Startup India rules updated: Deep tech firms included and eligible for benefits for up to 20 years

India has updated its Startup India framework to formally include deep technology firms, offering them a longer recognition window and a separate set of eligibility rules aimed at research-intensive businesses.

Moneycontrol reported that the Department for Promotion of Industry and Internal Trade (DPIIT) issued a gazette notification on February 4 creating a distinct category for deep tech startups, acknowledging their longer development timelines and higher capital needs.

Under the revised rules, startups recognised as deep tech entities will be eligible for benefits for up to 20 years from the date of incorporation, compared with the 10-year recognition period applicable to other startups. The turnover ceiling for deep tech firms has also been raised to Rs 300 crore, while the limit for regular startups remains unchanged at Rs 200 crore.

The notification takes effect immediately and replaces the previous startup definition issued in February 2019.

For the first time, the government has clearly defined what qualifies as a deep tech startup. According to the notification cited by Moneycontrol, such firms must build solutions rooted in new scientific or engineering knowledge, demonstrate a high proportion of spending on research and development, and own — or be in the process of developing — significant novel intellectual property intended for commercialisation.

The broader startup definition remains intact. Eligible entities must be incorporated or registered in India as a private limited company, partnership firm, limited liability partnership or cooperative society, and be focused on innovation or scalable business models with potential for employment and wealth creation.

Recognition will continue through the DPIIT portal, with deep tech applicants required to provide additional documentation to demonstrate compliance with the prescribed criteria. Exit conditions have also been clarified. Regular startups will lose recognition after 10 years or if turnover exceeds Rs 200 crore in any financial year, while deep tech firms will cease to qualify after 20 years or upon breaching the Rs 300 crore threshold.

The revised framework also retains access to income-tax exemptions under Section 80-IAC of the Income-tax Act, subject to certification by the Inter-Ministerial Board. At the same time, the government has tightened restrictions on how recognised startups may deploy funds, barring investments in residential real estate, speculative assets or non-core financial activities during the recognition period.

The policy shift signals a more targeted approach as India seeks to support research-driven ventures in areas such as advanced manufacturing, artificial intelligence, biotechnology and clean energy, sectors where innovation cycles often extend well beyond a decade.