This Government Body Can Fund Your Startup Without Taking Full Equity

If you’re a founder building something in deep tech — hardware, medical devices, clean energy, industrial automation, advanced materials — you already know the fundraising game is stacked against you. VCs want fast growth, quick returns, and software-like margins. Your reality is prototypes that take 18 months, regulatory approvals, and a manufacturing setup that costs real money before you see a single rupee of revenue.

So you pitch. And pitch again. And somewhere along the way, you either give up too much equity too early, or you run out of runway before the technology is ready.

But what if there was a government body — one that’s been running since 1996 — that was specifically designed to fund exactly this kind of work? One that gives you soft loans at 5% interest, can invest in your equity without the usual VC pressure, and in rare cases, hands out outright grants with no repayment? And what if it doesn’t charge you a single rupee in processing or administrative fees?

Meet the Technology Development Board (TDB).

What Is the Technology Development Board?

The Government of India constituted the Technology Development Board (TDB) in September 1996, under the Technology Development Board Act, 1995, as a statutory body, to promote development and commercialization of indigenous technology and adaptation of imported technology for wider application.

That’s the official language. Here’s what it means in plain English:

The Technology Development Board is the first organization of its kind within the Government framework with the sole objective of translating the fruits of indigenous research into commercial products or services. It sits under the Department of Science and Technology (DST), Ministry of Science and Technology. The TDB provides financial assistance to Indian industrial concerns and other agencies, attempting development and commercial application of indigenous technology, or adapting imported technology to wider domestic applications.

Translation: if you’ve built real technology in India — not just a business model sitting on top of someone else’s platform, but actual indigenous tech — and you’re at the stage where you need capital to turn that technology into a commercial product, TDB exists precisely for you.

Why This Matters Right Now: India’s Deep Tech Funding Gap

Let’s zoom out for a second, because the timing here is significant.

Indian deep tech startups raised $1.65 billion in 2025, a sharp rebound from $1.1 billion in each of the previous two years after funding peaked at $2 billion in 2022, per Tracxn. That sounds healthy until you compare it globally: U.S. deep tech startups raised about $147 billion in 2025, more than 80x the amount deployed in India that year, while China accounted for roughly $81 billion.

The disparity highlights the challenge India faces in building capital-intensive technologies, even with its wealth of engineering talent. And the broader private funding picture isn’t easy either. India’s startup ecosystem raised nearly $11 billion in 2025, but the number of startup funding rounds fell by nearly 39% from a year earlier, to 1,518 deals. Seed-stage funding fell sharply to $1.1 billion in 2025, down 30% from 2024, as investors cut back on more experimental bets.

So: deep tech funding is recovering but still tiny compared to global benchmarks, private investors are getting more selective, and seed funding — the stage where most deep tech founders desperately need capital — has dropped sharply. This is exactly the gap that makes government capital not just “nice to have” but genuinely strategic.

The government clearly sees this too. New Delhi announced a $1.15 billion Fund of Funds in January to expand capital access for startups, followed by a ₹1 trillion ($12 billion) Research, Development, and Innovation scheme aimed at areas such as energy transition, quantum computing, robotics, space technology, biotech, and AI. India extended the startup classification period for deep-tech companies from 10 to 20 years and raised the revenue threshold for tax benefits from ₹1 billion to ₹3 billion.

TDB has been quietly doing this work for nearly three decades. The ecosystem is only now catching up to why it matters.

The Three Ways TDB Can Fund You

This is the part most founders get wrong — they assume TDB is just “another government loan.” It’s not. TDB provides financial assistance up to 50% of the project cost (as soft loan); 25% of project cost (equity) and grant (in exceptional cases). And critically, the Board does not levy any processing, administrative or commitment charges from the applicant.

Let’s break down each mode:

1. Soft Loan — The Core Offering

This is TDB’s bread and butter, and it’s genuinely founder-friendly.

Let’s unpack why this is special. First, 5% simple interest — not compound. Most commercial loans charge compound interest at 12-18%. Second, it’s milestone-based: you don’t get a lump sum upfront and pray you spend it well. The money comes in stages, tied to actual progress. Third — and this is the part most founders miss — repayment only starts one year after the project is completed. That means during the entire development period, you’re not paying anything back. You have a full moratorium that lets you focus on building.

Also note the revised guidelines: for loans up to ₹5 crore, TDB can fund up to 70% of the project cost — even more generous for smaller projects.

2. Equity — TDB as an Investor

TDB may also subscribe by way of equity capital in an industrial concern, on its commencement, start-up and/or growth stages. It is up to 25 per cent of the approved project cost provided such investment does not exceed the capital paid-up by the promoters.

