Deep tech did not receive a specific mention in this year’s Budget, experts say
Founders expected clearer timelines or budgetary support via mechanisms like RDI
However, there were some key announcements like the launch of India's Semiconductor Mission (ISM) 2.0 for ₹1,000 crore.
The much-awaited Budget for the fiscal year 2026-27, that too on a Sunday, for sure, had all our eyes glued to the television.
In her speech, which lasted for more than an hour, the finance minister hardly spoke about the deep-tech space. Except for bits and pieces, say the launch of India Semiconductor Mission (ISM) 2.0 for ₹1,000 crore.
1 January 2026
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This comes in stark contrast to the government’s constant emphasis on the criticality of the sector in achieving India’s target of becoming a developed nation by 2047.
“Deep tech as a category did not receive a specific mention in this year’s Budget, despite its growing strategic importance,” says Anirudh Damani, director, Artha India Ventures, a family office with a venture capital arm.
Numbers point in the same direction. Take the IndiaAI mission, where the government allocated ₹2,000 crore last year, but was able to spend only ₹800 crore. As a result, this year, the Budget estimate for FY27 has been halved to ₹1,000 crore.
The same is the case with the Research, Development and Innovation (RDI) scheme which was launched to boost private sector-driven R&D. While the government targeted to spend ₹20,000 crore in FY26, it could spend only ₹3,000 crore. Despite this, RDI’s allocation has again been pegged at ₹20,000 crore in FY27.
The National Quantum Mission had a Budget Estimate (BE) of ₹400.65 crore last year, while the Revised Estimate (RE) stood at ₹477 crore. This year, the allocation has increased to ₹600 crore.
On the same lines, the outlay for National Supercomputing Mission is slashed to a mere ₹0.01 crore this year. The mission had a BE of ₹235 crore last year, which was revised upward to ₹490 crore for FY26.
“The Budget clearly focuses on long-term infrastructure and capital creation, which is important for India’s growth. But for start-ups in deep tech or climate-tech space, the impact is still mostly indirect. Efforts around RDI, semiconductor manufacturing, and infrastructure upgrades are positive steps for the ecosystem, though the real on-ground benefits of RDI are still early and yet to be seen,” says Jharna Saha, co-founder of deep-tech start-up Enlog.
However, some experts seem optimistic and argue to look beyond allocation. Lower allocation for the IndiaAI Mission should not be seen as a reduction in the government’s commitment to AI, they say. “The ₹1,000-crore allocation in Union Budget 2026 indicates that the government is tempering ambitious AI budgeting with practical implementation realities. It’s less about scaling back commitment to AI, and more about right-sizing funding to ensure efficient use of public resources and integrating AI more deeply into broader growth and innovation strategies,” says Nakul Kundra, CEO & co-founder of AI start-up Devnagri AI.
What About Indian Start-Ups?
One major announcement in the Union Budget that caught the attention of many was that the government’s proposed tax holiday until 2047 for foreign companies that provide cloud services to global customers using data-centre infrastructure in India.
Experts argue that while global technology companies rightly received tax holidays to build infrastructure in India, indigenous deep-tech innovators in energy, quantum, manufacturing, robotics and semiconductors receive no such equivalent fiscal support for IP development or procurement risk mitigation.
India's space-tech sector alone demonstrates the challenge where customers remain reluctant to shift from legacy systems to Indian-built technologies, says Pranav Pai, managing partner, of early-stage venture capital firm 3one4 Capital
"A structured procurement policy combined with safe harbour incentives for indigenous deep tech could have unlocked dozens of globally competitive companies," he adds.
Amid rising geopolitical tensions, deep tech and related technologies have become a flash point among countries in asserting their hegemony, a reality highlighted in the Economic Survey.
“[Global] trade is increasingly organised around blocs, capital flows are shaped by strategic and security considerations, access to technology is selectively restricted, and geopolitical risk premiums are embedded in economic decisions,” the Economic Survey said.
It argued for the country to become strategically indispensable by acquiring a critical place in the global supply chain through leveraging domestic manufacturing strength.
According to Enlog’s Saha, founders need faster execution, clearer pathways to deploy their solutions, and easier access to risk and growth capital. “The intent has been there for some time now, the next step is to turn policy vision into real, on-ground opportunities for start-ups.”
