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The 20-Year Horizon: India’s Patient Capital Play for Frontier Tech

The Indian government's decision in February 2026 to overhaul its startup framework is a calculated acknowledgement that building a rocket or a semiconductor fab isn't the same as building a food delivery app. By doubling the recognition period for deep tech startups to 20 years, the Department for Promotion of Industry and Internal Trade (DPIIT) is effectively silencing the "false failure signals" that previously plagued science-led ventures. Under the old 10-year rule, many companies in sectors like biotech or space-tech were losing their "startup" status and the accompanying tax exemptions exactly when they were entering their most capital-intensive commercialization phase. The new rules also triple the revenue threshold to ₹300 crore (approximately $33.1 million), ensuring that maturing deep tech firms remain eligible for state support even as they begin to scale.

Mobilizing the "Nucleus" of Public Capital

To back this legislative shift, the ₹1 trillion ($11 billion) Research, Development and Innovation (RDI) Fund has officially transitioned from policy to operation as of early 2026. In January, the government approved the Technology Development Board (TDB) and the Biotechnology Industry Research Assistance Council (BIRAC) as the first "Second-Level Fund Managers." These entities are now tasked with deploying an initial ₹4,000 crore allocation into high-TRL (Technology Readiness Level) projects that have moved past the lab stage but are still considered too risky for purely commercial venture capital. This "patient capital" strategy is designed to act as a nucleus for private investment, encouraging domestic banks and VCs to participate in funding rounds for technologies that may take a decade to yield a return.

Global Context and the $2 Billion Alliance

Despite a healthy rebound in 2025 that saw Indian deep tech funding reach $1.65 billion, the gap between India and the world's leading tech superpowers remains vast. In that same year, U.S. deep tech startups raised $147 billion, while China accounted for roughly $81 billion. This disparity is the primary driver behind the formation of the India Deep Tech Alliance (IDTA), which has now secured over $2 billion in commitments from private giants like Accel, Blume Ventures, and Qualcomm Ventures. Nvidia serves as a strategic advisor to the alliance, providing technical mentorship and access to its compute stack rather than direct capital, a move that aims to solve the "infrastructure void" many Indian founders face when trying to train large-scale AI models.

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