The Indian deep tech ecosystem has already begun treating 2026 as a delivery deadline. Over the next year, public funding, industrial policy and private capital are expected to converge in ways that could determine whether the country finally moves deep tech out of laboratories and into live operations.
Investors, founders and enterprises agree on one thing: the transition from science to services will not be decided in whitepapers, but on factory floors, warehouses, and supply chains.
But for any ecosystem to roar to life, it needs a spark.
In November, the union government launched the ₹1 lakh crore Research, Development and Innovation (RDI) Scheme Fund to boost private sector R&D in deep tech, AI, and quantum energy. The fund is designed to reduce risk for high-gestation technologies such as semiconductors, AI, robotics, and advanced manufacturing by offering long-term capital rather than short funding cycles, channeled through Anusandhan National Research Foundation.
“The government is actually providing capital for startups. It’s providing capital for venture capitalists,” Sriram Viswanathan, founding managing partner at Celesta Capital, told AIM. “That’s kind of the tailwind you need for an ecosystem to develop.”
Viswanathan argued that patient capital only works if domestic demand exists alongside it. “You cannot expect to only have international or export-related opportunities. You have to become self-reliant,” he said, pointing to procurement and industrial adoption as the missing links.
Celesta in collaboration with other global and Indian venture capitalists, including onboarding NVIDIA, launched the India Deep Tech Alliance committing ₹7500 crores.
What remains uncertain is whether India can bridge the long-standing gap between research and commercial deployment.
From Research to Assembly Line
For early-stage investors like Ankit Kedia, founder and lead investor of Capital A, the bottleneck is not a shortage of innovation but the absence of manufacturing pathways. “You can be a research company for only a certain amount of time,” Kedia said in an exclusive conversation. “In the VC world, the scale will come from manufacturing.”
Capital A’s Fund II, with a $50-million corpus to fund manufacturing, deep tech, climate and fintech startups, focuses on taking products “from the lab to the shop floor”, with a longer view on timelines. “You have to give it a minimum of three years to come to the shop floor and then three to six years to scale,” he said. Shorter cycles, he added, do injustice to the manufacturing industry.
Sunil Shekhawat, founder and CEO of deep tech enablement platform and accelerator SanchiConnect, agrees. “If something can be developed in 18 months, that needs to be questioned.” In his view, the real test is the ability to replicate and the time to commercial maturity.
This thinking aligns with the government’s own timelines. India’s semiconductor push, under the India Semiconductor Mission, has repeatedly referenced 2026 as a north star for establishing meaningful domestic capacity across design, packaging, and manufacturing.
While large fabs remain capital-intensive, policymakers have signalled that design-led and fabless startups are expected to mature alongside infrastructure build-out.
Yet the middle layer remains fragile. Many MSMEs operate between proof-of-concept and industrial scale, unable to attract venture funding or bank credit. “They can’t scale up exponentially,” Kedia said. “That layer in between is protecting the entire middle economy of India.”
Beyond the Metros
Bridging that gap increasingly depends on ecosystem infrastructure rather than individual capital cheques. SanchiConnect’s Shekhawat said the challenge is not matchmaking but proximity.
SanchiConnect brings together founders, corporate mentors, investors, and incubators, many of whom are outside major metros. Over three years, the platform has mobilised more than ₹250 crore into early-stage deep tech companies. “70% of the people are from Tier 2 cities,” Shekhawat said.
That geographic spread matters, as manufacturing capacity does not cluster as software talent does. It also aligns with state-level skilling and industrial programmes expected to mature through 2026, particularly in electronics, drones, and advanced manufacturing.
Enterprises Push Adoption
While investors debate gestation, enterprises are already deploying deep tech in frontline operations. Zebra Technologies, which works across logistics, manufacturing and retail, sees India moving from pilots to scale.
“Over the past two years, we’ve already seen customers transition from piloting emerging technologies to deploying them at scale across factories, warehouses and retail networks,” said Subramaniam Thiruppathi, director for India and the subcontinent at Zebra Technologies.
By 2026, Zebra expects AI to be embedded into everyday decision-making for frontline workers.
According to an IDC-UiPath study, 40% of Indian organisations have implemented agentic AI and another 50% are planning to do so by 2026. Much of this shift relies on on-device intelligence rather than cloud dependence—a response to inconsistent infrastructure.
This enterprise momentum mirrors the government’s policy calendar. The India-AI Impact Summit, scheduled for February 2026, is positioned as a national forum to align policy, enterprise adoption and startup deployment around AI.
Pre-summit accelerator programmes are already underway, signalling that 2026 is being treated as an execution year rather than just another year for deliberation.
Unresolved Constraints
Despite policy momentum, structural gaps persist. Hardware startups still rely heavily on imported components, a challenge shaped by cost, certification, and access. The government’s extension of the Import Management System for IT hardware until December 2026 reflects this tension between domestic manufacturing ambition and near-term dependence.
Kedia traces the problem back to exposure. “If we are able to expose the specifications, the high-quality expectations, I’m sure MSMEs will make the effort,” he said. Without that visibility, localisation remains slow.
Viswanathan framed the issue more bluntly. “Most successful companies are ‘overnight successes’ in ten years,” he said. “What happens in the middle pretty much defines it.”
That middle is where 2026 will be tested. If RDI capital reaches companies on time, enterprises continue pulling deep tech into operations, and manufacturing capacity grows beyond policy announcements, India may finally narrow the gap between ambition and execution.
If not, 2026 will pass as another milestone on paper. The difference this time is that the shop floor is no longer waiting quietly.
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