The AI initiative in India aims to offer financial backing and assistance to deep tech startups, as per specialists.

The government's initiative towards deep tech startups, through the recently launched India AI mission, is seen as a positive step by industry experts in fostering a favourable investment climate. This mission, aimed at accelerating research and development (R&D) in these startups, is anticipated to enhance innovation and cultivate new business models within the sector. With a budget allocation of Rs 10,372 crore over five years, the India AI Mission, approved by the Union Cabinet, dedicates nearly Rs 2,000 crore to finance deep-tech startups, specifically focusing on expediting R&D in these ventures.

The move is welcomed as it addresses a significant hurdle faced by deep tech startups in India, namely, the lack of adequate financial support, which has hindered innovation. Avi Dahiya, founder and CEO of Twyn, a deep tech enterprise SaaS startup, highlights the challenges faced by such startups due to the intricate nature of their projects, prolonged development cycles, and perceived risks, leading to repeated rejections.

Currently, there are approximately 3,000 deep tech startups in India, but less than 20% have managed to secure sufficient financial backing. While the allocated Rs 2,000 crore is considered a positive step in building a conducive investment environment, industry stakeholders emphasise the need for clarity in regulations and data sharing policies to further attract investors.

The India AI Mission is expected to encourage new corporate social responsibility initiatives to support deep tech startup R&D through technology business incubators (TBIs) and government-supported incubators. Additionally, the mission's emphasis on accelerating R&D in deep tech AI startups is anticipated to create more opportunities and foster the development of new business models, making R&D a necessity for competitiveness across sectors.

The approval of the India AI Mission aligns with the government's ongoing efforts to bolster innovation in the deep tech sector, evident from the Draft National Deep Tech Startup Policy introduced last year. The mission aims to position India as a global AI leader by democratising access to artificial intelligence through initiatives like creating an AI marketplace and facilitating collaboration within the AI ecosystem.

Furthermore, the mission presents opportunities for government departments to collaborate directly with startups on AI-related challenges specific to India. With proper funding and support, the number of AI startups in India is expected to surge significantly, reaching over 10,000 by 2030, according to industry estimates.