India earmarks $25 billion to boost deep‑tech startups amid US‑China tech race

New Delhi has announced a $25 billion commitment to nurture deep‑tech companies, a move aimed at narrowing the gap with the United States and China, CNBC reported. The allocation will be channelled through a mix of sovereign wealth vehicles, public‑private partnerships and venture‑capital incentives, targeting sectors such as artificial intelligence, quantum computing, advanced materials and robotics.

The funding plan is part of a broader strategy to lessen India's reliance on imported hardware and software. Officials say the money will be used to build incubators, provide early‑stage grants and attract foreign expertise, while also encouraging domestic talent to stay within the country’s growing ecosystem.

India’s push comes at a time when both Washington and Beijing are pouring resources into next‑generation technologies. The United States recently unveiled a $100 billion AI initiative, and China continues to dominate global patent filings in areas like quantum communications. By establishing a dedicated deep‑tech fund, India hopes to position itself as a third‑pole in the emerging technology landscape, offering an alternative to the binary choice of aligning with either superpower.

Background: Deep‑tech refers to innovations that are based on scientific breakthroughs rather than incremental software improvements. Historically, India’s tech sector has thrived on outsourcing and services, with limited homegrown hardware or frontier research enterprises. The country’s venture‑capital market, while robust for consumer apps and fintech, has struggled to fund capital‑intensive deep‑tech ventures that require long development cycles and substantial lab infrastructure. Government schemes such as the Startup India programme have helped early‑stage firms, but the new $25 billion pool signals a shift toward supporting high‑risk, high‑reward projects that can generate strategic autonomy and exportable intellectual property.

Industry observers note that the success of the fund will depend on the ability to attract skilled researchers, streamline regulatory approvals, and create a pipeline from academic labs to commercial products. If managed effectively, the investment could catalyse a new generation of Indian AI chips, quantum sensors and autonomous systems, potentially reshaping global supply chains and offering a counterweight to US‑China dominance.

The rollout is expected to begin later this year, with the first tranche earmarked for collaborations between Indian Institutes of Technology and private investors. Stakeholders anticipate that the initiative will not only boost domestic innovation but also draw multinational firms seeking partnerships in a market of over 1.4 billion people.