UPSC often frames questions that go beyond statistics and schemes. It asks for structured analysis and forward-looking suggestions—like in 2023, when it asked about the “status of digitalization” and “problems faced.” Aspirants usually list schemes or general trends but miss the deeper linkages—like how a cultural fear of failure delays innovation, or how India’s startup boom (e-commerce, fintech) doesn’t mean we’re progressing in deep tech (see “Startup Focus Misaligned” or “Too Much Red Tape”). This article fills those gaps. It goes beyond headlines and gives you well-organized micro-themes—like “Low R&D Spending” or “Policy Myopia”—along with real examples (e.g., China investing $800 billion through ‘Made in China 2025’, while India’s 10-year spending is about $160 billion). That’s exactly how to write a GS3 answer with depth. One very special feature of this article is how it brings both policy and culture into focus—most pieces stop at blaming the government, but this one asks harder questions: Are we, as a society, afraid of long-term risk? (See “Cultural Aversion” section). This dual lens—of state and mindset—helps aspirants develop a sharper, more original analysis.
This article examines India’s digitalisation and innovation challenges through both policy and cultural lenses. UPSC often asks questions that go beyond listing schemes, as seen in the 2023 GS3 paper on the status and problems of digitalisation. Aspirants tend to focus on surface-level points, missing deeper themes like the gap between startup growth and weak deep tech innovation.
The article addresses this by offering focused sections such as “Low R&D Spending,” “Policy Myopia,” and “Cultural Aversion,” supported by real comparisons like China’s $800 billion investment versus India’s $160 billion over a decade. It also highlights how fear of failure and excessive red tape slow progress. This structure helps aspirants write answers that are analytical, balanced, and grounded in real-world examples.
PYQ ANCHORING
- GS 3: What is the status of digitalization in the Indian economy? Examine the prob lems faced in this regard and suggest improvements. [2023]
MICROTHEMES: Digitalization of Economy
India’s startup scene is buzzing—with unicorns popping up and young entrepreneurs taking bold steps. But when it comes to cutting-edge technologies like AI, semiconductors, or biotech, China seems far ahead. That’s because China has poured years of steady money, support, and planning into building its deep tech sector. Recently, Commerce Minister Piyush Goyal pointed out that Indian startups are still not focusing enough on advanced tech. So, the big question is: Can India really close this gap without the same kind of heavy government support that China gives?
Can India Catch Up with China in Advanced Tech Without Big Government Funding?//MAINS
India’s startup scene is growing fast, but we’re still behind China in areas like AI, biotech, and semiconductors. China has moved ahead by investing heavily and consistently in advanced tech. This raises an important question: Can India close the gap without matching that kind of government support?
| What Needs to Happen | Can India Still Catch Up Without It? | Examples |
| 1. Government Spending on R&D | Hard to compete without stepping it up | China spends more than 3x what India does on research. Indian labs often lack funding. |
| 2. Private Companies Doing More R&D | Only if Indian businesses start thinking long-term | Chinese tech giants like Huawei invest heavily in R&D; Indian IT firms mostly don’t. |
| 3. Patient Funding for Risky Ideas | Not likely without changing how funding works | Indian investors want quick returns—deep tech needs years of development. |
| 4. Colleges Working with Startups | Needs a big push for real impact | India has world-class institutes, but few tech companies grow out of them. |
| 5. Keeping Top Talent at Home | Only if we offer strong reasons to stay | Many brilliant Indian scientists move abroad for better opportunities. |
| 6. Better Policies and Patent System | Yes, this can be fixed without huge money | Faster patents, clear rules, and startup-friendly laws can make a big difference. |
| 7. Smart Global Collaborations | Yes, if India chooses its partners well | Tech deals with countries like Japan and the US can help India leapfrog in some areas. |
India can work toward closing the tech gap, but it won’t happen by accident. We don’t need to copy China’s model, but we do need clear priorities—stronger support for risky tech ideas, better use of our scientific talent, and smart partnerships across the world. With the right moves, India doesn’t need to spend like China to catch up—it just needs to think and act smarter.
