Deeptech startups need govt support and policy push

There is a very strong desire by the Government of India to make India atmanirbhar (self-reliant). One of the key ways for this vision to succeed is enablement of startups to deliver some of the products required to fructify this.

There are green shoots that give hope. Very good founders with PhDs and deep domain experience are venturing out to build these products. There are early-stage VCs willing to stay committed and fund these founders. Most importantly, the government has been a big enabler of capital through the Fund-of-Funds and is thinking about an allocation of Rs 10,000 crore for deeptech and sciences. These are great signs.

However, an area that needs serious improvement is ease of doing business and market entry. Startups are always constrained with respect to capital, time, market, and talent. Founders can manage many things, but they need serious help in ease of doing business and market entry.

Unlike software products and services that India has built, which are comparatively easy to sell outside of India, it is different in the case of deeptech solutions. There is a need to prove product capability and effectiveness within India before we can even start to think about selling globally. There is no doubt that these deeptech startups have the focus to sell their products globally, but it is absolutely imperative for them to prove their products in India first.

For this, the government must take a few steps. First, it must simplify the rules for piloting these products in government institutions. Defence has started doing this effectively through the iDEX programme, and this is commendable. The same vigour must be exhibited in all other government institutions.

We have the tendency to apply the rules that are applicable to medium and large companies to startups as well. This must change. For startups, there must be a path for fast access for pilots, where there is no necessity to seek approvals from various government institutions. There have been instances wherein startups have had to wait for more than six months to get a pilot approved or start a drug trial. This is a death blow to startups as time is of the essence.

There has to be a policy to create a sandbox across government institutions to cut red-tape down to zero. Scrutiny is understandable in the case of drug development or in instances where human lives are at stake. However, even in these cases, we need mechanisms to reduce the time for approvals. We need to cut down the wait time for clinical trial approvals from months to a few weeks, without compromising on quality.

Secondly, there must be policy to help deserving startups in revenue generation. For deeptech and science startups, the potential for the government being the first customer is quite high. The policy has to mandate buying from startups, if they meet the quality criteria. There are possibilities of misuse of this policy, but the overall gain will mask the losses.

Many countries have achieved technical capability and prowess because of the strong support and policy of their governments. Many PSUs in India have a policy to buy 20% of goods and services from India domiciled companies, and this is very helpful in building self-reliance. We need more of this.

Private enterprises should also be incentivised to buy from Indian domiciled startups.

Thirdly, there has to be a 10-15-year vision to develop talent in support of more PhDs who are critical for deeptech startups. It is very unfortunate that, in India, there a very few private enterprises and government institutions that can hire PhDs. Invariably, the only option for a PhD is to get into academics. This doesn’t work, and we need to address this on war footing. This is, unfortunately, a mid- to long-term horizon issue, and organisations like ANRF (Anusandhan National Research Foundation) should be addressing this.

There is a strong desire within the entrepreneurial community to build deeptech startups. However, this requires the government to offer serious policy support and enable ease of doing business.

The author is Founder & Managing Partner, Ideaspring Capital.