The next chapter of India's growth will not be written by more startups delivering existing products faster. It will be written by founders who create something the world has never seen before.
India's startup story is genuinely remarkable. From under 500 recognised startups in 2016 to over 200,000 today, the country has built one of the largest entrepreneurial ecosystems on the planet in under a decade. Venture capital followed, and these startups raised over $160 billion since.
Looking honestly at where capital has gone, and more importantly where it has not, the answer is clear: India has built a very prominent distribution ecosystem. Capital largely flowed to businesses that were brilliant at taking existing technology and delivering it to a billion people faster and cheaper. That is not nothing. But it is also not innovation on a global scale. Global innovation leadership requires the creation of fundamentally new technologies, scientific breakthroughs, and intellectual property that the rest of the world seeks to adopt.
The numbers reflect both progress and the scale of the challenge ahead. In 2023, just 5% of Indian startup funding went into deeptech sectors. By 2025, that number had climbed to roughly 21%, a meaningful shift that reflects growing investor conviction in hard technology. But the work is far from done. In China, deeptech captured 38% of all VC funding in 2024, up from just 10% in 2017, a compounding, deliberate national bet, not a one-cycle trend.
Meanwhile, India's R&D spending as a share of GDP sits at roughly 0.64%, against China's 2.68% and the United States' 3.47%. The private sector contributes just 36% of that already-thin number; in the US and China, private R&D contributions exceed 70%.
These are not incidental gaps. They are structural ones. It reflects a decade of systematically underfunding the hardest problems.
Consider where the world is headed. Climate technology, synthetic biology, and advanced materials are not just sectors, they are civilisational bets. No country has yet established a decisive, compounding lead in any of them. That is unusual. In semiconductors, the US and Taiwan have a multi-decade head start. In AI, concentration is already visible. But in the emerging biology-driven economy and in climate infrastructure, the field is still open.
India's bioeconomy has grown from $10 billion in 2014 to over $165 billion in 2024, and this is expected to grow to $300 billion by 2030, a genuine signal of latent potential. We are the pharmacy of the world, the largest vaccine producer globally, and home to a growing network of research institutions.
Synthetic biology, engineering biological systems to produce materials, medicines, and fuels, is a field where India's combination of scientific talent, cost advantage, and manufacturing base could translate into real global leadership. The government's BioE3 policy, launched in 2024, the creation of a National Biofoundry Network, and the consistent efforts put in by BIRAC, ICMR, Biotech incubators, and Deeptech grants/funds, are early, encouraging signals for the ecosystem.
Climate technology tells a similar story. India will be among the most consequential climate markets of the next thirty years, both as a country facing severe climate exposure and as one that needs to build enormous clean energy, water, and food infrastructure to serve a population approaching 1.6 billion.
The solutions to India's climate constraints, if they work here, will work everywhere. That is a powerful innovation platform. But only if our startups are building the technology, not just deploying imported versions of it.
These businesses created real jobs, real GDP, and real consumer value. But they did not create IP. They did not produce technology that other countries license from us. They did not make India a net exporter of invention.
Venture capital will play a critical role in enabling this transition. Patient capital – capital willing to wait five to ten years for technologies to mature, must become far more available to deep-tech founders. That requires different fund structures, different return expectations, and, frankly, a broader acceptance that breakthrough innovation often follows timelines that do not fit traditional venture models.
The government has begun to move in the right direction. The Startup India Fund of Funds has deployed over Rs 21,000 crore into startups since 2016, and the Union Budget 2025 followed with a fresh Rs 10,000 crore FoF 2.0, with a carve out for Deeptech and Advanced Manufacturing.
These are the right moves, and they need to be expanded, not just executed. Patient capital at scale only works if the funds it backs are genuinely willing to take technology risk, not just back safer bets wearing a deeptech label.
India has already built remarkable infrastructure for helping ideas scale. The harder and more consequential task now is creating the conditions for breakthrough ideas to originate here. In many of the defining sectors of the next two decades from synthetic biology to climate technology the global competitive landscape remains open. No country has yet established an insurmountable lead.
That window of opportunity will not remain open indefinitely. The choice before India is whether it becomes a nation that adopts the technologies of the future, or one that invents them.
–by Shubham Jhuria, Cofounder & CFO, Aeravti Ventures
Original Article
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