The report aims to spark a nationwide conversation and fast-track India’s rise as a global centre for hardware innovation and deep-tech entrepreneurship.
In a major push to strengthen India’s innovation-led growth, the Confederation of Indian Industry (CII), along with KPMG and Synopsys, launched India’s first comprehensive Engineering Hardware Industry Startup Ecosystem Report at the ICONN Summit 2025.
The report arrives at a crucial time as India’s hardware industry is projected to reach $ 296 billion by 2034, positioning the country to accelerate its Viksit Bharat @2047 vision.
The inaugural whitepaper maps the rapidly evolving hardware startup landscape, identifies sectoral challenges, and offers actionable recommendations for startups, investors, policymakers, and academic institutions. Insights were gathered from over 100 engineering and hardware startups across sectors such as cleantech, defence, electronics, and advanced manufacturing.
Speaking about the launch, Mr. C. K. Ranganathan, Co-Chairman, CII National Startup Council, said, “This whitepaper showcases the immense potential of India’s engineering hardware startup ecosystem. Deep-tech and hardware innovation will be vital for India’s aspiration to become a global manufacturing and technology leader. With this strategic roadmap, we aim to unlock growth, encourage innovation, and strengthen competitiveness across the sector.”
However, the R&D spent by Indian companies are not as required. Asked the reason for the same, Mr. Ranganathan highlighted that the biggest barrier to R&D investment in India is not money, but mindset. He explained that innovation does not always require large budgets or deep scientific expertise — it begins with commitment. Citing his own entrepreneur journey building a leading herbal shampoo brand by dedicating more space to R&D than to his office, he stressed that owning patents is what builds real wealth. While high-cost R&D demands government support, he noted that traditional industries often stick to existing products and avoid experimentation, whereas startups show greater openness to innovation. Digital simulation tools, he added, can help companies “fail fast and fail small,” testing ideas quickly and inexpensively. He also emphasised CII’s role in pushing industries to invest in R&D by showcasing both success stories and cautionary examples, urging Indian companies to adopt a forward-looking innovation mindset.
Highlights
The report reveals key industry challenges, including limited access to specialised testing facilities (52%), early-stage funding barriers (73%), and a shortage of technically trained talent (67%). It recommends establishing fabrication labs, prototyping centres, virtual training programs, and strong academia–industry collaborations to bridge these gaps. It also urges policymakers to strengthen regulatory support, IP protection, and commercialisation pathways, while calling on investors to provide patient capital and outcome-driven funding.
Mr. Murali Pullela, Area Sales Director, Synopsys Inc., said, “The report captures the immense potential of India’s hardware startup ecosystem. Constraints like limited access to digital tools and affordable design technologies are real barriers. Synopsys remains committed to empowering Indian innovators with advanced simulation and design capabilities to help them turn bold ideas into breakthrough technologies.”
The whitepaper underscores how strategic collaboration between industry, government, and academia can drive India’s hardware transformation, attract global investment, and help build world-class engineering ventures.
Mr. Pullela highlighted that not all startups face the same challenges, and engineering-based manufacturing ventures operate very differently from fintech, marketplace, or supply-chain startups. Unlike software-led ideas that can be built quickly with minimal resources, engineering products often need nearly nine years to progress from concept to a working prototype. This long development cycle makes many venture capitalists lose interest, creating a deep funding gap for hardware innovators. As a result, engineering startups struggle far more to attract investors or scale early. The purpose of the session was to bring these unique challenges to light and identify specific areas that need targeted support to help India’s engineering startup ecosystem grow.
He stressed that India must urgently build its own innovation ecosystem so the country can create and own its intellectual property instead of only supplying talent to global companies. Today, much of India’s young workforce is deployed in “body shopping” roles for multinational firms, helping them file patents and develop technologies that India does not ultimately own. This, he argued, is a missed opportunity. India must develop an internal system that enables local patent creation, allowing the nation to earn global dollars while also retaining the patterns of innovation at home. Such a shift is essential for India to move from being just a talent provider to becoming a global technology creator and exporter — a transformation he believes is critical for the country’s future.