05 August 2023
The Office of Principal Scientific Advisor to the Government of India published the Draft National Deep Tech Startup Policy (NDTSP) for public recommendations. According to Startup India's database, as of May 2023, more than 10,000 startups in India can be classified within the deep tech space and it is imperative to address the complex problems in the ecosystem.
Deep tech refers to technologies which are based on pioneering scientific breakthroughs, which help providing solutions to complex problems. Deep tech conceptually includes the segment of Artificial Intelligence, Big data and analytics, Robotics, Internet of Things, Blockchain, etc., however, it is seldom difficult to make that identification.
The NDTSP recognizes that in order to understand the issues in the ecosystem, it is important to focus on identifying what qualifies as ‘deep tech’. While doing so may be challenging, the NDTSP aims to establish a framework of a working group that would be responsible in identifying the techno-commercially viable startups, which would further enable the creation of a definitive criterion for determining whether a startup can be qualified as ‘deep tech’.
The NDTSP seeks to address the needs, complex challenges and strengthen the deep tech startup ecosystem by complimenting the current Start-up India policies and initiatives. The NDTSP aims to thematically prioritize the areas that require intervention and propose policy level changes in order to create a conducive ecosystem for the deep tech startups in the following manner:
The NDTSP aims to bolster research, development and innovation by incentivizing researchers, facilitate seamless dissemination of knowledge and set up platforms for protection and commercialization of IP. The primary priority of the policy is to increase gross expenditure on research and development by encouraging public and private investment through patient capital.
The NDTSP recognizes that the deep tech ecosystem lacks specialized support in obtaining patents required for such cutting-edge technology. In order to streamline the process of obtaining IP registrations, the NDTSP focuses on building framework for obtaining and managing the IP specifically in the deep tech space, capacity building for patent landscaping, monetary incentive for developing technologies with the government and other amendments in the current IPR Policy, 2016.
The NDTSP aims to enhance the already existing policies and programs of the government in order to tailor them for the requirements of the deep tech space by various initiatives such as setting up a centralized window to capture the lifecycle of government grant payments, assessment of the current CSR laws in order to facilitate CSR funding into the deep tech sector, building a dedicated deep tech guidance fund with longer tenure to match the gestation period of the deep tech startups, to mobilise the government, private and foreign funding in the ecosystem, reducing the compliance burden and onerous taxation in order to curb the relocation of startups to other countries with better taxation regimes, among others.
The NDTSP recognizes the high cost required for the primary R&D in the frontier technology space and hence, it endeavours to provide access to shared infrastructure to deep tech startups at nominal fees. The NDTSP also aims to build other resource sharing mechanisms for dissemination of data to such startups, as well as dissemination of data expertise.
The NDTSP encourages establishment of mechanisms such as regulatory sandboxes that would help startups, end-users, industry, and regulatory experts to test the technology in a controlled environment while gathering evidence on functionality and potential risks of the technology. The NDTSP also focuses on providing subsidies and exemption in certification and accreditation costs for deep tech startups. This enables experimentation of frontier technology to comply with existing regulatory frameworks.
The NDTSP places great impetus on capacity building vis-à-vis encourages establishment of knowledge dissemination mechanisms in different segments of frontier technology, creation of accessibility to the educational resources and building inclusive framework for encouraging involvement of women and people from tier II and tier III cities in augmenting the deep tech ecosystem.
The NDTSP advocates for public procurement as a market for deep tech startups and aims to enhance the current programs and initiatives by implementing targeted interventions. The NDTSP urges the government to take a higher risk on such deep tech startups and enable public procurement to be the first market for such startups.
While many policies to encourage the deep tech segment are already established, the NDTSP encourages enhancing the policies and creating interlinkages in already existing initiatives in order to create a larger impact.
Lastly, considering the gestation period of deep tech startups, the policy aims to set mechanisms and provide a roadmap to the startups engaged in building frontier technology to ensure sustainable growth by implementation of funding sensitization programs, facilitation of meaningful partnerships, among many other initiatives.
While the initiative of formulating a policy for the deep tech ecosystem is meritorious, it would be interesting to witness how the policy shapes up. Considering the nascent stage of the deep tech ecosystem in India and the multitudes of benefits that the deep tech actually offers, it is pertinent to encourage experimentation and high-risk investments in this ecosystem.
The Draft National Deep Tech Startup Policy is open for public recommendation until September 15, 2023.
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