India’s startup ecosystem has undergone a quiet but decisive transformation over the past decade. In 2010, when Zerodha started, India had fewer than 1,000 recognised startups. Today, we have crossed 2.3 lakh. Indian entrepreneurs are no longer just service providers to the world. They’re solving problems that have traditionally required imports, building defensible intellectual property (IP) at home, and competing globally.
Not long ago, the Indian startup narrative was all about building software cheaper, supporting Western companies better, and optimising margins. Today’s ambition is significantly different. Founders are asking—what have we historically imported that we could own? What can we build in India that has not been attempted before?
In defence, startups are developing indigenous imaging systems previously unavailable domestically. In semiconductors, we’re designing chips, the capability we had outsourced in the past. In renewable energy, deep tech ventures are engineering battery storage and systems that compete with international alternatives. In manufacturing, precision-engineering startups are designing critical components.
Clearly, Indian startups are no longer building service layers. They’re identifying gaps in critical infrastructure and building defensible IP around them. This shift has been driven by four key developments.
Pillars of Transformation
The first is funding, which has evolved significantly in structure and intent. Government-backed support through Small Industries Development Bank of India, expanded from Rs 10,000 crore scheme to Rs 20,000 crore now, signals that private investors can bet on Indian deeptech without bearing all the downside alone. Alongside this, the Rs 1 lakh crore Research, Development & Innovation Fund (2025) tolerates the 15-20-year timelines required for semiconductor startups, advanced biotech, and materials science, unlike venture capital, which optimises for 7-10 year exits. The RDI Fund is structured as a mix of equity, low-cost debt, and grants, explicitly designed to support the long tail of research & development that venture capitalists naturally avoid.
The second is demand. Policy matters most when it creates demand, not just incentives. The Production Linked Incentive scheme, the request-for-quotation preference for Indian solutions in government procurement, and the mandate for defence platforms to integrate indigenous solutions are all important steps. For instance, a startup building a renewable energy management system knows the grid operators will deploy it. This changes the pitch, timeline, and capital path. Instead of hoping for adoption, founders know the addressable market is real.
The third is skilling. Capital and market signals create conditions for growth, but skilling ultimately determines the output. Indian companies are creating their own talent pipelines and building training programs. This works, but it’s expensive and inefficient.
The fourth is the university layer. Thousands of startups are now emerging from campus ecosystems where faculty, researchers, and students work together on real-world problems instead of only theoretical ideas. Universities are providing structured incubation platforms and also producing more patents. Research is increasingly moving out of labs and into practical use, with solutions being built in the campuses of India for challenges faced around the world.
20-Year Test
But while important, these developments only capture one side of the story. The next phase will test whether the momentum can translate into sustained capability at scale.
And this harder part of sustained capability isn’t behind us; it’s ahead. Over the next 20 years, India’s startup ecosystem will be tested on a few things—can we staff 500 active deeptech companies? Do we have the training infrastructure to produce the number of material scientists, semiconductor engineers, and advanced manufacturing technicians required? Do we have world-class labs to prove our products to global buyers, or do we remain dependent on foreign test facilities, pushing costs and timelines? Do we have the initial public offering market and strategic merger & acquisition depth to create wealth that can be reinvested?
India is also enabling several programmes through the ecosystem and government that act as platforms for startups in critical deep-tech sectors—such as semiconductors, space, and biotechnology. Programmes such as Bharat Innovates of the ministry of education that support deep-tech startups will be effective in shifting the narrative of Indian tech from standard software-as-a-service (SaaS) models to hard-engineered, IP-driven solutions. Through this the startups emerging from education institutes across the country are also supported.
This transition from digital India to a powerful deeptech India will represent a crucial maturity milestone, signalling to global venture capital and research consortia that we are ready to co-author the future of foundational technology.
As India attempts to move from startup scale to technological depth, initiatives that create space for industry, government, researchers, investors, and young innovators to engage with the harder questions around execution, capability-building, and long-term competitiveness will be essential.
Sustaining this progress will require action on three fronts. First, unblocking capital disbursement is imperative. The grants already exist, but they must be made to flow on time and at scale. Second, demand certitude must be created through publicly committed five-year roadmaps, where government procurement consistently prefers Indian deeptech.
This will allow founders to plan with confidence. Third, the middle layer—vocational skilling, industry apprenticeships, and supply chain development—must be built, as it matters far more at this stage than another round of startup incentives.
The next few years will show whether we can sustain the momentum or if it was a cyclical aberration. Should these conditions be met, we will see a different India in a decade.
This is where the next phase of India’s innovation system will be defined.