So TDB can invest like a VC — but with one massive difference in philosophy. The Board plays a pro-active role by encouraging commercial enterprises to take up technology oriented projects. They’re not chasing a 10x return in five years. They’re looking at whether the technology has national importance and commercial viability. That means less pressure to hit hockey-stick growth metrics and more patience for the kind of long development cycles that deep tech requires.

In some cases, TDB may have nominee director(s) on the Board of Directors of the assisted industrial concern. So be aware — equity involvement may mean board-level governance — but for many founders, having a government body on your board actually adds credibility with other investors and customers.

3. Grants — Rare, But Real

TDB may also provide financial assistance by way of grants and/or loans to industrial concerns and R&D institutions engaged in developing indigenous technology. However, the sanction of grants is decided by the full Board of TDB and is sanctioned in exceptional cases. Grants are given specially in the projects having national importance.

Grants are the rarest funding mode — no repayment, no equity dilution. Think healthcare technologies with massive public health impact, defence-adjacent innovations, or critical infrastructure tech. Royalty may be levied in case of grant assistance. So even “free” money may come with a royalty clause on commercial revenues, but that’s still far better than giving up 20-30% equity.

What TDB Has Actually Funded — This Is Not Theory

One of the reasons founders dismiss government funding is they assume nothing real ever comes out of it. TDB’s track record tells a different story.

The numbers on TDB’s homepage tell the scale: across engineering alone, TDB has signed 79 agreements with a total project cost of ₹1,021.79 crore and TDB commitment of ₹414.3 crore. In defence and civil aviation: 10 agreements, ₹648.83 crore total project cost. In chemicals: 28 agreements, ₹257.24 crore. These are real commitments across sectors.

The success stories featured on TDB’s own website include some names you’d recognize. Bharat Biotech has had a long and successful relationship with the Technology Development Board. Bharat Biotech launched its maiden product ‘Revac-B’ (Recombinant Vaccine for Hepatitis-B) in October 1998. The technology was developed by the company in its in-house R&D unit. Today, Bharat Biotech has delivered over nine billion doses of vaccines globally as of May 2025, has over 145 global patents and a portfolio of over 19 vaccines.

Other funded companies showcased by TDB include S3V Vascular Technologies (medical devices, Karnataka), Sahajanand Laser Technology (laser systems, Gujarat), Swajal Water (water purification, Haryana), and Alchemy Recyclers (waste management, Gujarat). These aren’t pitch deck startups — they’re companies that built real technology, commercialized it, and scaled.

TDB also has a National Awards program that recognizes successful commercialization. TDB instituted a National Award for successful commercialization of indigenous technology by industrial concerns in 1999. From 2017 onwards, a new category of award called national award for start-up has been introduced to encourage and promote technologies developed by start-ups having potential for commercialization. Winners receive ₹15-25 lakh in cash prizes plus recognition that opens doors across the ecosystem.

When Should You Look at TDB? (Timing Is Everything)

This is critical, and it’s where most founders waste their time — applying at the wrong stage.

TDB is not for idea-stage founders. It’s not for pre-prototype experiments. As the technology ecosystem faces these financial headwinds, it is essential to bridge the commercialization gap, enabling startups to transition from proof of concept to sustainable business models. This call for proposals aims to identify and support startups that are ready to scale, assisting them in overcoming the financial challenges that hinder their growth.

Several innovative research projects fail to reach the market due to lack of financial resources for scale up and commercialization. That’s the exact problem TDB was built to solve. If your tech works but you can’t afford the manufacturing setup, the regulatory compliance, or the first production run — TDB is one of the best-matched funding sources in the country.

What TDB Evaluates (And Why Most Applications Fail)

Here’s where you need to be honest with yourself. TDB isn’t handing out money to everyone who applies. The evaluation is rigorous.

To apply, companies require to submit detailed proposals including the technology’s feasibility, potential market, and commercialization plan. Based on TDB’s published guidelines, the key evaluation criteria include:

• Technology originality: Is this genuinely indigenous? Did you develop it, or are you just assembling imported components? TDB’s core mandate is about homegrown technology.
• Commercial viability: Applicants must show scalability and commercial potential. A beautiful piece of science that no one will buy isn’t what TDB funds.
• Execution capability: The evaluation looks at the adequacy of the proposed effort, measurable objectives, targets and milestones, and the track record of the entrepreneur.
• India impact: Can this technology make a difference at scale within India? Defence applications, public health solutions, energy solutions, manufacturing capabilities — these themes resonate strongly.

How the Application Process Works

Let’s be upfront: this is not a 15-minute online form. It’s a serious proposal that requires preparation. But it’s also transparent and well-documented.

