vs 10 years.
Q. The Inter-Ministerial Board that guides DPIIT in certifying deep tech start-ups includes representatives from:
Department of Science and Technology
Department of Biotechnology
NITI Aayog
Ministry of Electronics and IT
Select the correct answer using the code below:
A. 1 and 2 only
B. 1, 2 and 3 only
C. 2 and 4 only
D. 1, 2, 3 and 4
Correct answer: A
Explanation:
Only DST and DBT are explicitly mentioned in the notification.