Budget 2025: Nasscom Pushes for Reforms in Safe Harbour Rules, Deeptech Fund, and Startup Support

India’s apex IT industry body, Nasscom, has made a strong case for tweaks in the country’s safe harbour rules as part of its budget wishlist for 2025. The industry body proposed that the current cap on turnover (Rs 200 crore) and the criterion of bearing "insignificant risk" should be removed, urging the government to make the regime applicable to all Global Capability Centres (GCCs). Nasscom also recommended a significant reduction in the current safe harbour margin rates, which were previously adjusted in 2017 but are still deemed "very high" by the industry.
Support for Deep Tech Startups: Creation of a Dedicated Fund

Nasscom has called for creating a dedicated deeptech fund to support the burgeoning startup ecosystem in India. The body suggested establishing a fund-of-funds designed with flexibility for longer gestation periods (up to 10 years with possible extensions) to provide 'patient capital' for deeptech ventures. The fund could also include provisions for matching capital to encourage greater venture investment in the sector, which was also highlighted in the draft National DeepTech Startup Policy (NDTSP) 2023.

Grant Framework and Infrastructure Support for Deeptech

Further, Nasscom is pushing for a grant framework tailored to the deep tech ecosystem, with a two-tiered funding approach. The first tier would offer an Initial Proof of Concept grant of at least Rs 2 crore to help validate core technologies, while the second tier would provide a minimum of Rs 3 crore to support market validation and early commercialization of tested prototypes. Additionally, the body suggests creating specific infrastructure grants to help startups access expensive labs and testing facilities, particularly in high-cost sectors like Space, Semiconductors, AI, and Clean Energy.
Expansion of ESOP Tax Deferment for Startups

One of the key expectations from Nasscom involves expanding the scope of the Employee Stock Option Plan (ESOP) tax deferment to employees of all DPIIT-recognized startups. Only a small percentage of startups—roughly 2.5 per cent—benefit from this deferment due to the restrictive eligibility criteria. Nasscom has called for a more inclusive policy allowing all DPIIT-recognized startups and their employees to benefit from the tax deferral.
Expanding SEZ Reinvestment Reserve Utilization

Another major demand from the IT industry is for broader utilization of the Special Economic Zone (SEZ) reinvestment reserve. Nasscom seeks to include a wider range of expenses, such as operating costs for leasing computers, purchasing software, cloud infrastructure usage, and capital investments for new employees. The body believes that this change will further streamline operations for tech companies and support their growth.
Fostering Startup Growth Amid Global Economic Uncertainty

The demands come at a time when India’s $250 billion IT industry faces global macroeconomic challenges, geopolitical risks, and concerns over potential policy and tariff changes, particularly in the US. Nasscom's proposals, including measures to ease compliance burdens and boost capital availability, aim to strengthen India's tech and startup ecosystem, ensuring sustained growth despite global uncertainties.