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Deep tech isn’t a sprint—it’s an infinite game. India’s need of the hour is long-term investment, policy continuity, and a competitive state leadership
Image Source: Getty
India’s ambition to become a global technological competitor hinges on a critical mindset shift—recognising deep technology as an infinite game. Deep tech—encompassing frontier sectors like Artificial Intelligence (AI), quantum computing, and semiconductors—does not conform to short-term business cycles. It requires sustained investment, policy continuity, safe harbours for corporate incentives, an ecosystem that nurtures cutting-edge research over decades, and long-term state stewardship.
Game theory classifies games as finite and infinite. Finite games—such as sports competitions and election cycles—have defined rules, winners, and endpoints. Infinite games—like scientific progress and geopolitical power—have no such boundaries. The goal is not to ‘win’ but to continue playing, ensuring enduring success through adaptation, continued investment, and resilience.
The goal is not to ‘win’ but to continue playing, ensuring enduring success through adaptation, continued investment, and resilience.
Deep tech development is an infinite game. No nation ‘wins’ AI, semiconductor, or quantum supremacy in a single cycle. Instead, policymakers of global leaders, including the United States (US) and China, treat deep tech as a multi-generational investment by continuously funding research and development (R&D), directing policy, supporting industry growth, and nurturing scientific talent across multiple economic cycles. To achieve global competitiveness, India must entrench deep tech as a national priority and policy, transcending governments, partisanship, administrative turnover, market fluctuations, limits of civil servant expertise, and short-term economic priorities.
Recent policy developments signal positive intent. The 2025–26 Union Budget has significantly allocated funds in key deep tech sectors like AI, nuclear energy, quantum, and semiconductors. It has also allocated INR20,000 crore (US$2.35 billion) to incentivise private sector-driven R&D and instituted 10,000 research fellowships. However, the allocations are nowhere close to those made in the US and China to innovate technologies at the leading edge.
In India, even the decision to invest takes multiple budgets to operationalise. ChatGPT, a generative AI chatbot that advanced Natural Language Processing (NLP) models to a radically advanced orbit, democratised access to advanced AI, and accelerated innovation across industries, was launched in 2022. It inherited over four decades of US leadership in NLP, cloud computing, and other elemental intellectual property. The Government of India has decided to invest capital in the ‘India AI Mission’ and an indigenous Graphics Processing Units (GPUs) in 2025 —three years after the generative AI competition was initiated globally. In the past, India has made no significant investment in developing any indigenous Intellectual Property (IP) in this sector. This is a failure of the Indian Administration to recognise the importance of thinking in the framework of the infinite game. With today’s fast-paced technology cycles, three years from the leading edge is a lifetime, and playing catch-up without a foundation to build on top of is nearly impossible. The Administration must think differently now to shift the orbit of Indian innovation to the cutting-edge.
ChatGPT, a generative AI chatbot that advanced Natural Language Processing (NLP) models to a radically advanced orbit, democratised access to advanced AI, and accelerated innovation across industries, was launched in 2022.
Similarly, India’s policy follow-through takes years to implement. The draft National Deep Tech Startup Policy was released in July 2023, with a comprehensive framework for policy, financial and resource support, public-private partnerships (PPP), procurements and sub-contracting, human capital, and startups. However, one interim budget and two full budgets later, the policy is yet to be operationalised.
Further, there is a sentiment within the government that the Indian private sector must drive technology development. The Minister of Industry and Commerce, Piyush Goyal, recently remarked at the Startup Mahakumbh 2025 that China was forging ahead with high-end tech like Electric Vehicles (EVs) and AI technology, while Indian startups seemed focused on lower-value tech such as food apps and grocery delivery. The Commerce Minister has overlooked the significant capital invested by the Chinese government over decades towards its target of tangible superiority in these sectors.
The Economic Survey of India 2025 flags the government’s concerns about low private sector R&D spending. The bureaucracy and Finance Ministry have not studied how significant the US’s public R&D funding programmes have been for decades, which act as grant givers and market makers to support private sector participation. While India allocated US$2.35 billion to spur private sector R&D, the US’ allocation to one company is three times that Intel received (US$7.9 billion) in 2024. How can India compete when its entire national allocation is merely a fraction of one company’s allocation in the US?
