With ambitious economic targets of reaching a $30 trillion GDP and an $18,000 per capita income, India must sustain high growth rates of 7-10 per cent over the next two decades. Achieving this vision requires a radical change across industries, driven by innovation, research and technological advancements. However, a significant hurdle remains: the ‘Valley of Death’ – the gap between research and commercialisation, where promising deep-tech innovations often fail due to inadequate funding and institutional support.
Deep-tech innovations in early-stage research typically benefit from government and academic funding, while market-ready products attract commercial investments. However, the intermediate stages – where prototypes are developed and tested – face a capital deficit. This forces start-ups and researchers to abandon breakthrough ideas before they reach commercialisation. The role of philanthropy and CSR in filling this void cannot be overstated.
The untapped potential of funding:
India boasts over 963 incubators and accelerators supporting deep-tech start-ups, yet most of them operate at limited capacity. A significant number serve fewer than 50 start-ups each and only a handful cater to more than 200. This fragmentation weakens the ecosystem’s ability to scale innovations. Additionally, private domestic philanthropy in India amounted to ₹63,000 crore in 2023, with CSR contributing nearly ₹29,000 crore. Despite this substantial pool of funds, only 0.3 per cent of CSR contributions over the past nine years have been directed toward technology incubators. This stark underfunding highlights a missed opportunity to align corporate investments with national innovation goals.
Globally, leading R&D ecosystems thrive on strong private sector participation, but India remains an outlier. While institutions like the Harvard and MIT receive billions in private funding, India’s R&D relies largely on government support. China’s start-up boom is fuelled by industry-driven investments and nations like Germany and the UK have structured programmes linking academia with industry. In contrast, India’s heavy dependence on government funding limits its innovation potential, highlighting the urgent need for greater private-sector involvement.
Transaction frictions:
One of the biggest challenges facing CSR-funded research in India is a structural misalignment in funding priorities. Corporate philanthropy often follows traditional government metrics, such as cost-per-beneficiary and job creation, which are more suited to social welfare projects than to deep-tech incubation. As a result, funding allocations often favour short-term, visible impact over sustained technological progress. Additionally, the regulatory framework surrounding CSR mandates immediate, measurable outcomes, discouraging long-term R&D investments that require patience before yielding significant results.
A standardised discovery and qualification mechanism for incubators and start-ups could address this inefficiency. Today, funders struggle to identify high-impact innovations and often rely on a limited set of well-known incubators, leading to skewed funding distribution. Without a transparent vetting framework, many promising incubators in emerging cities remain underfunded. Furthermore, a one-size-fits-all approach to CSR funding, with arbitrary caps and rigid disbursement structures, fails to cater to the unique needs of different technological sectors. Deep-tech innovations in fields like quantum computing, semiconductors, and artificial intelligence require long gestation periods and specialised funding models beyond the generic CSR framework.
For instance, India’s Translational Research Initiative (ITRI) is focused on bridging the gap between lab-scale innovation and market-ready solutions, especially in deep-tech sectors. CSR funding can catalyse this journey by supporting critical infrastructure, pilot testing, and capacity building. By aligning CSR efforts with national innovation goals, meaningful partnerships can be unlocked between corporates, academia, and start-ups – accelerating the path from idea to impact. It’s a powerful way to drive both social good and technological advancement.
India’s deep-tech entrepreneurs are building transformative, cost-competitive solutions to large-scale global priorities – energy security, supply chain resilience, fortified food systems and advanced materials. CSR capital, when deployed strategically to unlock the full potential of these technologies, can play a catalytic role in bridging the lab-to-market gap and enabling breakthrough innovation to scale and succeed for India – and the world.
The Avaana-Start-up India-NITI Aayog AIM Grand Challenge for ClimateTech Innovation was conceptualised to identify and accelerate India’s tech start-ups across sectors like energy systems, mobility, food systems, circularity, and advanced materials. These are key national priorities where deep-tech solutions can drive systemic transformation and long-term value creation. CSR capital, when mobilised strategically, serves as a powerful enabler – not just funding innovation, but also supporting prototyping, pilots, and early commercialisation. By blending CSR support with strategic mentorship, incubation and ecosystem partnerships, the Grand Challenge is helping the founders bridge the critical lab-to-market gap.
CSR to accelerate innovation:
To truly unlock the potential of CSR in fostering deep tech, companies must rethink their funding strategies. Rather than treating CSR as a compliance obligation, corporations should view it as an investment in India’s future competitiveness. Partnering with research institutions, creating sector-specific incubation funds and supporting high-risk, high-reward innovations could create a multiplier effect across industries. Additionally, regulatory amendments that allow CSR funds to be deployed beyond three years would encourage sustained investment in transformative technology.
The potential rewards of such an approach are immense. India is already the world’s third-largest producer of research publications and has climbed significantly in the Global Innovation Index rankings. With a more structured and targeted approach to CSR funding in deep-tech, the country can strengthen its position as a global leader in scientific innovation. Active private sector participation in R&D would supplement existing government grants, fostering a self-sustaining ecosystem where breakthrough ideas achieve commercial viability.
This article was authored by Srikrishna Sridhar Murthy, Sattva Consulting, Anjali Bansal, Avaana Capital, and Mirik Gogri, Spectrum Impact and Aarti Industries.
