The Ministry of Commerce and Industry has broadened the definition of startups under the Startup India programme to include deep technology firms, creating a new category.
According to a notification by the Department for Promotion of Industry and Internal Trade (DPIIT) issued on 4 February, a deep tech startup is an entity that can operate for up to 20 years from the date of registration and has a turnover limit of ₹300 crore.
Meanwhile, a startup, in general, is defined as an entity registered for less than 10 years with a turnover not exceeding ₹200 crore.
As per the notification, a deep tech company will cease to be a startup on completion of 20 years from the date of its incorporation or registration, or if its turnover for any previous year exceeds ₹300 crore. Other types of entities will cease to be a startup on completion of 10 years from the date of incorporation or registration, or if their turnover for any previous year exceeds ₹200 crore.
Additionally, entities created through the restructuring of existing businesses do not qualify as startups.
The notification will take effect immediately and expand the scope of the startup definition issued in February 2019.
What are deep tech startups?
In a first, the government has defined deep tech startups. These startups are characterised by their focus on solutions based on advanced scientific or engineering knowledge, substantial R&D investments, unique intellectual property, and challenges such as lengthy development periods and high capital needs, according to the notification.
How will deep tech startups be determined?
The DPITT will decide if an entity qualifies as a deep tech startup based on the framework, parameters, and guidelines it issues, using the documents and information provided by the applicant as specified.
How to get recognised as a startup or a deep tech startup?
In order to be recognised as a startup or deep tech startup, the notification highlighted the following steps —
Step 1- An entity shall submit the application available on the DPIIT portal.
Step 2- The application shall be accompanied by a copy of the Certificate of Incorporation or Registration, a write-up on the nature of the business, and the relevant documents listed on the online portal.
Step 3- The DPIIT may, after requesting the necessary documents or information and conducting any enquiries it considers appropriate, recognise the eligible entity as a startup or a deep tech startup or reject the application by providing reasons.