Outlook 2025: AI, green hydrogen, space tech startups hope to ride on national deep tech policy

With the National Deep Tech Startup Policy anticipated to turn operational in 2025, deep-tech companies, especially new-generation firms, are expected to help India strengthen its position as an emerging global player in areas like artificial intelligence (AI), green hydrogen, space tech, biotech, etc. in the coming months and years.

In a just-released report "India’s Deep Tech Revolution", Speciale Invest, a seed-stage venture capital fund specialising in deep technologies and Oister Global, an alternative fund investment entity, have captured the consistent and growing interest in India’s deep tech firms to suggest that 2025 could only prove better. “The average size of Indian deep tech seed deals has consistently increased in the past eight years”, the report notes adding that in terms of growth percentage, India has seen a 5.3x times growth in the size of seed funding than the global average of 3.6x times during this period.

According to the report, a combination of government support, academic partnerships, and private investment is what is shaping India’s deep tech landscape. “The Indian government has introduced key initiatives like the National Deep Tech Startup Policy and financial support programmes the Biotechnology Industry Research Assistance Council, which are fostering innovation. Premier academic institutions such as the Indian Institute of Technology (IIT) and the Indian Institute of Science (IISc) play a pivotal role in translating research into commercialised technologies, further accelerating the deep tech revolution. Together, these components are nurturing a new wave of entrepreneurs committed to solving global challenges”, the report said. It also notes that private capital is increasingly recognising the potential of deep tech and there has been a marked rise in seed-stage and early-stage investments, with corporates recognising the value of collaborating with deep tech startups. “Corporate capital has been flowing into the sector, especially in industries such as energy, healthcare, and manufacturing. This influx of investment is positioning India’s deep tech sector to compete globally, leveraging its technological expertise and skilled workforce”, the report said.

 “India's deep tech sector is at a defining moment. With cutting-edge innovations across fields like space technology, AI, and green hydrogen, India has the potential to not only transform its economy but also become a global leader in science and engineering-driven solutions. As we continue to invest in and support pioneering startups, we witness firsthand the country’s capacity to solve some of the world’s most pressing challenges. The future is here, and India is poised to lead the charge”. Vishesh Rajaram, Managing Partner at Speciale Invest said.

Incidentally, the investors’ optimism is shared by CS Murali, Chairman of the Entrepreneurship Cell at the Foundation for Science Innovation and Development (FSID), the single window access to the deep science and deep tech within IISc. "As we look towards 2025, the deep tech sector in India is on the brink of transformative growth, fuelled by a vibrant ecosystem of innovation and strategic government initiatives including defence. With over 4,000 deep tech startups currently operational and projections to reach 10,000 by 2030, we are witnessing a significant shift towards advanced technologies that address critical global challenges such as climate change, healthcare, and sustainable energy”, Murali says.

According to Murali, the anticipated launch of the National Deep Tech Startup Policy will foster collaboration between academia and industry, enhance funding opportunities, and promote research and development. “We expect to see a surge in AI-driven solutions in many sectors, particularly robotics and biotechnology, which will redefine traditional industries and create new market opportunities”, he says.