Suggestions to DPIIT for building a sustainable deep-tech start-up ecosystem in India

Terms of use

Terms of Use

The use of this site and the content contained therein is governed by the Terms of Use. When you use this site you acknowledge that you have read the Terms of Use and that you accept and will be bound by the terms hereof and such terms as may be modified from time to time.

All text, graphics, audio, design and other works on the site are the copyrighted works of nasscom unless otherwise indicated. All rights reserved.
Content on the site is for personal use only and may be downloaded provided the material is kept intact and there is no violation of the copyrights, trademarks, and other proprietary rights. Any alteration of the material or use of the material contained in the site for any other purpose is a violation of the copyright of nasscom and / or its affiliates or associates or of its third-party information providers. This material cannot be copied, reproduced, republished, uploaded, posted, transmitted or distributed in any way for non-personal use without obtaining the prior permission from nasscom.
The nasscom Members login is for the reference of only registered nasscom Member Companies.
nasscom reserves the right to modify the terms of use of any service without any liability. nasscom reserves the right to take all measures necessary to prevent access to any service or termination of service if the terms of use are not complied with or are contravened or there is any violation of copyright, trademark or other proprietary right.
From time to time nasscom may supplement these terms of use with additional terms pertaining to specific content (additional terms). Such additional terms are hereby incorporated by reference into these Terms of Use.

Disclaimer

The Company information provided on the nasscom web site is as per data collected by companies. nasscom is not liable on the authenticity of such data.
nasscom has exercised due diligence in checking the correctness and authenticity of the information contained in the site, but nasscom or any of its affiliates or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this site. The information from or through this site is provided "as is" and all warranties express or implied of any kind, regarding any matter pertaining to any service or channel, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement are disclaimed. nasscom and its affiliates and associates shall not be liable, at any time, for any failure of performance, error, omission, interruption, deletion, defect, delay in operation or transmission, computer virus, communications line failure, theft or destruction or unauthorised access to, alteration of, or use of information contained on the site. No representations, warranties or guarantees whatsoever are made as to the accuracy, adequacy, reliability, completeness, suitability or applicability of the information to a particular situation.
nasscom or its affiliates or associates or its employees do not provide any judgments or warranty in respect of the authenticity or correctness of the content of other services or sites to which links are provided. A link to another service or site is not an endorsement of any products or services on such site or the site.
The content provided is for information purposes alone and does not substitute for specific advice whether investment, legal, taxation or otherwise. nasscom disclaims all liability for damages caused by use of content on the site.
All responsibility and liability for any damages caused by downloading of any data is disclaimed.
nasscom reserves the right to modify, suspend / cancel, or discontinue any or all sections, or service at any time without notice.

For any grievances under the Information Technology Act 2000, please get in touch with Grievance Officer, Mr. Anirban Mandal at data-query@nasscom.in.

New

See all

No notification found.

Suggestions to DPIIT for building a sustainable deep-tech start-up ecosystem in India

Garima Prakash

@GarimaP

January 25, 2022

Public Policy

359

NASSCOM submitted suggestions to the Department for Promotion of Industry and Internal Trade (DPIIT) to build a sustainable deep-tech start-up ecosystem that focusses on growing innovation in India and for India. Our suggestions fell under 6 buckets, as highlighted below:

Talent

We need to ensure our start-ups are able to find and retain the best talent in an increasingly competitive environment. Currently the gap between demand and supply of Digital Talent in India is more than 8X.

1. Enable startups leverage ESOPs as a tool to attract and retain talent. Currently, only 500 startups which are registered under IMB can use ESOPs effectively as they can avail the tax deferment (which is not a tax subsidy) benefits. The tax deferment option should be made available to all registered under DPIIT.
2. Expand the talent pool with focus on building an entrepreneurial mindset - A deep tech Accelerator Program aimed at talent development in tier2/3 cities.

Innovation for India: Encouraging deep tech startups to innovate for India

While India saw record $32 Bn in 2021, most of the funding were for start-ups solving for enterprise / consumers for India and the world. This is not a surprise given that most of the start up investment is coming from international VCs. Startups focused on solving real grass root problems in India do not get funding priority by most global VCs. This needs to be addressed:

1. Create a special clause, in existing start-up funds like Fund-of-Funds of SIDBI, to reserve funds for start-ups which are innovating for India specific problems in areas like agri-tech, rural development etc. Increase the focus on utilization of funds.
2. Government should harmonise capital gain tax on sale of unlisted shares issued by start-ups recognised by DPIIT. Long Term Capital Gains (LTCG) arising from sale of unlisted shares are taxed @ 20% for resident investors and @ 10% for non-resident investors, subject to relief if any under the tax treaty.
3. Drive focused mentorship program for startups which are innovating for Bharat to help them build business models for India

Procurement reforms to help Start-ups scale in India

The Government of India has exempted as a policy, start-ups from the otherwise stringent selection criteria, such as, prior experience, prior turnover and Earnest Money Deposits, subject to meeting of quality & technical specifications. However, this needs to be implemented in spirit.

1. Regularly publish procurement data and insights of Govt of India’s procurement from start-ups.
2. Greater market opportunities for Indian start-ups can be created by funding start-ups focussed on solving challenges faced by the Government and its agencies or departments. Each year, an expert committee with representatives from Government and subject specialists can pose various challenges and select startups which provide solutions for an initial grant and granting of project by government for implementation of the solution.

Encourage more innovation and IP in deep tech through Start-ups

Current R&D spent in India is around 0.6% of GDP and policy issues surrounding IP is a key bottleneck to grow investments in R&D:

1. Backlog of applications to obtain an IP through the fast-track process that DPIIT should be expedited and disposed on a priority basis.
2. Time bound reimbursement for patent application fees, to the tune of 75%, at the time of application of the patent, would drive a culture of innovation and filing of more patents.
3. A domain wise SOP document to be made available in the government portal for the start-ups to refer and understand the criteria to match to file the patent.
4. Reimbursements for Patent Cooperation Treaty (PCT) approved patents including search report costs.
5. Superclusters: Structured stronger connect between industry and startups. Government to provide matching grants to industry-led consortiums which will work on projects in high impact, high value areas. One of the key outcomes of these projects would be the generation of Intellectual Property rights and their positive impact on India.

Grow global thought leadership for “World class from India”

There is a need to brand India as a global hub and go-to geography for innovation, especially in the Deep-tech space.

The Global Innovation Challenge

1. Develop a platform to connect global enterprises with Indian start-ups, wherein, the enterprises can pose challenges, Indian start-ups can complete for the best solution and the winner will receive Proof of Concept (POC)/ funding from the global enterprise for implementation of the solution.
2. This is a win-win situation for both global enterprises as well as Indian start-ups, as former need access to global talent for R&D initiatives, and latter seeks opportunities to work with global enterprises.

Goal: Create avenues for attracting foreign investments into Indian start-ups

Continue to grow foreign investments by Direct Overseas Listing

1. Operationalise the framework to allow direct overseas listing of Indian start-ups on foreign stock exchanges without the condition to simultaneously or subsequently list on Indian stock exchanges.
2. The Government’s intention to enable direct listing on overseas stock exchanges is clear by the amendment in the Companies Act. However, the implementation framework is yet to be notified, so that the amendment in Companies Act can be operationalised.
3. For implementation, there is a need to bring amendments to the Foreign Exchange Management Act, SEBI rules and Income Tax Act.

Disclaimer

That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.

Garima Prakash

Manager, Public Policy and Government Affairs

Reach out to me for all things policy about e-commerce, international trade, export controls, start-ups and fintech

Suggestions to the RBI on the draft...

moncourt.ananya831