India’s national AI and deep tech strategy, startup rules, funding mechanisms, and compute infrastructure build‑out

India’s Deep Tech and AI Ecosystem in 2024: A Year of Strategic Growth, Innovation, and Global Integration

India continues to cement its position as a burgeoning global hub for deep technology and artificial intelligence (AI) in 2024. Building on its foundational reforms and ambitious national vision, the country’s ecosystem is witnessing an unprecedented surge driven by long-term policy commitments, record-breaking investments, infrastructure expansion, and a vibrant startup culture. These developments collectively signal India’s emergence as a self-reliant innovation powerhouse capable of shaping the future of frontier technologies.

Strategic Policy Framework and Sectoral Prioritization

At the heart of India’s deep tech revolution are comprehensive policy reforms aimed at fostering a predictable, resilient, and inclusive innovation environment. Notably:

• Extended Support Durations: Recognizing the long gestation periods characteristic of high-impact R&D, the government has formalized support programs extending up to 20 years. This strategic move provides startups and research institutions with the stability necessary to pursue ambitious projects in hardware innovation, space exploration, AI research, and semiconductor development—areas traditionally constrained by short-term commercialization pressures.

• Enhanced Incentives and Eligibility: To democratize participation, India has raised turnover thresholds for accessing grants and regulatory benefits, encouraging a broader spectrum of startups, including those in emerging sectors and regional hubs.

• Sectoral Focus Areas: The government has explicitly identified semiconductors, space technology, robotics, and advanced materials as priority sectors. Dedicated funding streams, tenders, and support programs aim to strengthen indigenous supply chains, reduce import dependence, and foster regional innovation clusters that can compete globally.

Such targeted reforms are designed to attract sustained domestic and international investments while catalyzing breakthroughs that position India as a leader in frontier domains.

Record Capital Flows and Strategic Industry Commitments

India’s deep tech funding landscape has shattered previous records, reflecting growing confidence from global and domestic investors:

• The Startup India Fund of Funds 2.0 announced a substantial Rs 10,000 crore (~US$1.2 billion) dedicated exclusively to early-stage and deep tech ventures. This fund aims to de-risk investments and accelerate innovation, especially in AI hardware, space tech, and semiconductors.

• Leading venture funds are mobilizing significant capital: ValleyNXT launched the Rs 400 crore Bharat Breakthrough Fund, focusing on frontier technologies, while the India Deep Tech Alliance announced plans to raise $1 billion to bolster AI startups. Private equity and venture capital investments have tripled since 2020, now constituting roughly 12% of India’s overall VC investments.

• Noteworthy startup raises include C2i Semiconductors, which secured $15 million in Series A funding—the largest for an Indian chipmaker—with participation from global investors such as Intel CEO Pat Gelsinger. This signals India’s rising credibility in semiconductor hardware and chip design.

• Global tech giants are deepening their commitments: Qualcomm announced a strategic investment of up to $150 million across Indian startups specializing in AI, 5G, and IoT applications, further integrating India into the global supply chain.

• Established companies like ASM Technologies have made strategic stakes, exemplified by their ₹48 crore (~US$6 million) investment in Bengaluru-based Myelin Foundry, highlighting interest from industry leaders in indigenous AI solutions.

• Tattvam AI, spun out of IIT Madras, raised $1.7 million to develop AI-driven semiconductor design automation tools, directly addressing hardware bottlenecks and fostering domestic semiconductor innovation.

Building Indigenous Compute Infrastructure and Hardware Ecosystem

A cornerstone of India’s deep tech strategy is developing resilient, self-reliant hardware and compute infrastructure:

• The IndiaAI Mission has onboarded over 38,000 GPUs, significantly expanding capacity for training large language models (LLMs), AI research, and compute-heavy applications. This infrastructure aims to reduce reliance on foreign hardware and promote domestic AI solution development.

• The government has allocated ₹1 lakh crore (~US$13 billion) toward indigenous chip design, advanced materials, and space exploration, with a focus on building local supply chains and reducing import dependencies.

• Startups like C2i are pioneering energy-efficient, green AI data centers that align with India’s commitments to sustainable AI hardware solutions, capable of supporting large-scale AI deployment responsibly.

• International collaborations are intensifying: Nvidia, a global leader in AI hardware, is expanding early-stage support programs in India, offering training, co-innovation opportunities, and access to cutting-edge hardware. These efforts are instrumental in fostering indigenous AI hardware development, a critical component for training large models domestically.

• India’s focus on large language models such as Sarvam AI’s Indus, a 105-billion-parameter model, and Indus Chat, a conversational AI platform tailored for Indian languages, exemplifies its ambition to develop self-reliant AI solutions with global competitiveness.

