Govt includes deep tech startups in startup definition with higher limit on years and turnover

The government has expanded the scope of startup definition to include deep tech startups with a recognition period of up to 20 years and a turnover limit of Rs 300 crore.

In a gazette notification from the Department for Promotion of Industry and Internal Trade (DPIIT) said, “in the case of an entity recognised as a Deep Tech Startup under this notification, such entity shall cease to be a Deep Tech Startup on completion of twenty years from the date of its incorporation or registration, or if its turnover for any previous year exceeds three hundred crore rupees.”

This notification comes into immediate effect, but for the non-deep tech startup, the categorisation remains the same, i.e., for a period of 10 years anda turnover limit of Rs 200 crore.

The definition of deep tech, according to the government, is that it is working on producing a solution based on new knowledge/advancements within a scientific or engineering discipline or multiple disciplines, which is yet to be developed or is in the process of being developed. It has a high percentage of expenditure on research and development (R&D) activities as a percentage of revenue/funding. It owns or is in the process of creating significant novel intellectual property (IP) and taking steps to commercialise the same. It is facing extended development timelines, long gestation periods, high capital and infrastructure requirements, and carrying large technical or scientific uncertainty.

Commending the decision of the government, Artha Venture Fund Managing Partner Anirudh A Damani said it was a positive and timely step, acknowledging the reality of how these companies are built. “This change unlocks a meaningful pool of domestic capital and removes a structural bottleneck that many high‑quality companies were facing,” he remarked.

He further noted that several companies in their pipeline were held back simply because they fell outside earlier definitions, despite having strong technology depth and commercial traction. “This is a critical move toward building long‑cycle, globally competitive deep tech businesses from India.”

As of December 2025, bets in the deeptech sector have seen a marginal increase in funding compared to 2024, with capital flowing into early-stage startups in the segment. According to data from Tracxn, deeptech companies raised $1.57 billion across 265 deals year-to-date, compared to $1.24 billion raised in 2024 across 388 rounds—indicating that, while investors were more cautious this year, they wrote bigger cheques to deeptech startups.