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.
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
- De-risk Early-stage Investments: Provide patient capital for high-R&D, long-gestation projects
- Bridge Funding Gap: Address the “valley of death” between research and commercialization
- Build Global Champions: Create Indian deep-tech companies capable of competing internationally
- 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
- Talent Gap: Shortage of specialized deep-tech professionals
- Infrastructure Limitations: Need for advanced research facilities
- Regulatory Complexity: Navigating international tech transfer regulations
- 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