Challenges hindering the growth of deep tech startups in India
| Challenge | What’s the Problem in Simple Terms? | Real-World Context or Example |
| 1. Low R&D Spending | India doesn’t invest enough in research. Countries like the US and China spend much more to develop cutting-edge tech, and India’s efforts are modest in comparison. | China put in over $800 billion through ‘Made in China 2025’; India spent about $160 billion between 2014–2024. |
| 2. Takes Too Long to Pay Off | Deep tech startups need time to grow, but Indian investors often want quick profits. This discourages work on serious tech problems that take years to solve. | VCs in India prefer fast-growing apps over something like space tech or biotech that could take 10+ years. |
| 3. Talent Leaves the Country | We produce lots of engineers, but few specialize in advanced tech—and many top minds leave India for better opportunities abroad. | Indian talent powers companies like Tesla and OpenAI; Aravind Srinivas, an Indian, co-founded Perplexity AI in the US. |
| 4. Hard to Turn Ideas into Products | Even when Indian startups invent something, turning that into a successful product is tough. There’s little support for testing, scaling, or getting help from universities. | Lack of ‘regulatory sandboxes’ and weak industry-academia ties slow down innovation from lab to market. |
| 5. Too Much Red Tape | Filing patents or working in new tech areas like drones or genomics is still complicated. Regulations are unclear, and bureaucracy slows progress. | Complicated IP laws and unclear rules mean startups face delays or give up altogether. |
| 6. USA & China Lead the Pack | America and China dominate advanced tech, leaving India far behind. China especially is moving fast in critical technologies. | China filed 38,000+ Gen AI patents (2014–2023); it leads in 57 of 64 key tech areas globally. |
| 7. Startup Focus Misaligned | Most Indian startups focus on e-commerce, delivery apps, or payments—not on big, breakthrough tech ideas. | India has 100+ unicorns, but few are like OpenAI or DeepMind that work on fundamental tech innovation. |
| 8. Weak Innovation Culture | India struggles to build an ecosystem where bold ideas thrive. Global rankings show we’re behind, and our universities don’t lead in cutting-edge research. | India ranks 39th in the Global Innovation Index (2024); China is 11th and has top research universities. |
Is India’s Tech Lag Policy-Driven or Culturally Ingrained?
India’s underperformance in advanced technologies like AI, semiconductors, biotech, and robotics—despite having a large talent pool—has raised tough questions. While government policy often gets blamed for limited R&D spending and poor infrastructure, there’s also a subtler but powerful issue at play: a cultural hesitation toward high-risk, long-gestation innovation. The gap between India and China in deep tech isn’t just about money or plans—it could be about mindset.
So how much of the gap can be explained by short-sighted policies, and how much stems from a cultural reluctance to take big technological bets?
Policy Myopia
| Point | Description | Example |
| 1. | Low Public R&D Spend – Insufficient long-term government investment. | India spends <1% of GDP on R&D; China spends ~2.4%. |
| 2. | Policy Incentives for Deep Tech – Lack of targeted support for core sectors. | No major push for sectors like semiconductors, biotech, or quantum tech. |
| 3. | IP Creation and Protection – Weak legal frameworks and poor enforcement. | Slow patent clearances, minimal startup IP protection. |
Cultural Aversion
| Point | Description | Example |
| 1. | Startup Investment Focus – Preference for low-risk, fast-return ventures. | Majority of VC funding goes to consumer apps, fintech, edtech. |
| 2. | Failure-Tolerant Ecosystem – Failure is discouraged or stigmatized. | Entrepreneurs avoid deep tech due to fear of public/financial failure. |
| 3. | Academic Mindset & Output – Lack of entrepreneurial mindset in academia. | Very few IIT/IISc startups or faculty-led tech ventures. |
| 4. | Risk Appetite in Education & Culture – Security over experimentation. | Students trained to be job-seekers, not risk-takers or innovators. |
The advanced technology gap is not just about weak policies—it’s equally about mindset. While policy failures in funding, infrastructure, and IP systems are clear obstacles, India must also overcome a deep-seated cultural fear of risk, failure, and long-term commitment to complex innovation. Bridging this gap will need not just smarter policies, but also a cultural shift in how India views risk, research, and entrepreneurship.
Government Initiatives //PRELIMS
1. Policy reforms in high tech sectors: Government has taken several initiatives in high tech sectors to promote innovation & private sector participation as well as to boost entrepreneurship & self-reliance for e.g. Indian Space Policy 2023, liberalized Drone Rules 2024, Draft National Deep Tech Startup Policy (NDTSP) 2023, Nuclear Energy Expansion Policy 2024 etc.
2. India Semiconductor Mission & Design-linked Incentive Scheme: Government has allocated Rs 76,000cr to build FAB capacity & design ecosystems.
3. IndiaAI Mission: In 2024, the Union Cabinet has approved Rs 10,000cr for IndiaAI Mission – which aims to establish a comprehensive AI ecosystem.
4. National Supercomputing Mission: Aim is to build a network of 70 high-performance computer facilities with a cumulative capacity of 45 PF (Petaflops).
5. National Quantum Mission: Aims to put India among the top 6 leading nations involved in the R&D in quantum technologies.
6. Deep Tech Fund: Government has recently announced Rs 10,000cr Deep Tech Fund of Funds as well as Rs 1000cr space tech venture capital fund with the aim to bridge the critical funding gaps & catalyzing innovations. These initiatives also send a strong signal to the private investment ecosystem that India is committed to playing the long game in advanced technology.
