Industry participants stated that the government’s emphasis on deeptech startups through the recently unveiled India artificial intelligence (AI) program is a “good starting point” for creating an environment that is favorable for investment in the field.
Experts predict that the mission’s emphasis on boosting research and development (R&D) in these businesses will foster innovation and lead to the creation of new business models in the industry.
Last Monday, the Union Cabinet approved a five-year budget of Rs 10,372 crore for the India AI Mission. Its goal is to use public-private partnerships (PPPs) to promote AI innovation. Nearly Rs 2,000 crore of this will be used to fund deeptech businesses, with an emphasis on speeding up research and development at these companies.
The action will give deeptech startups in the nation the much-needed financial support they require; according to the creators, this has been a significant barrier to progress in the industry.
The founder and CEO of Twyn, a deeptech enterprise software-as-a-service (SaaS) business, Avi Dahiya, stated that the company’s frequent rejections are a result of the complicated nature of its projects, lengthy development cycles, and perceived dangers.
Industry estimates place the number of deeptech startups active in India at about 3,000. Of them, less than 20% have been successful in obtaining adequate funding. Industry participants claim that the country’s financial allocation of Rs 2,000 crore for the sector is a solid place to start when creating an atmosphere that is favorable to investment.
The founder and CEO of Datoms, a deeptech Internet of Things (IoT) business, Amiya Kumar Samantaray, said, “Though Rs 2,000 crore is not a very big amount, it has set the tone for the country’s venture capital or investment ecosystem.”
“With a dedicated budget and a mission to advance AI, AI has become the talk of the VC industry. This will encourage additional investors to search for business ideas in the industry,” he continued.
According to experts, the investing community would want clarification on matters like rules and data sharing guidelines.
The goal of SanchiConnect, a network for deeptech startups, according to its founder and CEO, Sunil Shekhawat, will also be to support new corporate social responsibility (CSR) projects that will increase the R&D of deeptech firms. Technology business incubators (TBIs) and government-sponsored incubators would be used for the process.
Furthermore, it is anticipated that the mission’s emphasis on accelerating R&D in deeptech AI businesses would further expand opportunities and aid in the development of new business models.
A rising number of industries are realizing that R&D is essential to being competitive and is not an alternative. Tech giants are no longer the only companies that succeed in research and development (R&D); startups and small and medium-sized businesses also actively invest in R&D, according to Dahiya.
The government released the Draft National Deep Tech Startup Policy (NDTSP) for public comment in July of last year. Its goal was to assist entrepreneurs in overcoming obstacles to capital, hiring the best personnel, and growing their R&D departments.
The Department for Promotion of Industry and Internal Trade (DPIIT) announced later in December 2023 that a draft Cabinet note was being prepared and that the Deeptech Startup policy consultation was now closed.
Industry observers claim that the adoption of the India AI Mission is a tactical step toward establishing India as a leader in AI globally by “democratizing access to artificial intelligence.”
According to Soumendra Mohanty, chief strategy officer (CSO) of the AI and data analytics company Tredence, “the creation of an AI marketplace focused on building a larger ecosystem signifies a pragmatic initiative, streamlining access to critical resources and fostering collaboration within the AI ecosystem.”
According to Samantaray, the mission also creates opportunities for government agencies to collaborate directly with startups in a range of AI-related fields. It can assist in resolving issues that are highly particular to India.
The number of AI businesses is projected to rise substantially in the event that appropriate funding and assistance become available. Industry projections state that by 2030, India will be home to more than 10,000 deeptech startups.