The US and China deploy public funds strategically, shape markets, and partner with their citizens to build resilient ecosystems that outlast individual political administrations. Yes, both are significantly larger economies with a higher fiscal capacity to invest. However, they earned their positions by consistently allocating over decades. For India to be competitive, deep tech must be elevated from a reactive interest to a national policy priority, transcending political cycles and becoming embedded in the state planning and economic strategy. It cannot be a matter of debate that this is an existential priority for the Indian economy.
The US and China deploy public funds strategically, shape markets, and partner with their citizens to build resilient ecosystems that outlast individual political administrations.
India’s private sector has been a major contributor to its digital economy. The Information Technology (IT) services industry has grown into a US$200 billion+ export powerhouse, employing millions and dominating global software delivery markets. India's technology-powered startup ecosystem has risen on the shoulders of the IT industry, with 160,000+ startups today. India's private investment sector is thriving, with US$ 132 billion in cumulative investments from CY2014 till JFM2025. However, while the private sector thrives on scaling commercially viable technologies, deep tech presents a different challenge.
Many deep tech verticals are not yet in market-facing commercial spaces. Unlike fintech or SaaS, where companies can expand quickly by selling directly to consumers or businesses, deep tech innovation often serves strategic interests at a national level. R&D in these verticals might eventually reach consumers and enterprises via dual-use applications, like the Global Positioning System (GPS). Nonetheless, they mainly still originate from strategic sectors. Venture Capitalists investing in these sectors can only consider enterprises that can tap a viable market with predictable demand within their 7-10-year fund duration. In verticals with protracted funding horizons, the government is not just a facilitator but the largest and often the only viable customer.
Unlike fintech or SaaS, where companies can expand quickly by selling directly to consumers or businesses, deep tech innovation often serves strategic interests at a national level.
Policy must recognise this asymmetry and step in where private incentives are insufficient. Governments must act as both enablers and market makers—providing the capital, stability, and direction needed to catalyse innovation and scale indigenous capabilities.
Unless the Indian government and administration actively create and sustain domestic markets for indigenous deep tech, these sectors will not flourish. The reality is that no country has produced a thriving deep tech ecosystem without significant and sustained government spending, and active support as the first customer. A prime example is the US defence industry, where companies like Lockheed Martin and Raytheon have thrived because of the massive, consistent and predictable financial backing from the Department of Defence. Anduril is this system’s most notable recent startup beneficiary, landing a US$22 billion defence application contract in February 2025—seven times DRDO’s annual allocation of US$3.15 billion.
Predictable demand from significant budgetary allocations and long-term contracts allows companies to:
The reality is that no country has produced a thriving deep tech ecosystem without significant and sustained government spending, and active support as the first customer.
Similarly, the government is the market maker in quantum computing, space, renewable energy, and nuclear energy. The US government's significant financial commitments in all these sectors have essentially de-risked private investment, enabling venture-backed startups to become global leaders over the decades.
India must operationalise its iron will to dominate key sectors globally. The government must make substantial investments across the value chain: fundamental research, prototyping, product development, securing the IP, building production facilities, and supporting commercialisation efforts. The objective is to incentivise innovation and actively create large-scale markets and procurement channels for indigenous tech. This investment cycle must be continuously repeated for the next generation of emerging technologies across multiple strategic deep tech sectors, ensuring sustained growth and competitiveness at the leading edge.
The government must act as the grant driver and anchor client, ensuring domestic deep tech companies have the space and security to innovate.
Without direct, large-scale government spending, India's deep tech ecosystem will lack the financial runway to compete globally. The private sector cannot make multi-decadal bets on technology that does not yet have a commercial market. The government must act as the grant driver and anchor client, ensuring domestic deep tech companies have the space and security to innovate.
Deep tech development is not a competition with a finish line—it is an infinite game where the only objective is to endure by innovating and harnessing emergent resilience. The choice before India is clear—embed deep tech within its national policy architecture, or risk perpetual technological dependence—a position India has been in for 200 years. However, it has an opportunity to flip today with the right mindset in a digital world where first movers dominate global markets.
The government must boldly lead from the front, trusting its citizens by investing in and taking risks with them, ensuring sustained investment, infrastructure, and policy support. The question is not whether India can invest heavily in deep tech. The real question is: Can India afford not to?
Nisha Holla is a Visiting Fellow at the Observer Research Foundation
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Nisha Holla is Visiting Fellow at ORF where she writes on ideas and shifts at the intersection of technology economics and policy. She tracks the ...
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