2. China: Deep Tech Dominance Amid Regulatory Challenges
China’s startup ecosystem remains heavily focused on deep tech sectors, including
electric vehicles, battery technology, robotics, and AI.
2024 Market Dynamics

• Venture capital funding in China declined by 22.5% in both deal volume and funding value.
• Total funding: $32.3 billion across 2,313 deals. Key Contributing Factors
• Regulatory crackdowns
• Macroeconomic uncertaintie

Key Trends

• AI and Robotics: Heavy investments in AI technologies, including embodied AI applications like humanoid robots and autonomous delivery systems, are aimed at addressing demographic challenges and boosting productivity.
• Green Energy and EVS: Continued leadership in cleantech investments, with
  several new unicorns emerging in the electric vehicle and alternative energy sectors.
• Policy Reforms: Implementation of plans to open up the service sector to attract foreign investment and stimulate economic growth.

Challenges

• Despite renewed emphasis on private sector support, startups continue to
  navigate a complex and often restrictive regulatory environment, limiting growth and international scalability.

Leapfrogging China: The Sectors That Could Define India’s Global Edge
1. Green Energy: India’s Strategic Leap in Sustainable Power
India is making significant strides in green energy, particularly in green hydrogen and renewable energy infrastructure.
Key Initiatives

• National Green Hydrogen Mission:
• Allocation of ₹600 crore for 2024–25
• Total outlay of ₹19,744 crore up to FY 2029–30
• Aims to position India as a global hub for green hydrogen production and

export

• State-Level Initiatives:
• Target: Up to 1 million tons production capacity
• Public-Private Partnerships:
• Joint ventures such as BPCL and Sembcorp are accelerating India’s renewable energy transition

2. Space Technology: India’s Ascent in the Global Space Arena
India’s space sector is experiencing rapid growth, fueled by both private sector participation and government support.
Key Developments

• Private Sector Growth: Approximately 37% of India’s space companies were
  founded between 2020 and 2024.
• Government Support: The Indian National Space Promotion and Authorisation
  Centre (IN-SPACe) is reducing bureaucratic barriers and facilitating private entry.
• Global Recognition: Startups like SkyServe and Agnikul have gained
  international traction.
• SkyServe collaborated with NASA’s Jet Propulsion Laboratory to test AI models on satellites

3. Artificial Intelligence: Building a Robust AI Ecosystem
India is investing heavily in AI to establish itself as a global innovation hub.
India AI Mission

• Budget: ₹10,371.92 crore (approved in 2024)
• Goals:
• Establish public AI compute infrastructure with over 10,000 GPUs
• Provide financing for AI startups from ideation to commercialization
  Global Engagement
• India has taken leadership roles in forums like the Global Partnership on
  Artificial Intelligence (GPAI).
• India hosted the Global IndiaAI Summit, reinforcing its commitment to ethical and inclusive AI development.

4. Defense Technology: Advancing Towards Self-Reliance
India’s defence sector is undergoing strategic transformation focused on
indigenization and export expansion.
Key Policies

• Capital Procurement Budget FY 2024–25:
• 75% earmarked for indigenous products, including advanced weapon systems
• Export Targets:
• Goal to double arms exports to $6 billion by 2029
• Aimed at penetrating markets traditionally served by Russia
• Private Participation:
• India’s first private military aircraft plant inaugurated through a Tata–Airbus collaboration

5. Public Discourse: Piyush Goyal’s Startup Critique
While Chinese startups are advancing in high-end technologies like electric vehicles, battery technology, robotics, and 3D manufacturing, many Indian startups are focusing
“Are we going to be happy being delivery boys and girls?”

Community Response

• Criticism from Founders: Critics argued that the government should provide more support for deep-tech ventures rather than criticizing existing startups.
• Zepto’s Aadit Palicha: Emphasized the need for government support to create local champions in the tech space.
• Mohandas Pai (Aarin Capital): Questioned what the government has done to help deep-tech startups grow in India.

Conclusion: The Road Ahead
India and China are charting different paths in the deep tech race. China’s model is built on state-led, hardware-heavy innovation, but faces internal and international headwinds. India, while historically service-oriented, is gradually positioning itself as a hub for strategic tech like AI, green energy, and space innovation.
To truly leapfrog China, India must:

• Streamline regulations
• Boost R&D spending
• Strengthen university-industry collaboration
• Invest in long-term infrastructure

With the right mix of ambition, policy, and ecosystem support, India has the potential to transform from a consumer of technology to a global creator and exporter of next-gen innovation.

Author
-Anshu