India is looking to update how it funds deep-tech ventures, as standard software-based metrics often fail to capture the value of long-term projects like quantum computing. With large government schemes now active, policy discussions are focusing on better governance to manage conflicts of interest and ensure objective evaluation of high-risk projects.
The Indian government is facing calls to change the way it evaluates deep-tech startups. While traditional software companies can often be measured by short-term revenue and quarterly growth, deep-tech firms working on semiconductors, quantum computing, or biotech require years of research before they can produce a product. Applying standard e-commerce or software-as-a-service metrics to these ventures can be misleading and may result in the rejection of potentially vital long-term projects.
To bridge this gap, the government has launched the ₹1-lakh-crore Research, Development and Innovation scheme, which is designed to support high-risk projects over a six-year period. Additionally, the Technology Development Board has started offering collateral-free loans with repayment tenures of up to 15 years. This policy shift acknowledges that deep-tech requires patient capital, as these ventures cannot be forced to meet the rapid revenue cycles expected of conventional technology businesses.
However, as more capital flows into the sector through initiatives like the Startup India Fund of Funds 2.0, there is a growing emphasis on transparency. Experts have noted that the concentration of capital increases the risk of institutional cronyism, where funding decisions could be influenced by existing network connections rather than project merit. To protect the integrity of these investments, there are calls for strict conflict-of-interest policies. These rules would require evaluators to disclose all advisory roles, board positions, and previous investments, with mandatory recusal from decision-making for those with significant ties to a company.
Another core area of discussion is the need to overhaul the evaluation process itself. Currently, there is a push to rotate evaluation panels more frequently to prevent any single group from gaining excessive influence over funding decisions. Furthermore, there is a suggestion to separate technical assessments from commercial ones. By letting scientists judge technical feasibility and investment professionals evaluate business viability, the government aims to create a clearer, more objective audit trail. This separation is intended to ensure that investment decisions are based on data rather than professional friendships or industry proximity.
For the Indian ecosystem, the long-term success of these moonshot projects will depend on how effectively these governance guardrails are implemented. Because many of these high-risk ventures may eventually fail, the focus of the policy is shifting toward ensuring that failure is caused by technological or market challenges, rather than by flawed processes or governance lapses. The next step for the industry will be to track how these new transparency measures are adopted by funding agencies and whether they successfully insulate the selection process from outside influence.