India’s startup coverage has quietly been rewritten for an extended race. By extending recognition for deeptech corporations to twenty years and elevating turnover thresholds, the federal government has acknowledged a primary fact that financiers have lengthy struggled with: superior {hardware} and industrial applied sciences mature on timelines very totally different from digital platforms.
This shift issues as a result of it reframes what success seems like for deeptech corporations: not as fast exits, however as sustained functionality constructing.
The coverage sign arrives at a second when India’s deeptech sector is not outlined solely by experimentation. Funding momentum has been regular, with about $1.6 billion in investments in 2024 and continued exercise by way of 2025. However the availability of capital just isn’t the identical as its suitability. The extra binding constraint lies in how these companies are financed relative to the time required to turn out to be globally aggressive producers.
Shifting from prototype to licensed manufacturing sometimes takes 5 to seven years in superior manufacturing. But most monetary analysis frameworks nonetheless assume three-year return cycles formed by software program economics. When boards apply these horizons to deeptech manufacturing, the chance just isn’t underinvestment in innovation, however underinvestment in scale-readiness.
From startup coverage to industrial technique
The extension of startup timelines has additionally been strengthened by industrial coverage. Finances 2026 marks a transition from fragmented incentives in direction of a extra built-in manufacturing push. The Electronics Elements Manufacturing Scheme outlay has been expanded considerably, whereas India Semiconductor Mission 2.0 now extends past fabs to tools, supplies, and full-stack IP design.
Most importantly, Finances 2026 allotted ₹20,000 crore in direction of the ₹1 lakh crore Analysis, Improvement and Innovation (RDI) Fund launched in November 2025. In contrast to conventional incentive schemes, the RDI Fund is structured to supply long-term financing, fairness, and grants—express recognition that deeptech capital structure should match prolonged growth timelines.
For producers, these measures change the character of economic danger. Import dependence is being changed by execution danger. Capital is now being invited into long-gestation manufacturing property somewhat than short-cycle meeting. That makes monetary structure decisive. What’s going to decide outcomes just isn’t the presence of incentives, however whether or not capital is deployed to transform engineering functionality into licensed, repeatable manufacturing.
For CFOs, this brings funding horizon design, capital self-discipline, and supply-chain technique to the centre of the expansion dialog.
Scaling {hardware} requires a special monetary rhythm
The monetary problem in deeptech manufacturing turns into clearest when utilized to actual industries. In capital-intensive sectors, the journey from prototype to secure business output is pushed much less by market demand and extra by engineering validation, provider qualification, and manufacturing studying curves.
India’s UAV sector illustrates this properly. Whereas the market is projected to increase considerably over the approaching decade, export competitiveness will rely much less on headline progress and extra on sustained funding in manufacturing high quality, software program–{hardware} integration, and resilient element ecosystems. But most monetary fashions proceed to imagine three-year return cycles.
This mismatch in timelines is the place many succesful corporations lose momentum. When capital is structured for early exits somewhat than industrial maturity, engineering depth and manufacturing self-discipline endure. Monetary analysis frameworks should subsequently evolve from revenue-first logic to capability-first logic, recognising longer gestation cycles and sustained funding in high quality and indigenisation.
Capital allocation that builds functionality
Boardrooms and long-horizon traders are starting to rethink how worth is outlined in manufacturing-led innovation. Among the most decisive property, similar to take a look at infrastructure, system integration depth, provider readiness, and certification pathways, don’t at all times register clearly in quarterly financials, but they decide whether or not scale is possible in any respect.
In unmanned techniques, world competitiveness has come not from remoted breakthroughs, however from sustained funding in manufacturing self-discipline and element ecosystems. When funding is directed towards sturdy functionality somewhat than short-term output, organisations enhance scale readiness, product reliability, and long-term credibility in export markets.
As procurement shifts in direction of outcome-based measures similar to reliability and lifecycle efficiency, this type of capital allocation turns into commercially viable, not simply technically sound. For Indian producers, this creates a strategic opening: corporations that make investments early in sturdiness and lifecycle readability can differentiate on predictability and belief, not solely on headline efficiency.
Provider ecosystems as a strategic monetary lever
India’s progress in deeptech manufacturing will rely closely on the maturity of its provider base. Advanced programmes transfer sooner when distributors evolve alongside OEMs, supported by predictable demand and long-term engagement.
Coverage path more and more helps this shift. MSMEs are being positioned as long-term manufacturing companions by way of fairness help underneath the SME Development Fund, expanded backing for the Self-Reliant India Fund, and measures similar to necessary TReDS utilization and broader credit score ensures. These enhance cash-flow stability on the provider tier however don’t eradicate execution danger.
For finance leaders, this reframes provider relationships as strategic monetary selections. Supporting operational upgrades, offering multi-year demand visibility, and selectively co-investing in course of enhancements can enhance supply predictability and cut back exterior dependency. That is significantly vital in defence and electronics manufacturing, the place multi-tier provide chains decide scale and export readiness, and the place delays of 18 to 36 months in reaching certified manufacturing typically matter greater than element value.
The CFO’s function in India’s deeptech future
India already has the technical depth and coverage backing to steer throughout a number of deeptech verticals. What stays is the tougher process of constructing monetary self-discipline that matches the persistence these applied sciences require.
CFOs sit on the centre of this transition. Selections on capital allocation, funding length, and supply-chain design will form outcomes over the following decade. The path is obvious: prolong {hardware} funding analysis cycles past typical three-year home windows, align board metrics with capability-building milestones somewhat than quarterly income alone, and deal with provider ecosystems as strategic investments somewhat than value centres.
If these selections are made intentionally, India’s deeptech sector can transfer from promise to sustained world presence. The chance is seen; disciplined monetary management will decide how totally it’s realised.
The writer is CFO, ideaForge Know-how.
(Disclaimer: The views and opinions expressed on this article are these of the writer and don’t essentially replicate the views of YourStory.)
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