[Answered] Critically assess the key challenges hindering deep-tech innovation in India and suggest one crucial policy intervention to foster a more enabling ecosystem.

Introduction

Deep-tech innovation—grounded in fundamental scientific breakthroughs such as artificial intelligence (AI), robotics, quantum computing, and semiconductors—is essential for India to secure its place in the future global technology order and realize the vision of Viksit Bharat@2047. Despite being the third-largest startup ecosystem with over 100 unicorns, India lags in deep-tech, ranking 39th on the 2024 Global Innovation Index, far behind China (11th).

Key Challenges Hindering Deep-Tech Innovation in India

1. Inadequate Public and Private R&D Spending: India’s Gross Expenditure on R&D (GERD) is just 0.7% of GDP, compared to 2.4% in China and 3% in the USA. As per the Economic Survey 2023, the private sector’s share remains low and concentrated in a few sectors like pharma and IT.
2. VC Landscape Skewed Towards Quick Returns: Indian venture capitalists favour consumer-centric startups (e.g., quick commerce, food delivery), due to low gestation and high ROI. Startups in core technologies face difficulty attracting long-term funding.
3. Weak Research-Education-Industry Linkages: While India produces a large number of engineers, a 2021 NASSCOM report noted that 80% are unemployable in deep-tech domains. Global brain drain persists—talent thrives in Silicon Valley but not domestically due to lack of infrastructure and opportunities.
4. Regulatory Bottlenecks and Bureaucratic Delays: Long approval cycles, limited ease of doing innovation, and past issues like the Angel Tax have deterred investors and innovators.
5. Cultural Risk Aversion and Lack of IP Commercialization: Deep-tech requires tolerance for failure and long incubation periods, which India’s education and business systems often do not support. Patent filing and IP protection remain low—India filed just 61,000 patents in 2023 vs China’s 1.5 million.

Policy Intervention: National Deep-Tech Innovation Fund

To address these gaps, India must launch a ₹50,000 crore National Deep-Tech Innovation Fund with the following features:

1. Blended finance model: mix of equity, grants, and soft loans.
2. Mission-driven investments in frontier areas: semiconductors, defence tech, AI, clean energy, and biotech.
3. Foster start-up–university–industry consortia with long-term hand-holding.

Conclusion

Commerce Minister Piyush Goyal’s warning against India’s “dukandari” (shopkeeping) approach to startups is timely. Innovation in consumer apps cannot substitute for foundational tech growth. India must pivot from incrementalism to deep-tech leadership by fixing the funding gap, building research infrastructure, and creating a culture that embraces long-term innovation. A robust fund coupled with policy reforms is key to achieving India’s aspiration of technological self-reliance and global leadership.