Tamil Nadu Unveils INR 100 Cr Deeptech Startup Policy

With an outlay of INR 100 Cr, the new policy will offer early-stage grants, incubation and innovation facilities and flexible funding mechanisms to startups

The policy aims to position the state as a global deeptech hub, prioritising sectors such as AI, blockchain, semiconductors, electronics manufacturing, spacetech and AVGC

The new policy comes as deeptech funding hit an all-time high in 2025, with homegrown startups raising $530 Mn across 87 deals.

Tamil Nadu (TN) chief minister MK Stalin today launched a dedicated startup policy to foster deeptech startups in the state.

With an outlay of INR 100 Cr, the new policy will offer structured support across the innovation lifecycle – from early-stage grants and incubation to state-funded innovation hubs and flexible funding mechanisms.

“This deeptech startup policy lays the foundation for a future where innovation empowers every citizen and elevates our collective destiny,” CM Stalin said while introducing the policy at the UmagineTN Technology Summit in Chennai.

Tamil Nadu’s IT minister Palanivel Thiaga Rajan added that the policy will look to build a globally competitive deeptech ecosystem in the state and foster entrepreneurship.

The policy aims to position the state as a global deeptech hub, prioritising sectors such as AI, blockchain, semiconductors, electronics manufacturing, spacetech, and animation, visual effects, gaming, and comics (AVGC).

To be eligible to avail sops under the policy, startups will be required to have an operational presence in Tamil Nadu. Additionally, applicants must employ at least 25% of its overall workforce in the state.

With this, the state government is looking to solve key challenges plaguing the sector. Deeptech startups face funding issues due to long R&D cycles, high technical risk, and slow paths to profitability.

On top of this, the space also grapples with issues such as lack of specialised talent, weak ecosystem support and a gap between investor expectations for broad scope and deeptech’s niche needs. However, trends are changing on the ground.

India’s deeptech funding hit an all-time high in 2025 as startups in the sector raised $530 Mn across 87 deals. The year also saw several deeptech-focussed fund launches from VC firms such as Speciale Invest, 888VC, Riceberg Ventures and Chiratae Ventures.

Meanwhile, on the policy front, the Karnataka government last year also allocated INR 150 Cr for its DeepTech Elevate Fund, which is focussed on AI and frontier technologies.