In a significant policy shift, the Government of India has expanded the scope of recognised startups under the Startup India programme to formally include deep technology enterprises as a distinct regulatory category. The notification issued by the Department for Promotion of Industry and Internal Trade (“DPIIT”) marks a structural recalibration of India’s startup framework, acknowledging the unique capital, gestation, and commercialisation cycles of science-led ventures.

Key Changes Introduced

Definition of deep tech startups

For the first time, the government has clearly articulated what constitutes a deep tech startup. Under the revised framework, such entities must:

1. develop solutions grounded in new knowledge or advancements in the scientific or engineering discipline or multiple disciplines;

2. demonstrate a high proportion of expenditure on research and development activities;

3. own, or be in the process of creating, significant novel intellectual property, and taking steps to commercialise the same; and

4. facing extended development timelines, long gestation periods, high capital and infrastructure requirements, and carrying large technical or scientific uncertainty.

Until now, deep tech firms which span across sectors such as advanced materials, semiconductors, artificial intelligence, biotechnology, aerospace, and quantum computing, etc., were evaluated under a generic innovation-based startup definition. That framework was often ill-suited to ventures characterised by long R&D cycles, regulatory approvals, and capital-intensive prototyping.

By carving out a separate regulatory identity, the government has recognised that deep tech is not merely a sectoral category but a fundamentally different business model.

Extended Recognition Period

The most consequential change is the extension of the recognition period, where regular startups get recognition valid for 10 (ten) years from incorporation, and deep tech startups get extended up to 20 (twenty) years.

This doubling of the recognition window reflects the reality that deep tech enterprises often require a decade or more before achieving commercial scale.

Higher Turnover Threshold

The notification also revises the turnover ceiling:

• Regular startups: INR 200 crore (Rupees two hundred crore) annual turnover cap.
• Deep tech startups: INR 300 crore (Rupees three hundred crore) annual turnover cap.

This higher threshold allows deep tech firms to scale revenue without prematurely losing startup status, and retaining all regulatory compliance relaxations.

Supersession of the 2019 Framework

The notification supersedes the February 2019 notification which previously defined “startups” and provided the framework for obtaining certification from DPIIT.

Process and Recognition Mechanism

The procedural framework remains anchored in the DPIIT recognition portal. Entities seeking startup status must:

1. Be incorporated in India as a private limited company, partnership firm, limited liability partnership, or cooperative society.

2. Demonstrate innovation, development, improvement of products/services/processes, or a scalable business model with potential for employment or wealth creation.

For deep tech startup recognition, applicants must additionally furnish documentation as may be specified in the online application portal which demonstrates that the entity meets the additional attributes applicable to be recognized as a deep tech startup.

DPIIT will evaluate applications in accordance with prescribed frameworks and guidelines. While the process remains application-driven, the introduction of deep tech criteria implies more technical scrutiny, potentially involving domain-specific assessment standards.

Conclusion

The expansion of the startup definition to formally include deep technology enterprises represents a structural development of India’s startup policy architecture. By extending the recognition period to 20 years, increasing turnover thresholds, and introducing a clear definitional framework, the government has acknowledged the distinctive lifecycle of science-led ventures.

The move signals a broader policy direction of positioning India as not only a startup ecosystem driven by digital platforms and consumer technology, but as a hub for frontier science and engineering. By tying deep tech classification to novel intellectual property and R&D intensity, the framework incentivises domestic intellectual property generation.

Please find attached a copy of the Notification, here.

This update has been contributed by Armaan Patkar (Partner) and Paridhi Rastogi (Associate).

Argus Knowledge Centre is now on WhatsApp! Send us a message on +91 8433523504 to receive updates from our Knowledge Centre.