India Launches ₹10,000 Cr Deep-Tech Fund & Boosts Semiconductor Mission in Major Tech Push

In a transformative move to secure India’s position as a global technology leader, the Government of India has launched a ₹10,000 crore Deep Tech Fund of Funds as part of the Union Budget 2025. This landmark initiative, coupled with a major expansion of the India Semiconductor Mission (ISM), aims to fuel innovation in critical sectors like artificial intelligence, quantum computing, biotechnology, and semiconductor design and manufacturing.

Announced as a core component of the IndiaAI Mission and National Deep Tech Startup Policy (NDTSP), this funding infrastructure is designed to provide patient capital to high-R&D startups, bridging the early-stage funding gap that has long hindered deep-tech innovation in the country.

Deep-Tech Fund of Funds: Structure and Strategy

Investment Framework

• Total Corpus: ₹10,000 crore
• Operation Model: Fund of Funds structure channeling capital through Alternative Investment Funds (AIFs)
• Focus Areas:
  • Artificial Intelligence and Machine Learning
  • Quantum Computing and Communications
  • Biotechnology and Medical Technology
  • Semiconductor Design and Manufacturing
  • Advanced Materials and Robotics

Strategic Objectives

1. De-risk Early-stage Investments: Provide patient capital for high-R&D, long-gestation projects
2. Bridge Funding Gap: Address the “valley of death” between research and commercialization
3. Build Global Champions: Create Indian deep-tech companies capable of competing internationally
4. Strengthen National Security: Develop strategic technologies critical for economic and defense sovereignty

India Semiconductor Mission: Accelerating Growth

Enhanced Budget Allocation

• Ecosystem Development: ₹3,900 crore (increased from previous allocations)
• Production Linked Incentive (PLI): ₹9,000 crore for semiconductor manufacturing
• Total Commitments: ₹1.60 lakh crore ($18+ billion) across approved projects

Recent Approvals (August 12, 2025)

• SiCSem: Silicon Carbide semiconductor manufacturing
• ASIP: Outsourced Semiconductor Assembly and Test (OSAT) facilities
• Additional fab projects across Gujarat and Assam
• Expected to create thousands of high-skilled jobs

Ecosystem Development and Current Progress

Startup Growth

• 72 startups currently prototyping at Mohali’s Semiconductor Laboratory
• 10 deep-tech startups have secured venture capital funding
• 3,600+ deep-tech startups operating in India
• 74% AI-led startups dominating the deep-tech landscape

Manufacturing Milestones

At SEMICON India 2025 (October 3-5, Greater Noida), Prime Minister Narendra Modi received the first batch of “Made in India” chips, declaring:

“When the chips are down, bet on India!”

International Collaboration: India Deep Tech Investment Alliance

US-India VC Partnership

• $1+ billion commitment from leading venture capital firms
• Key Participants: Accel, Blume Ventures, Celesta Capital
• Investment Focus: Seed to Series B rounds in semiconductors, space technology, quantum computing, and clean energy

Strategic Importance

• Knowledge Transfer: Access to global best practices and technical expertise
• Market Access: Pathways for Indian startups to enter international markets
• Capital Inflow: Significant foreign investment in critical technology sectors

State-Level Initiatives Complementing National Strategy

Karnataka’s Deep-Tech Corpus

• ₹100 crore dedicated fund
• Focus on Bengaluru ecosystem development
• Support for AI and semiconductor startups

Tamil Nadu’s Co-Creation Fund

• ₹100 crore fund-of-funds structure
• Emphasis on women-led ventures and climate tech
• Partnership with private sector VCs

Market Impact and Economic Projections

Semiconductor Market Growth

• Indian semiconductor market expected to reach $15 billion by 2027
• Import reduction from 100% to projected 20% by 2030
• Job creation in design, manufacturing, and research

Global Positioning

• India now ranks as the world’s 6th largest deep-tech hub
• Rapid growth in AI and semiconductor patent filings
• Increasing global R&D center establishments by multinational corporations

Implementation Framework and Governance

Administrative Structure

• Nodal Agency: Ministry of Electronics and Information Technology (MeitY)
• Implementation Partners: IndiaAI Mission, India Semiconductor Mission
• Advisory Board: Industry experts, academic leaders, and venture capitalists

Monitoring Mechanisms

• Quarterly Review of fund deployment and startup progress
• Impact Assessment based on job creation, revenue growth, and IP generation
• International Benchmarking against global deep-tech ecosystems

Challenges and Mitigation Strategies

Identified Hurdles

1. Talent Gap: Shortage of specialized deep-tech professionals
2. Infrastructure Limitations: Need for advanced research facilities
3. Regulatory Complexity: Navigating international tech transfer regulations
4. Market Access: Connecting Indian startups to global supply chains

Addressing Challenges

• Skill Development: Partnerships with academic institutions for specialized training
• Infrastructure Investment: Upgrading existing research facilities and creating new ones
• Policy Simplification: Streamlining regulations for technology commercialization
• Global Partnerships: Establishing international market access programs

Conclusion: Building India’s Technology Sovereignty

The launch of the ₹10,000 crore Deep Tech Fund and the expansion of the India Semiconductor Mission represent a strategic commitment to technological self-reliance and global leadership. By combining substantial public funding with private sector expertise and international partnerships, India is creating a comprehensive ecosystem for deep-tech innovation.

This initiative positions India to:

• Reduce critical technology import dependency
• Create high-value jobs in cutting-edge sectors
• Develop strategic technologies for economic and national security
• Establish global leadership in next-generation technologies

For entrepreneurs, researchers, and investors, these developments signal that India is serious about building world-class technology companies from the ground up—making now the perfect time to bet on Indian deep-tech innovation.