In a bold move to strengthen India’s position in the global deep tech landscape, Nasscom has proposed establishing a ₹10,000 crore Deep Tech Fund aimed at supporting early-stage startups seeking Series A and B investments. This initiative represents a significant step toward fostering innovation in critical technological domains and enhancing India’s competitive edge in the global market.
The proposed fund is strategically designed with a dual-focus approach, addressing both commercial viability and national strategic interests. This comprehensive framework aims to bridge the funding gap that often hinders deep tech startups from scaling their innovations effectively.
The primary segment of the fund targets high-growth markets, focusing on sectors such as electric vehicle batteries, space technology, biotechnology, and selected artificial intelligence companies. This approach aims to nurture globally competitive startups capable of competing with their counterparts in the United States and China. The emphasis is on equity-based funding rather than grants, ensuring market-driven growth and sustainability.
“The Deep Tech Fund represents a crucial step in building India’s technological sovereignty,” says Debjani Ghosh, President of Nasscom. “By focusing on both commercial and strategic sectors, we’re creating a robust ecosystem that can compete globally while addressing our nation’s specific needs.”
The second component of the fund is dedicated to developing critical technologies in strategic sectors such as defense, agricultural biotechnology, biosafety, quantum computing, and climate tech. This segment acknowledges the importance of supporting technologies that may have limited immediate commercial potential but are vital for national interests and long-term technological advancement.
For Tamil Nadu’s vibrant startup ecosystem, this initiative presents significant opportunities. The state, with its strong educational institutions and growing technology parks, is well-positioned to leverage this fund. Tamil Nadu’s established presence in sectors like manufacturing, agriculture, and information technology provides a fertile ground for deep tech innovations.
To enhance private sector participation, Nasscom has recommended a matching investment strategy, encouraging private capital investments in daughter funds. This approach aims to de-risk private investments while ensuring sustained funding support for promising startups.
The proposal also addresses operational challenges faced by IT companies in Special Economic Zones (SEZs). Nasscom suggests broadening the scope of the Re-investment Reserve under Section 10AA of the IT Act, acknowledging the asset-light nature of IT companies and their unique investment needs.
“This fund could be a game-changer for Tamil Nadu’s deep tech startups,” states Dr. Santhosh Kumar, Director of the Tamil Nadu Startup and Innovation Mission. “It aligns perfectly with our state’s vision of becoming a leading hub for technological innovation and entrepreneurship.”
The impact on Tamil Nadu’s startup ecosystem could be transformative. The state’s existing strengths in manufacturing, coupled with its growing software industry, create an ideal environment for deep tech innovations. Local startups working in areas like industrial automation, agricultural technology, and sustainable energy solutions stand to benefit significantly from this funding initiative.
This comprehensive funding approach, combining commercial viability with strategic national interests, positions India to make significant strides in the global deep tech arena while strengthening its technological capabilities across crucial sectors.
