Deep tech startups taking brave risks

Source– The post is based on the article “Deep tech startups taking brave risks” published in “The Hindu” on 3rd August 2023.

Syllabus: GS3- Indian economy

Relevance: Issues related to manufacturing sector

News– The article explains the progress on startups and deep tech startups in India.

What is the progress of India in the area of startups?

In the past decade, the Great Indian Startup Boom has generated a thriving entrepreneurial ecosystem in India. It is led by young entrepreneurs and supported by the government’s Startup India initiative.

This phenomenon extends beyond metropolitan cities. Entrepreneurs from suburban and rural areas are adopting it.

Presently, the government recognizes over one lakh startups. Nearly half of them are originating from Tier 2 and Tier 3 cities.

How deep tech startups are making significant progress in India?

The Startup movement has evolved beyond consumer Internet and e-commerce. It has now expanded to deep technology domains like space and remote sensing, artificial intelligence, robotics, biotechnology, drones, defense, telecommunications, semiconductors.

IIT Madras’s Research Park, has incubated over 200 deep tech companies valued at more than ₹50,000 crore. It includes those in space and aviation; C-CAMP, and the National Chemical Laboratory’s Venture Centre.

It demonstrates how science from publicly-funded institutions can be made accessible to citizens and consumers through startups.

The industry has shown a clear inclination towards investing in deep-tech startups and acquiring well-established scaled technologies.

This trend is supported by the acquisition of deep tech startups by prominent Indian legacy corporations. For instance, the Tatas acquired Saankhya and Tejas Networks, Reliance acquired Faradion, and Hero Motors purchased equity in Ather Motors.

Way forward

The government should support the second phase of entrepreneurship, a Startup India 2.0. This support must come through two routes-

1. There should be a significant increase in the availability of risk capital for deep tech startups. The government should prioritize these sectors and allocate more resources to the existing SIDBI Fund of Funds.

The industry should redirect and enhance their research funds to support the financing of deep tech startups.

2. There is a need to facilitate the widespread adoption of domestically developed technologies through mass procurement. More coordinated efforts across the entire government are required.

Industry players and industry bodies can contribute by promoting the adoption of locally-made technologies.

This can be achieved through collaborative efforts in incubators to co-create products and solutions, conducting rapid testing and certification processes, and providing support for large-scale procurement of innovative goods.