Here’s the actual flow:

• Step 1 — Submit a detailed proposal. Applications are reviewed, and eligible projects receive funding based on merit. The proposal template is available for download from TDB’s website (tdb.gov.in), so you can prepare everything offline before submitting.
• Step 2 — Technical evaluation. A Project Evaluation Committee of domain experts reviews the technology, the team, the market potential, and the financials.
• Step 3 — Due diligence. Financial verification, promoter background checks, and validation of claims made in the proposal.
• Step 4 — Board approval. The full TDB Board reviews recommended proposals and approves funding.
• Step 5 — Milestone-based disbursement. Once approved, money flows in stages tied to project milestones — not as one big deposit.

Is it slow compared to writing a cheque at a Demo Day? Yes. But the trade-off is significant: you keep more of your company, you get credible government validation, and you access capital at terms no private investor will match.

A Company intending to commercialize the technology, incorporated under the Companies Act, 1956/2013 is the basic entity requirement — you need to be a registered Indian company. For projects above ₹5 crore, matching contribution has to be brought by the startup company, hence TDB’s funding will be limited to 50% of the total project cost.

TDB’s Venture Fund Partnerships: The Extra Layer

Here’s something most guides don’t mention: TDB doesn’t only invest directly. TDB has joined hands with major private equity investors to invest in the equity of startups and companies in the growth phase. TDB has been participating in venture funds which are mainly concentrated in technology orientation, early-stage projects and also on investment in state-level funds where TDB’s presence was inadequate.

This matters because even if your startup isn’t a fit for a direct TDB proposal, you might end up receiving TDB-backed capital through a private venture fund that TDB has invested in. The ripple effect of government capital flowing through the ecosystem is larger than the direct funding numbers suggest.

With its pro-active stance the Board: facilitates interaction between industry, scientists, technocrats and specialists; fosters an innovation culture through contract and cooperative research between industry and institutions; provides an interface with financial institutions and commercial banks for leveraging funds. In other words, TDB isn’t just writing cheques — it’s actively building the connections that help deep tech founders navigate the ecosystem.

Who Should Seriously Consider Applying

Let’s get specific. TDB is worth your time if you’re building in:

• Medical devices and health technology: Indigenous diagnostic equipment, surgical instruments, point-of-care devices, vaccine technology.
• Clean energy and climate tech: Solar manufacturing, waste-to-energy, water purification, battery technology.
• Advanced manufacturing: Industrial machinery, robotics, precision equipment, new materials.
• Defence and aerospace: Indigenous components, surveillance systems, navigation technology.
• Agriculture technology: Food processing equipment, precision farming tools, post-harvest technology.
• AI and electronics: Hardware-software integrated systems, semiconductor-adjacent technologies, embedded systems.

The common thread? Real technology with a physical or deeply technical component that solves a problem at India-scale.

Who Should Skip This

Honesty matters here. TDB is not for you if:

• You’re pre-prototype with just an idea or pitch deck
• You’re building a pure software product with no indigenous technology component
• You need money next month — the timeline doesn’t work for urgent fundraises
• You’ve already raised significant VC funding and are optimizing for speed over terms
• Your business is a services company without a core product or technology

If you’re a SaaS founder or a marketplace business, look at Startup India Seed Fund Scheme, the Credit Guarantee Scheme, or private accelerators instead. TDB’s mandate is specifically about technology commercialization — the clue is in the name.

The Bigger Picture: Why Government Capital Deserves a Place in Your Strategy

Here’s the uncomfortable truth about India’s startup ecosystem in 2026: Deep-tech startups face particular difficulties securing private capital. Their research-intensive nature requires longer development periods before generating revenue. Traditional venture capital firms often prefer faster returns from software or consumer internet companies.

The government is responding to this gap at every level. India’s cabinet approved Startup India Fund of Funds 2.0 with a ₹10,000 crore ($1.1 billion) corpus to support deep tech and manufacturing startups through private VCs. The ₹1 lakh crore RDI Fund is being deployed. The government’s growing involvement helped spur a nearly $2 billion commitment from U.S. and Indian venture capital and private equity firms, including Accel, Blume Ventures, and Celesta Capital, to back deep tech startups.

TDB has been at this for three decades. It’s not new, not untested, and not a pilot program. It’s a proven mechanism that has helped companies like Bharat Biotech go from a single vaccine product in 1998 to nine billion doses delivered globally.

All information is sourced from TDB’s official website (tdb.gov.in), the Department of Science & Technology (dst.gov.in), TDB’s published funding guidelines, and verified reporting as of April 2026. Funding terms, guidelines, and eligibility criteria are subject to change. Always verify current details directly on the official TDB portal before applying. This article is for informational purposes only and is not affiliated with TDB or any government body.