As India looks to establish itself as the centre for deep tech and other emerging technologies, prominent figures in the technology industry, government, and the start-up ecosystem gathered in the national capital at Celesta Capital’s TechSurge programme. 

From United States Ambassador to India Eric Garcetti to the founder and manager partner of Celesta Capital Nicholas Brathwaite, the event saw several leaders address the potential and challenges of establishing deep tech ecosystem in India.  

The event also saw speakers instill confidence India due to rapid digital expansion, a vibrant tech workforce, and a thriving start-up ecosystem. Discussions at the event covered a wide range of topics, from nurturing the future leaders in deep tech in India to the opportunities in deep tech for both Silicon Valley and India.  

Betting On India 

Addressing the gathering, Ambassador Garcetti talked about India deep tech transformation and its connections with the US said. He said that India is shaping a distinct vision of technology, which fosters connections, instead of creating divisions.  

“When it comes to technology, I believe through India's leadership in the Global South and America's leadership among our allies in the developed world, we can actually translate to the world, our ambitions for the prosperity of our planet,” he said. 

Agreeing with the sentiment of Garcetti, Brathwaite confidently voiced his strong belief in India's talent reservoir within the realm of deep tech, refuting those who cast doubt on India's capabilities in this field. 

He said, “The first investment we made in India was a semiconductor company and that was because of the confidence that we had in the talent in India in the deep tech space. In fact, I remember talking to people back then, and they would tell us that India is not going to have a deep tech industry, it's all going to be services based and we disagreed with that.” 

Brathwaite said that Celesta Capital has made 15 investments in Indian start-ups so far with the belief of India’s potential to grow further. He highlighted the important role that venture capitalists (VCs) can have in connecting India and Silicon Valley in terms of knowledge and expertise. 

"One area where the synergy between India and the US, particularly Silicon Valley, can flourish is through the involvement of VCs, who can help in facilitating transfer of knowledge to unlock India's vast talent potential," he said. 

Resolving The Roadblocks 

Talking about the world’s perspective of deep tech being an alien or new concept in India, Celesta Capital’s Founding Managing Partner Sriram Viswanathan claimed that deep tech is not new to India and the evolution in the industry has been happening for quite some time. He added that the inherent curiosity has always been a part of India’s DNA, but there has not been enough encouragement to execute the vision properly.  

“There are many questions. How friction free are you going to make capital flows? How are you going to make taxation conducive for promoting certain industries? Why not consider certain key segments which can be exempted from taxes for promoting them. It is high time the government starts asking questions as to how we can accelerate deep tech,” Viswanathan asserted.  

He claimed that without flexible tax regulations, India can’t achieve the high-end goals it has in the field of semi-conductors despite support from VCs 

“You can’t shoot at the duck, you must shoot ahead of the duck because the things are changing so fast, there is no way India is going to be able to catch up to the leading-edge fabrication of semi-conductors in the next ten years. The goal should be to focus on areas where India can leap ahead,” he added. 

Commenting on this, Celesta Capital’s Managing Partner Arun Kumar shared his thoughts on the tax regulations that can increase opportunities that lie ahead at the government, founders and investors’ level. As far as R&D spends are concerned, every time the finance minister gets ready to presents the budget, the industry puts the wish list to enhance the tax ops associated with R&D. However, the opposite happens with the government cutting the tax ops stating that not enough private capital is being spent on research and development.  

“Seed funds help a start-up in the early stages; however, they need follow-up funds too for the growth so that you have the whole ecosystem. The government can help create this ecosystem. As Amitabh Kant also mentioned, you need a substantial fund of funds to fuel deep tech in India, which can then back stop venture capital funds,” Kumar said. 

Another underlying issue that comes with multiple tax regulations is that of investments and fundings. While the industry in US and EU are successfully drawing $35 billion worth of capital, Indian ecosystem is stuck at under $5 billion from some time now, which has started to concern the start-up community in India.  

However, Nicholas Braithwaite thinks that comparing India’s deep tech market to US’ deep tech market wouldn’t be fair as there are a lot of investors looking at the US market from a good time as compared to the new investors in India. He admitted that there are still a lot of apprehensions about geographical risks involved with India. 

“People still want to wait until they see some success. Celesta Capital and others are paving the way to success. Infact when we first invested in India, we were the first deep tech investor in India. And now there has been a substantial growth in VC’s and investors. However, deep tech is a little different. People jump in when it looks good and jump out when it's at a low. So, we shouldn’t worry much about India as we’re just getting started,” Braithwaite said.  

While investors and industry leaders insist on India being a land of opportunities, a lot will depend on how policymakers work on harnessing this potential through creating conducive environment for the deep tech ecosystem.