Karnataka is using public grants to draw deeptech startups into the state, including from outside its borders. The state’s ELEVATE NxT programme offers grants of up to ₹1 crore to deeptech startups. Companies from outside Karnataka can apply, but winners must shift their registered office to the state.
The Local Economy Accelerator Programme (LEAP) is a grant initiative for deeptech startups, offering milestone-based grants up to ₹1 crore along with mentorship and support for commercialization. The applications opened on September 21, 2026.
Winners must shift their registered office to Karnataka within four months of the results being announced.
Rahul Rai, Partner, Axiom5 Law Chambers, said moving a registered office alone would not guarantee economic value. But combined with Karnataka’s talent pool, the incentives could encourage companies to establish more substantial R&D operations in the state.
Sumesh Nair, co-founder of Board Infinity, said this should be the central measure of relocation-linked public funding.
“Public capital should build local capability, not simply change a startup’s registered address. Relocation-linked grants should be judged by the additional jobs and skills they create, not just the businesses they attract,” Nair said.
For deeptech startups, where commercialisation can take years and companies require specialised engineers and researchers, talent availability is particularly important. Bengaluru gives Karnataka an established advantage, but it also faces intense competition for specialised talent within the city.
Nair said talent development should therefore be built into the investment design from the outset.
“Startups should work with local colleges and skilling partners on employer-designed curricula, paid apprenticeships and live projects tied to actual hiring needs,” he said.
Nair said states should measure outcomes without imposing premature employment targets on companies still developing their technology.
“For deeptech, accountability should balance technical progress with employment outcomes, rather than imposing premature hiring targets. States should track net new jobs, apprenticeship-to-employment conversions, retention and wage growth, while connecting startups with institutions beyond established technology hubs,” he said.
Karnataka’s approach could also set a precedent for other states. Rai said that competition could ultimately benefit India if it pushes states to develop stronger ecosystems rather than simply offer larger incentives.
“If this can motivate other Indian states to join the race, then the resulting competitive flywheel can only help India’s ambition of developing its own deeptech ecosystem,” he said.
For Karnataka, however, the success of ELEVATE NxT will depend on what happens after a startup moves.
“The grant should help a startup arrive; the talent ecosystem should give it a reason to stay and grow,” Nair said. “Long-term success means building capabilities that remain in the region and support future businesses, rather than subsidising the movement of existing teams.”