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US-India VC Alliance Pledges $1B for Deep Tech Startups

Cansin Cengiz

02 Sep 2025 — 3 min read

US and Indian Investors Unite for $1B+ Deep Tech Venture Fund

In a significant boost for India's technology sector, eight leading US and Indian venture capital and private equity firms have joined forces to launch the India Deep Tech Investment Alliance. This coalition has committed over $1 billion in private capital over the next decade, aiming to accelerate the growth of deep tech startups in India and strengthen bilateral tech ties.

Addressing India’s Deep Tech Funding Gap

The new alliance—featuring prominent names like Accel, Blume Ventures, Celesta Capital, Premji Invest, Gaja Capital, Ideaspring Capital, Tenacity Ventures, and Venture Catalysts—was formed in response to persistent concerns over the lack of funding for deep tech ventures in India. While food delivery and consumer startups have flourished, startups in areas such as AI, robotics, semiconductors, quantum computing, and biotech have often struggled to attract sustained, early-stage investment.

This funding gap recently became a hot topic after Indian Commerce Minister Piyush Goyal publicly criticized local startups for focusing on delivery apps rather than innovation. Many founders and investors countered that the real issue was the lack of available capital for ambitious, research-driven ventures.

A New Model for Cross-Border VC Collaboration

Unlike typical VC behavior—where firms often compete rather than coordinate—the alliance stands out as a formal, named group with binding capital commitments. Each member will invest in Indian-domiciled deep tech startups over a 5- to 10-year period, supplementing the Indian government’s recent ₹1 trillion (about $11 billion) Research, Development, and Innovation (RDI) scheme designed to incentivize local R&D.

Many of India’s most promising deep tech startups have incorporated abroad to access global capital. However, New Delhi’s new RDI scheme requires local incorporation, which the alliance aims to leverage by focusing investments on India-based companies.

Mentorship, Market Access, and Policy Advocacy

Beyond capital, alliance members promise mentorship and extensive network access, helping startups scale and expand both within India and internationally. The group also plans to act as a unified industry voice, advocating for policies and incentives that foster deep tech innovation. An advisory committee—including representatives from Accel, Premji Invest, and Venture Catalysts—will help set shared objectives and guide coordinated efforts.

"Over the next decade, startups will build in India and export breakthrough solutions to the world. The tailwinds are in place: ambition, talent, policy intent, and patient capital," Accel partner Anand Daniel said.

Geopolitical Backdrop: Opportunity Amidst Tension

This alliance comes as the US and India deepen technological cooperation despite recent trade tensions. Earlier this year, the two governments launched the TRUST (Transforming the Relationship Utilizing Strategic Technology) initiative to reinforce tech ties. However, policy disputes—such as new US tariffs on Indian goods—have complicated the relationship. Still, both nations see mutual benefit in supporting India's emergence as a global hub for foundational technologies.

What Happens Next?

The alliance will initially focus on early-stage (seed to Series B) startups in deep tech sectors.
Membership may expand to include more VC and private equity firms, as well as corporate investors.
Coordination will revolve around deal sourcing, due diligence, and co-investment, but each firm will retain its independence.
The leadership of the alliance will be rotational, beginning with Celesta Capital’s Arun Kumar.

While the alliance pools significant resources and creates a powerful industry platform, its ultimate impact will depend on sustained coordination and the ability to navigate India’s evolving regulatory landscape.