India's next big leap: A deeptech revolution for Bharat

So far in its independent history, India has seen several transformative reforms that reshaped our economy and society. Three such ‘revolutions’ stand out.

The first was the Green Revolution in the 1960s and the 1970s, which enabled India to move from food shortages and dependence on imports to becoming one of the world’s largest food grain producers. Then came the White Revolution, or Operation Flood, which transformed India from a milk-deficient nation into the world’s largest milk producer.

Arguably the most transformative reform of all was the 1991 liberalisation budget, which opened up the Indian economy, loosened State controls, fostered a thriving private sector and middle class, unshackled the spirit of entrepreneurship, and laid the foundation for India’s rise as a global economic force.

As India approaches its 80th year of independence, we believe the time has come for another game-changing set of reforms – this time, in frontier technologies, more commonly known as deeptech.

‘Deeptech’ includes a wide array of emerging technologies such as artificial intelligence, nanotechnology, robotics, semiconductors, drone technology and more.

India’s already existing talent pool, startups willing to take risks, and a stable policy environment provided by some states and the Centre, have ensured that the country is poised to compete actively in the next wave of global tech disruption, guiding its economic trajectory with new tailwinds and indigenous strengths.

While India has made remarkable progress in building startup infrastructure and generating unicorns, the path to becoming a global superpower by 2035 requires a fundamental transformation from fragmented initiatives to systemic capacity-building across multiple dimensions. The deeptech revolution could completely transform the way Indians live.

‘Mission-Mode’ Collaboration

As per a recent report by venture capital firm 3One4 Capital, the world’s fifth-largest (soon to be fourth-largest) economy stands at the convergence of two transformative waves. The first wave, fuelled by increasing urbanisation, the rise of the middle class, deepening smartphone and internet penetration, and the development of digital public infrastructure, has established the country as a top-three digital power globally.

The report states that the second wave is characterised by first-principles technology development, supported by intelligent government policies, increased private and public investments, and the rise of frontier tech innovation hubs, propelling the growth of Indian deeptech.

To ensure that deeptech R&D and use-case deployment picks up pace across sectors – from health, education and welfare to agriculture, infrastructure, services, banking and high- and low-tech manufacturing – India’s policymakers and the private sector need to collaborate on a mission mode basis. India needs to substantially bolster its deeptech funding, where a long-term gestation period is key. In contrast to mainstream software industries, deeptech requires a high-patience, high-risk approach.

Firstly, more and more states outside of the traditional tech hubs need to implement policy reforms to establish vibrant deeptech ecosystems. It is encouraging to see states like Uttar Pradesh actively seeking investment and partnerships in these sectors.

In the last Union Budget, Finance Minister Nirmala Sitharaman provided for a Rs 10,000 crore deeptech fund of funds. This should be expanded, with a fresh infusion of Rs 10,000 crore each year for the next ten years, taking the size to Rs 1 lakh crore. The nature of this fund is such that a bulk of the money will be raised from the markets, hedge funds, investment banks and the like. Hence, while some part of the amount each year can come from central and state governments, a bulk can be raised through debt and equity markets.

A key priority must be how this money is deployed. An empowered committee comprising the best minds, including civil servants, engineers, start-up founders, scientists, and sectoral experts, should guide the fund alongside professional fund managers.

Importantly, priority should be given to Bharat, rather than India. All this while, most of the start-up funding has been geared towards D2C and B2B start-ups directly or indirectly serving the urban population, primarily in tier-1 cities. In case of funding for deeptech start-ups, India’s smaller cities and rural areas should be the focus.

Recently, TiE Bangalore held a series of closed-door roundtable discussions with more than 60 leaders from the tech, startup and deeptech ecosystem. One important issue which cropped up was that India needs a unified policy architecture that eliminates regulatory fragmentation. Another issue which many industry leaders spoke about is the need for deeper partnerships between academia and the deeptech ecosystem. Postgraduate students and doctoral candidates who want to specialise in deeptech should be able to work, train and research with such companies. This is something the private sector should take the lead in, and deeptech startups should increase their outreach to universities and colleges beyond the IITs and IIMs.

The guiding principle of the government’s stewardship of the ecosystem should be the National Deeptech Startup Policy. The policy aims to boost India’s GDP, increase high-tech exports, improve living standards, and enhance global competitiveness. This policy should be a dynamic one and should regularly undergo amendments and revisions.

While the India AI Mission has done remarkable work in fostering innovation, the Centre could also consider setting up a separate Department of Emerging Technologies under the Ministry of Electronics and Information Technology to provide more government support and guidance to the private sector.

As mentioned earlier, patience is key here. Some of the deeptech solutions to India’s myriad problems may require long-term support. Many of these are long-gestation projects, and some could even fail. But accepting failure is a key hallmark of an ecosystem which prioritises R&D. If done right, we believe that the ‘deeptech revolution’ could be as transformative, if not more, than liberalisation or the Green Revolution.

(Madan is the President of TiE Bangalore. Arup is a policy advisor at TiE Bangalore)