India is preparing to deploy $25 billion to support Deep Tech start-ups in the country, as it tries to catch up with the U.S. and China in the global tech race to cut its reliance on frontier foreign technology.

In the last decade, India invested $11.6 billion in Deep Tech Rajat Tandon, president of the Indian Venture and Alternative Capital Association, told CNBC.

But now, the government alone has committed to invest $11 billion under the Research Development Infrastructure Fund, which will be matched by venture capital and private equity fund managers, he said. Three or four billion more will be added, making "$25 billion available to be spent on Deep-Tech investments," Tandon said.

Deep Tech is a broad term used for start-ups in artificial intelligence, semiconductors, advanced manufacturing, drones and space tech. Experts told CNBC that the funding push comes as the government has realized that frontier tech is becoming "very critical" amid rising geopolitical tensions.

China and the U.S. currently lead the global AI race, and while Chinese tech is seen with suspicion in India Washington's curbs on tech exports make it unreliable.

"Tariffs from the U.S. actually help this [Deep Tech] segment a lot," Anandamoy Roychowdhury, managing director of Crane Venture Partners, said, adding that India will develop local Deep Tech companies as it fears that "important technology can get cut off at any point." Some of these fears were realized earlier in June when Anthropic disabled access to its new models — Fable 5 and Mythos 5 — for foreign nationals, complying with an export-control directive from the U.S. government.

The start-up funding leaders who had gathered for SuperReturn Asia said that India's companies were at a nascent stage but added that the ecosystem was poised to create global champions eventually given the quality of ideas and talent in the country.

There is a "dramatic acceleration of innovation" in the Deep Tech space in India, Shweta Rajpal Kohli, president and chief executive of Startup Policy Forum, said, adding that some companies are moving from prototype to "real commercialization." Earlier this year, Vibe-coding startup Emergent space tech company Skyroot and India's full-stack sovereign AI company Sarvam became unicorns as their valuations crossed $1 billion during the latest fundraising round.

'Candy store' "I feel like a kid in a candy store," Roychowdhury of Crane Ventures said, describing his experience of scouting for Deep Tech start-up investments in the country. About 80% of his $150 million APAC fund is currently concentrated in India, he shared.

In August, the IVCA, in a report, said that its survey across 100 funds in the country showed that nine out of 10 funds in India were deploying capital in startups, with 37% holding a stake in 11-20 such companies, The report added that in 2025 the sector received nearly $3 billion in funding—its highest ever, even as overall start-up funding in India fell. However, it also underscored the massive funding gap with the U.S., where $136 billion was raised.

One of the key disadvantages for Indian Deep Tech start-ups over those in the U.S. is the lack of domestic capital required to scale these long-gestation, innovative investments. "Our challenge today in India is that only 2% of people are able to sign" checks above $10 million, Tandon of IVCA said, adding that high net worth individuals and family offices need to ramp up their investments to develop Deep Tech in India.

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