Rapidly Evolving Startup Ecosystem and Cutting-Edge Innovations

India’s startup landscape in 2024 is vibrant and expanding, driven by significant funding rounds, strategic collaborations, and innovative product launches:

• Sarvam AI unveiled two large language models—a 30-billion-parameter and a 105-billion-parameter—at the India AI Impact Summit. Their Indus Chat platform aims to disrupt global giants with localized, culturally relevant conversational AI that understands Indian languages and context.

• Gushwork AI, a new entrant focusing on AI-powered search engine discovery and agentic AI capabilities, recently secured $9 million in seed funding led by Susquehanna Asia VC. This startup exemplifies the emerging agentic AI startup wave in India.

• Portkey, a GenAI startup, raised $15 million in Series A funding led by Elevation Capital, focusing on enterprise AI spend management—addressing the increasing demand for scalable, cost-effective AI deployment solutions.

• Activate, led by investor Aakrit Vaish, announced a multi-year partnership with Nvidia to support early-stage AI startups via co-investments, accelerators, and access to advanced hardware, further strengthening India’s startup pipeline.

• RationalGO, founded by ex-McKinsey and Y Combinator professionals, launched an autonomous AI agent platform capable of executing complex, multi-step tasks, signaling a leap toward enterprise automation and autonomous decision-making.

• Companion Labs, a consumer-focused AI startup specializing in interactive, local-language entertainment experiences, raised $2.5 million to create engaging, culturally resonant AI-powered content for Indian audiences.

Regional and Global Collaborations: Strengthening Sovereign AI Ecosystems

India’s deep tech ambitions are complemented by regional and international partnerships:

• Countries like Vietnam, Malaysia, and Singapore are investing heavily in AI talent development, infrastructure, and regional ecosystems, creating a sovereign AI landscape that synergizes with India’s efforts.

• The India AI Impact Summit 2026 is poised to serve as a regional milestone, fostering knowledge exchange, interoperability standards, and cross-border innovation—key to integrating India into a regional AI ecosystem.

• Singapore remains a critical hub for Indian and Chinese firms; for example, Meta’s acquisition of Manus AI in Singapore enhances regional technology and talent networks.

• Major investments like Qualcomm’s $150 million are advancing 5G, IoT, and AI hardware development, further integrating India into global supply chains and contributing to the establishment of indigenous standards.

Emphasizing Ethical AI, Trust, and Societal Inclusion

As India accelerates its deep tech journey, ethical AI, trustworthiness, and societal safeguards have become integral:

• Recent amendments to India’s IT Rules now mandate content provenance and regulate deepfakes, ensuring ethical governance keeps pace with technological advances.

• Initiatives to retain and upskill talent focus on women, marginalized communities, and regional talent pools, fostering inclusive growth.

• Startups like MiAngel are developing trust frameworks for AI systems, emphasizing transparency, accountability, and societal trust—crucial as AI permeates sectors like healthcare, finance, and governance.

The Broader Outlook: Toward 2026 and Beyond

India’s strategic trajectory appears robust, with key pillars including:

• Indigenous hardware development: Establishing self-sufficient supply chains for semiconductors, space tech, and AI hardware.

• Sustained, long-term support: Maintaining predictable R&D programs and targeted sector incentives.

• Regional collaboration: Deepening partnerships with neighboring countries and global hubs to build a sovereign AI and deep tech ecosystem.

• Addressing talent and governance challenges: Focusing on talent retention, inclusive access, and ethical frameworks to sustain momentum.

Current Status and Implications

India’s deep tech ecosystem in 2024 stands at a pivotal juncture. The confluence of strategic policies, record investments, infrastructure expansion, and international collaborations is laying the groundwork for India to lead the next wave of frontier technology development. The nation’s emphasis on indigenous hardware, trustworthy AI, regional integration, and societal inclusion signals a resilient, innovative, and globally integrated ecosystem.

Recent developments like Gushwork AI’s seed funding and the Southeast Asia data center boom underscore the expanding regional influence and the importance of sovereign digital infrastructure. The regional and global partnerships, combined with efforts to embed ethical AI standards, position India not merely as a consumer but as a creator and standard-setter in AI and deep tech domains.

As India charts its course toward 2026 and beyond, its focus on building indigenous capabilities, fostering long-term support, and ensuring inclusive, ethical growth will be critical. The country’s ongoing momentum suggests that 2024 may well mark the dawn of India’s next chapter in frontier innovation, establishing a self-reliant, globally competitive deep tech ecosystem ready to shape future technological paradigms.