7. Innovation ecosystem: Govt has introduced policies like Atal Innovation Mission, NIDHI-PRAYAS, T-Hub, iCreate etc to foster innovation & entrepreneurship at early stages for inquisitive minds.
8. Slow but definite growth: Despite various challenges, India has seen pockets of deep tech startups success – supported by various government initiatives such as Space tech (Skyroot, Agnikul, Digantara), Robotics (Addverb, CynLR), Gene editing (CrisprBits), Quantum solutions (Qnu Labs), EVs (Ola, Ather) etc. As per NASSCOM, India’s 4000 deep tech startups attracted $1.6bn investment in 2024 – which is a 78% increase year-on-year.
Way forward
1. Increase R&D investments: USA is facilitating a $500bn AI initiative called Stargate, France is mobilizing $112bn in public & private investments towards AI development. China has set up a $138bn fund for accelerating growth in emerging technologies. Thus, India is also required to follow their steps.
2. Increased & patient capital: Attracting more venture capital with a long-term perspective, as well as government-backed funds specifically for deep tech, is crucial. Loan guarantees and other mechanisms to reduce investor risk can help.
3. Industry-Academia linkage: A close collaboration between India’s premier universities & research institutes like IITs, IISc and deep-tech startups is needed. For e.g. India can take inspiration from USA’s Federal institutes like Defence Advanced Research Projects Agency & NASA to encourage bold innovations.
4. Education sector reforms: Reforms in the education sector are needed to build a framework for cutting-edge research & promoting innovation from the very beginning.
5. IPR Ecosystem: Providing robust IPR protection & speeding up the process of patent approval can also help in promoting deep tech innovations in India.
Deep tech startups are essential to India’s technological sovereignty, economic resilience, and strategic autonomy. By promoting deep tech entrepreneurship, streamlining regulatory processes, enhancing IP protection, India can unlock the immense potential of its deep tech startups & position itself as global leader in this transformative space.
#BACK2BASICS : About Deep tech Startups
What Are Deep Tech Startups?
Deep tech startups are companies built on real science and hard technology—not just apps or marketplaces. They try to solve big, complex problems using cutting-edge research in fields like AI, robotics, biotech, quantum computing, materials science, etc.
Unlike food delivery or e-commerce startups, deep tech companies aren’t focused on quick convenience. They take longer to build, need more money upfront, but can completely change industries or even society if they succeed.
A Simple Framework: The 5-Layer “DEEP” Model
| Layer | What It Means | Example |
| D – Discovery | Rooted in scientific or engineering discovery | A new material that conducts electricity 10x faster |
| E – Effort & Time | Takes long to develop, test, and bring to market | Building a quantum computer or a new drug |
| E – Expertise-Heavy | Needs advanced knowledge, not just coding | A biotech founder decoding proteins |
| P – Problem-Solving Impact | Solves big, real-world problems that matter | A startup turning CO₂ into fuel |
Why Do Deep Tech Startups Matter?
- They build the future: Think GPS, CRISPR, ChatGPT—these came from deep tech.
- They create moats: Their science is hard to copy, unlike simple business models.
- They uplift countries: Nations that invest in deep tech become global leaders.
Quick Examples
| Startup | What It Does |
| SpaceX | Rockets and space exploration (advanced aerospace engineering) |
| Boston Dynamics | Robots that move like animals and humans |
| Ginkgo Bioworks | Programs cells like we program software |
| Agnikul Cosmos (India) | Building customizable small satellite launch vehicles |
| Log9 Materials (India) | Developing graphene-based energy and water solutions |
Significance of Deep Tech Startups
1. Drive innovation: Deep tech innovations form the basis for science & tech breakthroughs. They form the backbone of transformative industries. For e.g. Discovery of Penicillin by Alexander Fleming in 1928 ushered in the era of antibiotics & dramatically reduced the deaths from infections.
2. Economic & industrial impact: Deep tech innovations like GenAI can add $1 trillion to India’s GDP by 2030. According to the former NITI Aayog CEO Amitabh Kant, the cascading effects of deep tech innovations would be critical for India to become a developed economy. Deep tech startups are crucial for ushering in Industrial Revolution 4.0.
3. Strategic importance: Deep technologies are not only economic drivers, but are essential for developing self-reliance (Atmanirbharta) in critical sectors like defence, energy, healthcare etc. Developing & leveraging such deep tech innovations helps in providing a technological bulwark against geopolitical uncertainties & supply chain vulnerabilities for e.g. China developed DeepSeek AI to achieve technological independence from the West, particularly in the face of US-led restrictions on advanced semiconductors exports.
4. Solving societal challenges: Development of India-centric deep technologies can help in fueling innovations to provide solutions to India-specific problems like affordable & accessible healthcare or sustainable energy, language-based AI, North-South divide etc.
