The sentiment among India’s high-tech innovators is one of cautious optimism tempered by frustration. While the India AI Impact Summit in New Delhi showcased significant progress, industry veterans like Dr. Ajai Chowdhry (HCL Co-founder) and firms like TechLegis warn that without a fundamental change in how the government interacts with these startups, India risks remaining a "data center for global giants" rather than a home for proprietary breakthroughs.

Key Challenges & Demands from the Deep-Tech Ecosystem:

• The "Patient Capital" Gap: Deep-tech innovations have long gestation periods. Stakeholders are urging the government to provide higher-value financing—at least ₹10–20 crore per innovation—rather than the smaller grants currently offered, which often fail to sustain a firm through the R&D phase.

• The Government as "Anchor Customer": Using the US DARPA model as a benchmark, founders want the Indian government to prioritize buying from homegrown startups. While the iDEX (Defence) initiative is a start, contract approval times of up to a year are seen as "lethal" for small startups.

• Lack of Policy Harmony: Only Tamil Nadu currently has a dedicated state-level deep-tech policy. Experts are calling for a unified National Deep-Tech Mission that synchronizes Central priorities with State execution to avoid regulatory duplication and build specialized clusters.

• Beyond SaaS Metrics: VCs highlighted that deep-tech startups are still being unfairly benchmarked against SaaS metrics (which prioritize quick ARR growth). This "valuation distortion" prevents capital-intensive hardware and deep-AI firms from raising Series A and B rounds.

• Shared Infrastructure: There is a demand for "National Compute Resources" and shared fabrication labs. Without these, the high cost of data processing and hardware testing remains a massive barrier to entry.

Current Policy Context:

The Union Budget 2026 made strides by increasing the revenue eligibility threshold for deep-tech to ₹300 crore and extending the incorporation window to 20 years. However, as noted by Sudiptaa Paul Choudhury (QNu Labs), the sector needs 5–10 years of policy stability and "demand creation" to truly move from a grant-heavy ecosystem to a commercial success story.

Market Warning:

A B20 report noted that only 22% of new businesses launched in the last decade have successfully scaled. Without the proposed "de-risking" tax incentives (similar to Canada’s 30% R&D relief), experts fear India may miss the window to dominate the next wave of "Physical AI" and Quantum Computing.