Thanks to a confluence of innovation, policy support, and strategic investments, India is rapidly emerging as a global powerhouse in deep-tech
Words by Karan Karayi
Some call it frontier tech, others deep-tech. But no matter the nomenclature, this pivotal piece of the tech puzzle is vital towards completing the larger picture of India’s USD 10 trillion economy. In an exclusive conversation with Manu Iyer, Co-founder and General Partner at Bluehill VC, we set about understanding how deep-tech innovation is set to drive large-scale impact across industries, and perhaps particularly in India’s burgeoning defense sector.
In an era marked by rising geopolitical tensions and supply chain vulnerabilities, how can India’s deep-tech sector emerge as a driver of strategic self-reliance?
Self-reliance is very critical. Most of our defense supply chain has historically depended on imports. Given rising geopolitical tensions, it’s critical that we are self-sufficient and build sovereign capabilities for our defense systems. Take the situation in 1999 during the Kargil War when the US turned off Indian access to GPS, which rendered us unable to target enemy installations or position our aircraft. Today we have built our own navigation and positioning system, NAVIC, such that we are self-reliant.
This has to happen across the board from flight controllers for drones to micro gas turbines to electo-optical systems. For this to happen it requires bold vision from the defense establishment and from the government. We are already seeing a push in this direction from the Centre with the establishment of a defense focused fund, increased support for the IDEX program, change in rules such that Global Tender Enquiries need not be floated for order values under INR 200cr, among others.
Bluehill.VC focuses on core engineering and science IP. What are the biggest challenges and opportunities in building globally competitive companies in these domains from India?
The biggest challenge is in completing the feedback loop of problems on the ground to solutions getting built in a reasonable timeframe that allows for the right products to be conceptualized, protyped, tested and built. We have some of the best engineers globally and the connectivity between research and commercialization needs to happen in a meaningful way for startups to achieve large outcomes. Otherwise, they are left solving theoretical problems.
How do you see technologies like drones, defence tech, and semiconductors reshaping national security and economic strength in the next decade?
India has historically relied on the strength of our software and outsourcing base. The best of Chemical and Mechanical engineers are deployed into writing code instead of working in their fields of study. We have lagged behind China and the west on “industrialization” – some estimates peg us as being 20 years behind. There is now a clear vision from the Centre and many of the States that rapid industrialization is the future. To that end, programs like IDEX in defense, DLI in semiconductors, FAME in EVs, In-Space in Space, and many others are providing the support structure for startups to build and deliver.
With an invest-and-build model, what are the key ingredients needed to turn deep-tech startups into sustainable, scalable businesses in today’s uncertain world?
Turning deep-tech startups into sustainable and scalable businesses requires founder support structures, patient capital and technical validation backed by market validation. Deep-tech startups have generally needed longer gestation cycles because of larger capital deployment needed for plant & machinery. Today, a lot of that outlay is supported by a mix of grants and in-kind support from government and quasi-governmental agencies, which frees up capital to focus on building tech.
