Context:
The Government of India has recently relaxed eligibility norms for deep tech startups to access financial assistance from the Department of Scientific and Industrial Research (DSIR).
Background:
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- The DSIR, functioning under the Ministry of Science & Technology, provides financial assistance of up to ₹1 crore to eligible startups under the Industrial R&D Promotion Programme (IRDPP). Earlier, startups were required to demonstrate sustainability and commercial viability for at least three years to qualify for this support. This condition restricted access for many early-stage deep tech startups.
- Deep tech startups—working in areas such as artificial intelligence, biotechnology, advanced materials, and clean technologies—typically require longer research and development cycles before achieving market readiness. As a result, the earlier eligibility norms often excluded innovative firms at critical early stages of development.
- The DSIR, functioning under the Ministry of Science & Technology, provides financial assistance of up to ₹1 crore to eligible startups under the Industrial R&D Promotion Programme (IRDPP). Earlier, startups were required to demonstrate sustainability and commercial viability for at least three years to qualify for this support. This condition restricted access for many early-stage deep tech startups.
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Key Policy Changes:
The key reform announced involves the removal of the three-year existence requirement for accessing DSIR funding. Under the revised norms:
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- Startups are no longer required to demonstrate a minimum three-year operational track record to be eligible for financial support under the IRDPP.
- Financial assistance of up to ₹1 crore will continue to be available to eligible deep tech startups.
- Startups must still meet evaluation criteria linked to technological maturity, ensuring that funding decisions are based on innovation potential rather than the duration of existence.
- Startups are no longer required to demonstrate a minimum three-year operational track record to be eligible for financial support under the IRDPP.
Significance of the Move:
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- Boosting the Innovation Ecosystem: By removing the rigid three-year requirement, the government has lowered entry barriers for early-stage deep tech startups, enabling access to crucial early-phase funding for research, development, and commercialisation.
- Complementing Broader Support Mechanisms: The reform complements the ₹1 lakh crore Research, Development and Innovation (RDI) Fund, which primarily supports startups with advanced technological readiness, while this measure addresses the needs of nascent innovators.
- Encouraging Diverse Participation: Expanded access to funding is expected to promote greater participation from first-time entrepreneurs, academic spin-offs, and high-risk, high-reward innovators who may otherwise struggle to meet long-tenure eligibility criteria.
- Boosting the Innovation Ecosystem: By removing the rigid three-year requirement, the government has lowered entry barriers for early-stage deep tech startups, enabling access to crucial early-phase funding for research, development, and commercialisation.
Conclusion:
The Centre’s decision to relax DSIR funding norms represents a significant policy shift aimed at strengthening early-stage innovation in the deep tech sector. Eliminating the three-year viability requirement will allow startups to access critical financial support sooner, accelerating research, development, and commercialisation. The move underscores the government’s commitment to enhancing India’s global innovation competitiveness and building a robust ecosystem for technology-driven entrepreneurship.
