India's DeepTech Dream Needs More than Funding The global deep tech race is heating up, with the U.S. leading in unicorns, while China, despite regulatory hurdles, surpassed the U.S. in space-tech funding with strong state support

In 2024, Indian DeepTech startups—including those working in defence, AI, space, quantum computing, and semiconductors—attracted USD 1.6 billion in funding, marking a 78% increase from 2023, according to the Nasscom. Also, India's space-tech startups alone raised USD 76.79 million, bringing the sector's total private capital infusion to around USD 463.24 million. Notable players like Pixxel, GalaxEye, Dhruva Space, Piersight, XDLink Labs, and EtherialX are among those shaping India's space ambitions.

Yet what stands out isn't just the funding—it's the scale of opportunities. According to Vinod Kumar, Director at IN-SPACe (Indian National Space Promotion and Authorisation Center), "In just the last year alone, the private space sector has seen ₹15,000 crore worth of opportunity," and India's target is to grow its share in the global space economy from 2% to 8% by 2033, reaching USD 54 billion.

Much of this progress is a result of robust policymaking and institutional support. The IDEX (Innovations for Defence Excellence) initiative, launched in 2018 under the Defence Innovation Organisation, has so far issued 544 problem statements, received over 13,000 applications, and sanctioned more than INR 400 crore in grants.

The latest high-impact initiative, ADITI—a scheme to promote innovations in critical and strategic defence technologies—raised the stakes by offering grants up to INR 25 crore per challenge, a notable leap from the initial INR 1.5 crore under DISC (Defence India Startup Challenge).

"These startups, including Rekishi Marine and others like IdeaForge, Sagar Defence, and Tonbo, now have order books worth hundreds of crores," emphasised Rear Admiral (Retd.) Shekhar Mital, Co-founder, Rekishi Marine. "And this success isn't a coincidence—it's the result of a deliberate, systemic push from the government," noted Mital.

Global race towards deep tech

Globally, the deep tech race is intensifying. The U.S. dominated in 2024, accounting for 70% of newly established deep tech unicorns. In Q1 2025 alone, U.S. venture capital investments reached USD 91.5 billion—a whopping 116% year-over-year increase—fueled by OpenAI's record-breaking USD 40 billion round.

China, meanwhile, remains a formidable contender. With over 6,400 deep tech startups and aggressive state funding—including a 1 trillion yuan (USD 138 billion) initiative in 2025—China's space tech startups raised USD 2.7 billion in 2024, surpassing U.S. figures. Still, the country saw a 38.7% dip in VC and PE funding due to regulatory pressures.

India may not match these figures yet, but its model is leaner, more democratic, and built on resilient IP creation—moving from "manufacturing to print to design." "We see this as an opportunity rather than a challenge," said Arun T. Ramchandani, Executive Vice President at L&T Defence. "Startups can help us innovate faster and democratise our innovation cycle." He emphasised that defence product reliability is critical: "It doesn't suffice to have an idea that works in a lab. You must face the field," he added.

VCs weigh in

While government grants like IDEX and ADITI provide critical momentum, venture capitalists still want more robust support systems. "Time to build and access to capital infrastructure is one of the biggest challenges," said Arjun Rao, Partner, Speciale Invest. "We need testing labs, chip design support, and materials supply chains—all of which must become part of India's startup DNA." "This sector cannot afford the 'move fast, break things' mindset—it's about building fast, but building right," he added.