RK Singh, the Secretary of the Commerce Ministry's Department for Promotion of Industry and Internal Trade (DPIIT), disclosed that the policy regarding startups in the deep tech sector is nearing completion in terms of inter-ministerial discussions and may soon be made public. Fortune India was the first to report on January 2 that the DPIIT is expected to issue a policy note regarding deep-tech startups after consulting with the office of the Principal Scientific Advisor.
Also Read: Draft deep-tech policy soon
Deep tech encompasses advanced technologies, many of which are still in development but hold potential for causing significant disruptions in the future, Singh says during the Startup Mahakumbh event on March 18.
The event is anticipated to draw participation from numerous startups and investors across various sectors, including artificial intelligence (AI), software-as-a-service (SaaS), agritech, business-to-business (B2B) services, manufacturing, climate tech, direct-to-consumer services, gaming, esports, fintech, as well as incubators and accelerators.
The event is being jointly organised by industry bodies such as Assocham, Nasscom, Bootstrap Incubation and Advisory Foundation, TiE, and the Indian Venture and Alternate Capital Association (IVCA). It enjoys support from DPIIT, the Ministry of Electronics and Information Technology Startup Hub (MSH), and Invest India.
In the Interim Budget speech earlier in the year, Finance Minister Nirmala Sitharaman announced a ₹1 lakh crore fund to provide long-term, low-cost, or zero-interest loans for research and development. She also pledged to introduce a new scheme to enhance deep-tech capabilities in the defence sector.
Former NITI Aayog CEO and India's G20 Sherpa Amitabh Kant referred to India's startups as a "national asset" with a collective worth of $350 billion in the past eight years. Despite India's current status as home to the third-largest startup ecosystem globally, Kant highlighted the goal of reaching the top spot within the next five years.
During a press briefing before the event, Singh expressed the government's aim to improve India's global innovation ranking, which currently stands at 40. He emphasised the potential of Startup Mahakumbh to become an annual event that fosters growth in the Indian startup ecosystem and unites innovators nationwide, aspiring to make it the largest global event of its kind.
The year 2023 posed challenges for Indian startups, with a total fundraising of $8.3 billion, the lowest since 2016. The compound annual growth rate (CAGR) of funding also witnessed a 72% decline over the last three years, signalling the end of the venture capital-driven boom post-Covid-19.
While 2022 saw the addition of 23 unicorns in India, 2023 only saw two firms achieving that status, and over 20,000 individuals employed in startups lost their jobs during the year. As a result, startup founders and investors are seeking support from established conglomerates to fund emerging businesses in the country.
Founders are expected to focus more on essential metrics like increased profitability and reduced cash burn in 2024. However, investors anticipate that the funding ecosystem may not experience the same level of enthusiasm as seen in 2021.
In light of these trends, startup founders and investors are urging large legacy companies in India to invest in upcoming businesses. Leading figures in the industry, like Sanjeev Bikhchandani from Info Edge India, emphasise the need for greater corporate investment in startups alongside traditional sources like venture capital and angel investors.
Zomato's co-founder and CEO Deepinder Goyal echoed similar sentiments, highlighting the importance of established businesses nurturing startups with the intention of helping them grow rather than owning them outright.