The government has expanded the scope of the Startup India programme by formally recognising deep technology companies as a distinct category, while also easing eligibility norms for the broader startup ecosystem by raising the turnover threshold.
In a gazette notification, the Department for Promotion of Industry and Internal Trade (DPIIT) said the turnover limit for being recognised as a startup has been increased to Rs 200 crore from the earlier Rs 100 crore, with the age cap remaining unchanged at 10 years from the date of incorporation. In a significant policy shift, the notification also introduces a dedicated sub-category for deeptech startups, extending their recognition period to 20 years and raising the turnover ceiling to Rs 300 crore.
The notification takes effect immediately and supersedes the startup definition issued in February 2019. It marks the first time the government has formally defined what constitutes a deeptech startup, a segment that policymakers and investors say has been constrained by regulatory frameworks designed for faster-scaling, software-led ventures.
Why DeepTech Now Gets 20 Years
According to the notification, deeptech startups are entities developing solutions based on new scientific or engineering knowledge, demonstrating a high proportion of expenditure on research and development, and owning or building significant novel intellectual property with plans for commercialisation. The framework explicitly acknowledges that such businesses face higher capital requirements, longer gestation periods and greater technical or scientific uncertainty.
The broader startup definition remains intact. Eligible entities must be incorporated or registered in India as a private limited company, partnership firm, limited liability partnership or cooperative society, and be focused on innovation or a scalable business model with the potential for employment generation or wealth creation. Recognition will continue to be routed through the DPIIT portal.
Applicants are required to submit incorporation or registration documents along with a write-up describing their innovation or scalability. Deeptech startups will need to provide additional information to demonstrate compliance with the prescribed criteria, with DPIIT assessing applications based on frameworks and guidelines issued by the department.
The notification also lays out clear exit conditions. Regular startups will lose their recognised status after 10 years from incorporation or if their annual turnover exceeds Rs 200 crore in any financial year. Deeptech startups will cease to be recognised after 20 years or upon breaching the Rs 300 crore turnover threshold, whichever is earlier.
Recognised startups, including deeptech firms, may apply for income-tax exemptions under Section 80-IAC of the Income-tax Act, subject to certification by the inter-ministerial board. The government has retained the authority to revoke such certification if it is found to have been obtained through misrepresentation or false information. Despite the size of the ecosystem, only around 2% of DPIIT-recognised startups currently receive this tax benefit, industry advisors said.
Tightening the Reins
The revised framework also tightens restrictions on how funds can be deployed during the recognition period. Startups are barred from investing in residential real estate not used for operations, non-core land and buildings, loans and advances unrelated to the core business, capital contributions to other entities, shares and securities not linked to core operations, luxury assets and other speculative or non-productive activities. The Centre has reserved the right to relax or modify these conditions for specific classes of startups or individual cases.
Industry participants said the changes could help unlock capital for deeptech ventures, which have seen rising investor interest. “This change unlocks a meaningful pool of domestic capital and removes a structural bottleneck that many high-quality companies were facing,” said Anirudh A Damani, managing partner of Artha Venture Fund. “Several companies in our pipeline were held back simply because they fell outside earlier definitions, despite having strong technology depth and commercial traction.”
Venture funding into deeptech startups has grown steadily in recent years, with such companies raising about $1.2 billion in 2025, nearly 50% more than in 2024. “Inclusion of the deeptech category signals that India is prioritising a shift from technology adoption to technology innovation,” said Sandeepp Jhunjhunwala, M&A tax partner at Nangia Global Advisors.