Commerce and industry minister Piyush Goyal had criticised Indian startups recently for leaning too heavily on low-hanging fruits like consumer technology rather than taking strides in the more challenging domain of deeptech. While his comments sparked a broader debate about the country’s innovation strategy, founders and investors maintain that the problem lies as much in the structure of the ecosystem as in the startups’ ambitions.
Deeptech, which spans sectors like space, semiconductors, biotech, and advanced AI, is inherently complex and slow-moving. It requires years of intensive research and long gestation periods before products are market-ready. The Indian startup ecosystem, which is still largely shaped by the quick returns of consumer tech, has yet to develop the depth of patient capital and institutional R&D support needed to foster such innovation.
For instance, funding for deeptech startups in India was just about one-fifth of what flowed into consumer tech ventures in 2024, according to industry estimates. This disparity underscores the risk-averse nature of most Indian investors, who prefer ventures with predictable outcomes and proven market demand.
“The very nature of deeptech is complex. While it seems exciting to learn about, it is often considered obscure and difficult to grasp,” said Suyash Singh, co-founder and CEO of space-tech firm GalaxEye. He pointed out that consumer tech benefits from greater visibility and investor familiarity, making fundraising much easier.
Ashish Taneja, founding partner and CEO at growX Ventures, added that investor confidence in consumer tech stems from existing playbooks and abundant data. “Fundraising is more complex for deeptech startups. The longer gestation periods and technical depth make it harder to underwrite,” he said.
One of the biggest hurdles is the shortage of patient capital. “Deeptech startups need to be evaluated over a 5-10-year horizon, which is at least double of what is usually expected from consumer-facing ventures,” said Shashwath TR, co-founder and CEO of Mindgrove Technologies, a semiconductor design startup.
India’s relatively modest historical investment in research and development, compared to countries like China and the US, has further compounded the issue. “We haven’t invested in foundational research at the scale needed,” said Rahul Bajaj, founder of health-tech startup Darwin. “That puts Indian deeptech entrepreneurs in a reactive mode, trying to catch up with global trends instead of leading them,” he said.
Bajaj explained that investors typically want to see a clearly defined market opportunity, but that often doesn’t exist during the early stages of deeptech innovation. “If you are working at the beginning of the technology curve, the market is still forming. And by the time the product is ready, others may have already taken the lead, just like what’s happening with large language models,” he said.
Despite the challenges, there are green shoots. Indian startups like Pixxel, Bellatrix, and Cynlr are beginning to show successful commercialisation of deeptech products. Taneja noted that investor sentiment is evolving, driven in part by the wider application of technologies like large language models (LLMs). “The playbook that exists for SaaS or D2C is now being written for deeptech. That’s an exciting shift in India’s innovation journey,” he said.
Still, challenges around talent and long-term R&D focus persist. Founders agree that while the headwinds are real, the momentum is slowly shifting. What’s needed now, they say, is sustained support, both financial and institutional, to ensure India doesn’t just play catch-up in deep-tech, but leads the next technological wave.