Agrani Labs CEO Dheemanth Nagaraj says Indian deeptech must focus on global quality standards, not just lower costs. He argues the government must act as a foundational customer to help domestic startups compete with global giants and validate high-performance technologies.
At the ET Startup Awards 2026, Dheemanth Nagaraj, the CEO of Bengaluru-based semiconductor startup Agrani Labs, highlighted a critical challenge facing India’s deeptech sector. He urged that for local companies to succeed, they must pivot away from the strategy of competing primarily on price and instead aim for global quality benchmarks. This is particularly relevant in high-performance sectors like data centers, where equipment must meet rigid international standards that do not allow for compromises in performance or reliability.
The Need for Government Validation
Nagaraj argued that Indian deeptech firms struggle to gain traction against established global incumbents because the playing field is not level. Global giants often have decades of experience and proven track records that make them the preferred choice for enterprise customers. To break this barrier, he proposed that the Indian government should step in as the first customer for locally developed technologies. By deploying these solutions in its own infrastructure, the government can effectively de-risk the products, providing the necessary validation that other commercial clients require before adopting new systems.
Scaling and Competitive Challenges
Agrani Labs, founded in 2024 by former executives from major chipmakers like Intel and AMD, is currently navigating the highly capital-intensive semiconductor landscape. The company previously raised $8 million in seed funding led by Peak XV Partners and is reportedly in discussions to raise between ₹800 crore and ₹850 crore to support its development of high-performance AI GPUs.
However, the path forward involves significant hurdles. Building full-stack AI semiconductor solutions requires massive upfront investment and long product development cycles. Furthermore, companies in this space must prove their reliability against international competitors that have dominated the market for years. Without early-stage state support to help prove these technologies in real-world environments, domestic firms risk falling behind in the global race to build critical digital infrastructure.
A Shift Toward Indigenous Sovereignty
Beyond immediate commercial growth, the focus on domestic deeptech is tied to the broader goal of technological sovereignty. Developing indigenous solutions allows India to retain control over intellectual property and enhance the security of its infrastructure. By aligning government procurement policies with the growth of local startups, the country aims to reduce its dependency on foreign entities for essential systems. The ultimate success of this strategy, however, will depend on whether domestic firms can consistently deliver hardware that matches the global standards required by modern enterprise, cloud, and data center operations.