India’s Startup Landscape Seeks to Close Innovation Gap with China.

In 1957, the Soviet Union launched Sputnik into orbit, the world’s first artificial satellite. This bold move sent shockwaves through the United States and spurred immediate action. President Dwight D. Eisenhower urged American industry and academia to gear up for “the stern demands” of an era marked by profound scientific exploration. While much has evolved since that historic moment, the echoes of the past continue to resonate today.

In an era advancing towards reusable rockets, generative AI, humanoid robots, fusion technology, and flying taxis, nations are measuring their strength in deep scientific and technological innovations. Commerce Minister Piyush Goyal’s recent remarks on the shortage of deep-tech startups should be viewed through this lens. It is a call for action, tough love akin to Eisenhower’s rallying cry.

Deep tech is more than just a buzzword- it stems from groundbreaking scientific and technological advancements. It serves as the foundation for transformative industries, enabling feats like a rocket booster being captured mid-air by mechanical chopsticks, a chatbot capable of generating code, poetry, and full business proposals, or a revolutionary drug that addresses conditions ranging from obesity to depression.

This field is currently dominated by the US and China. According to a recent analysis by the World Intellectual Property Organisation, China filed over 38,000 generative AI patents between 2014 and 2023, six times more than the US. A study by the Australian Strategic Policy Institute (ASPI) further reveals that China holds a global lead in 57 out of 64 critical technologies.

 The US, the UK, Germany, and Japan allocate over 3% of their GDP annually to R&D, while China invests around 2.68% and India lags at less than 1%. However, it's not all bleak; deep tech advancements are long-term endeavors, and India is now making strides, albeit later than others.

 Audacious entrepreneurs are pushing the boundaries of innovation across diverse sectors—building space launch vehicles (Skyroot, Agnikul), flying taxis (Sarla, ePlane, Blu-J), robotics (Addverb, CynLR, Perceptyne), satellites (Pixxel, Dhruva Space, Digantara), gene editing solutions (CrisprBits), semiconductors (Mindgrove), quantum technologies (Qnu Labs), defence solutions (ideaForge, EyeRov), and electric mobility innovations (Ola, Ather, Ultraviolette). These bold ventures have the potential to reshape history. Skyroot’s landmark Vikram-S rocket launch in 2022 marked the dawn of private space launches in India. A similar transformation is underway in defense technology, electric mobility, and urban transportation.

 Deep tech innovations, including Generative AI, have the potential to contribute $1 trillion to India’s GDP by FY30. Former NITI Aayog CEO Amitabh Kant emphasized that the cascading impact of these technologies will be crucial in India's journey toward becoming a developed economy. However, deep tech is more than just an economic catalyst, which is essential for self-reliance. Strengthening the ability to develop and harness these innovations serves as a technological shield against geopolitical uncertainties and supply chain disruptions.

 India faces several challenges that need to be addressed. Building complex projects takes time, often exceeding the timelines set by venture capital, leading to a "long gestation conundrum." Additionally, there is a talent paradox, as only a small percentage of engineers specialize in frontier technologies. However, these challenges are not insurmountable.

 The US is spearheading a $500-billion AI initiative called Stargate, while France is channeling $112 billion in public and private investments into AI development. China has introduced a $138-billion fund to accelerate growth in emerging technologies. India, too, is making strategic and foundational advances. The India Semiconductor Mission (2021) earmarked Rs 76,000 crore to enhance fab capacity and design ecosystems. In 2024, the Union Cabinet approved the IndiaAI Mission with a Rs 10,371-crore allocation to build a robust AI ecosystem. Additionally, the recently announced Rs 10,000-crore Deep Tech Fund of Funds and the Rs 1,000-crore space-tech venture capital fund aim to bridge funding gaps and drive innovation. These initiatives underscore India’s commitment to long-term leadership in advanced technology, signaling strong support for private investment.

India has implemented significant policy reforms across various high-tech sectors to foster innovation, enhance private-sector involvement, and promote entrepreneurship and self-reliance. Key initiatives include the Indian Space Policy 2023, the liberalized Drone Rules 2024, the Draft National Deep Tech Startup Policy (NDTSP) 2023, and the Nuclear Energy Expansion Policy 2024. Strengthening collaboration between premier universities, research institutions, and deep-tech startups is essential. Additionally, educational reforms should prioritize establishing a framework for advanced research.

The NDTSP’s emphasis on advancing STEM education and expanding training opportunities is a promising step. India could also draw inspiration from U.S. federal institutions like the Defence Advanced Research Projects Agency (DARPA) and NASA, which have fostered groundbreaking innovations. Additionally, expediting the patent approval process could provide a much-needed boost.

 India’s deep-tech programme should not be viewed as a zero-sum choice. Innovations in quick commerce and consumer technology have fostered a culture of risk-taking and efficiency, shaping the broader business landscape while generating ancillary businesses and employment opportunities. With over 65% of the population under 35, these sectors play a crucial role in ensuring economic and social stability.

Our prosperity hinges on our capability to deliver both groceries to doorsteps and satellites to space. The call for India’s deep-tech revolution has been sounded- now is the time to rise to it.