NEW DELHI, February 2026 — The Indian government has officially signaled the end of the “quick-fix” startup era. With the issuance of notification GSR 108(E), the Ministry of Commerce and Industry has fundamentally redefined what it means to innovate in India, shifting the focus from consumer apps to “Deep Tech” breakthroughs that take decades to mature.

For years, the Indian startup ecosystem was dominated by “Person A”—the entrepreneur who builds a coaching app or a delivery service, hits unicorn status in five years, and exits. Meanwhile, “Person B”—the scientist in a lab working on a cancer drug or a next-gen semiconductor—often faced “innovation death” because previous laws stripped them of startup benefits after just 10 years, long before their research could bear fruit.

The 20-Year Lifeline: A Strategic Shift

The new policy, driven by the DPIIT, introduces a massive extension specifically for Deep Tech startups. While standard startups retain their 10-year window, Deep Tech entities now have 20 years to prove their viability.

The financial ceiling has also been raised, allowing these firms to maintain startup status until they hit a turnover of ₹300 crore, up from the standard ₹200 crore. This “patient capital” approach acknowledges that true scientific progress doesn’t happen on a quarterly VC schedule.

From Bengaluru Hubs to Village Cooperatives

In a move described as a “silent revolution,” the definition of a startup has expanded beyond Private Limited companies and LLPs. For the first time, Multi-State Cooperative Societies are included.

This means innovation is no longer restricted to techies in hoodies in Bengaluru. A rural cooperative using AI to monitor soil health or cattle vitals is now legally a startup. This bridges the gap between “Digital India” and “Industrial India,” moving the needle from lifestyle apps to critical production systems.

Bridging the “Valley of Death”

Deep Tech involves “Technical Risk” rather than just “Market Risk.” A scientist might spend seven years just on prototypes and another eight on failed trials with zero revenue. Under old rules, the government would “cut the rope” while the scientist was still in this financial valley.

The 2026 policy acts as a life-support system for these 15–20 year cycles. It is a bold admission that for India to become a global power, it must stop being just a software exporter and start becoming an Intellectual Property (IP) owner.

Stopping the Brain Drain

By extending the horizon to two decades, India is sending a clear message to researchers at IITs and IISc: Stay here. Previously, the lack of long-term regulatory patience forced India’s brightest minds to move their labs to Singapore or the US. This policy aims to keep that “Deep Tech DNA” within Indian borders by promising state-backed patience.

The Challenge: Red Tape 2.0?

The shift isn’t without its risks. Critics warn that “Software as a Service” (SaaS) companies might try to wear a “Deep Tech mask” to exploit the 20-year tax holidays. The success of this pivot depends entirely on transparency. If the certification process is bogged down by bureaucracy, India risks falling into “Red Tape 2.0.” If it remains meritocratic, it marks the beginning of Startup 2.0.

Bottom Line

India is learning to be patient. By choosing to support a 20-year search for a cure over a 10-minute grocery delivery, the state is betting on the long-term gravity of science. Delivery apps can change your evening, but Deep Tech can change the century.