India’s New Startup Recognition Regime: Special Focus on Deep Tech Startups
Introduction
The Department for Promotion of Industry and Internal Trade (DPIIT) has issued a notification dated February 4, 2026 (“Notification”), in supersession of Gazette Notification No. G.S.R. 127(E) dated February 19, 2019, revising the framework for recognition of Startups and introducing specific provisions for Deep Tech Startups.
Overview of Startup and Deep Tech Startup Framework
A “Startup” means an entity, which is incorporated or registered in India as a private limited company, or a partnership firm, or a limited liability partnership, or a multi-state cooperative society registered with the Central Registrar of Cooperative Societies, or a cooperative society registered under any State or Union Territory Cooperative Societies Act, additionally it should be within ten years of its incorporation, with turnover not exceeding INR 200 crore, engaged in innovation or operating a scalable business model with employment or wealth creation potential.
The Notification expanded the startup definition to include “Deep Tech Startup”, which is focused on advanced scientific or engineering innovation, with high proportion of expenditure on research and development (R&D), creation of significant and novel intellectual property (IP), and longer development timelines. For entities recognized as Deep Tech Startups: (a) the eligibility period is extended to twenty (20) years from the date of incorporation or registration; and (b) the turnover threshold is increased to INR 300 crore in any of the financial years since incorporation or registration.
Further, the Notification mandates that Startups, including a Deep Tech Startup deploy funds primarily for core business and innovation activities, and restricts investments in real estate, loans, securities, luxury assets, and other speculative or non-productive activities, except in the ordinary course of business.
Conclusion
The Notification broadens the definition of Startups but also recognizes Deep Tech Startups, providing them extended timelines and higher turnover limits by doing so, it fosters innovation, R&D, and the creation of intellectual property. The Notification strengthens the startup ecosystem and promotes sustainable, technology driven growth in India.
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