Atal Innovation Mission is Shifting India’s Innovation Push From Scale to Outcomes

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When the Atal Innovation Mission was launched in 2016, India’s startup ecosystem was expanding rapidly but unevenly. A decade on, innovation capacity remains concentrated in a handful of cities, while large parts of the country still lack access to labs, mentors, capital, and clear pathways from ideas to scale.

Conceived under the NITI Aayog think tank, AIM is the government’s flagship effort to build a national innovation and entrepreneurship ecosystem spanning schools, universities, startups, industry, and government, linking early experimentation to incubation, commercialization, and scale.

AIM 2.0, approved by the Union Cabinet in November 2024 after nearly a decade of operations, marks its second phase. The new iteration shifts the focus from rapid network expansion to ecosystem quality and outcomes, with sharper emphasis on deep-tech, industry-led acceleration, underserved regions, and global collaboration.

In an exclusive interview with MIT Sloan Management Review India, Deepak Bagla, Mission Director of AIM, discusses how the program is being retooled to build full-stack innovation ecosystems across regions, sectors, and languages. He outlines the priorities under AIM 2.0, including deeper engagement in underserved regions, industry-led accelerators, and new institutional mechanisms to support deep-tech innovation, particularly in healthcare and AI.

Edited excerpt:

How is AIM 2.0 approaching expansion in underserved regions?

India’s innovation challenge has never been a lack of ideas. The constraint has been uneven access and weak institutional pathways that allow ideas to move from curiosity to commercial impact, especially outside major urban centers.

AIM was created to address this gap by building a connected innovation pipeline. At the school level, this begins with Atal Tinkering Labs, progresses to structured incubation through Atal Incubation Centers, and then extends to national programs, sectoral initiatives, and global partnerships.

Under AIM 2.0, the expansion of Tinkering Labs and Incubation Centers in the North East, Jammu and Kashmir, and Aspirational Districts is being approached more deliberately. Rather than replicating a uniform national model, we are conducting targeted consultations with state governments, educational institutions, industry partners, and local ecosystem actors to adapt program design to regional realities.

In Jammu and Kashmir, for instance, we have held multiple engagements with the State Education Department to accelerate the establishment of Atal Tinkering Labs within schools. The focus there is on integration and teacher capacity-building so that these labs remain active and effective over time.

Across underserved regions, AIM 2.0 is placing greater emphasis on durability rather than headline numbers. Initiatives such as the Human Capital Development Program, the Deeptech Reactor, State Innovation Missions, and the Industrial Accelerator Program are designed to strengthen the ecosystem end-to-end, ensuring that early exposure can translate into incubation, commercialization, and scale.

What fundamentally changes under AIM 2.0?

AIM 2.0 is centered on improving the quality, depth, and systemic impact of India’s innovation ecosystem.

One of the key initiatives is the Language Inclusive Program of Innovation, or LIPI, which aims to reduce language barriers by enabling innovation ecosystems across all 22 scheduled Indian languages. This includes setting up Vernacular Innovation Centers within existing incubators so that access to innovation support is not constrained by language.

The Frontier Program focuses on building customized innovation ecosystem models for regions such as Jammu and Kashmir, Ladakh, the North Eastern states, and Aspirational Districts and Blocks. This includes the planned rollout of 2,500 new Atal Tinkering Labs over time, with program design tailored to local conditions rather than applied uniformly.

Human capital development is another priority. Through the Human Capital Development Program, we are training ecosystem managers, teachers, and professionals who are critical to sustaining innovation infrastructure. The Deeptech Reactor, meanwhile, is designed as a structured sandbox to pilot new approaches for commercializing deep-tech innovations that involve longer development cycles and higher capital intensity.

State Innovation Missions support States and Union Territories in building innovation ecosystems aligned with local strengths and priorities, operating as part of NITI Aayog’s State Support Mission. At the national level, the Industrial Accelerator Program is intended to deepen industry participation in scaling advanced startups through sector-focused accelerators established in public–private partnership mode.

How is AIM strengthening global and industry partnerships?

Globally, AIM is expanding bilateral and multilateral innovation partnerships with both advanced and emerging economies to support joint programs, knowledge exchange, startup soft-landing, and cross-border scaling.

We are anchoring India’s role in the G20 Startup20 Engagement Group, using it as a platform for policy dialogue, startup collaboration, and investor engagement. AIM is also working with organizations such as WIPO to strengthen South–South cooperation and improve access to global intellectual property resources.

Industry engagement is shifting from sponsorship-driven involvement to outcome-oriented collaboration. Through Industrial Accelerators developed in public–private partnership mode, corporate partners are directly involved in defining problem statements, mentoring startups, enabling pilots, supporting validation, and co-investing in scale-up.

In 2025, the government inaugurated an overseas Atal Incubation Center at IIT Delhi Abu Dhabi, extending AIM’s footprint beyond India. This marked a transition from a purely national mission to a globally connected innovation platform and reflected AIM’s ambition to position India as a partner in solving shared global challenges.

How are Industrial Accelerators driving sectoral innovation?

AIM’s work on sectoral innovation launchpads began with the Ministry of Defense through the co-creation of the Innovation for Defense Excellence, or iDEX, platform. iDEX established a credible pathway for startups to co-develop solutions with the government, access funding, and engage with procurement systems.

Building on that experience, AIM is now working with the Ministry of Agriculture to establish Innovation for Agriculture Excellence, or iAEX, and is pursuing similar platforms across other ministries.

The Industrial Accelerator Program complements these efforts by supporting high-TRL startups that are ready for commercialization and scale. These accelerators are industry-led. Corporate partners define sector-specific challenges, provide technical and functional mentoring, enable pilots and co-development, and co-fund both accelerator operations and startup growth.

The objective is to address real sectoral needs while helping startups integrate into supply chains, attract follow-on capital, or scale through strategic partnerships and acquisitions.

How is AIM supporting AI-led healthcare startups?

Healthcare remains a priority sector for AIM, especially for deep-tech startups working on AI-driven clinical and surgical solutions.

The Deeptech Reactor is being designed to address the specific challenges such startups face, including capital intensity, testing and validation requirements, and regulatory complexity. Support is expected to include blended funding, domain-specific mentorship from clinicians and medtech experts, and paid pilot opportunities with hospitals and clinical networks to enable real-world validation.

In parallel, AIM intends to work with health and regulatory authorities to establish policy and regulatory sandboxes that clarify approval pathways, data governance, and safety standards. The aim is to help startups move from prototype to early adoption more efficiently.

How is AIM shortening the lab-to-clinic gap?

A persistent constraint in deep-tech healthcare has been fragmentation between AI researchers, clinicians, and life-science labs. Through the Deeptech Reactor, we are encouraging joint problem definition, shared R&D pathways, and closer collaboration between academia and startups.

By aligning incentives and integrating data, algorithms, and biological research from the outset, clinical deployment is treated as a design objective rather than a downstream possibility. This approach is intended to reduce friction and shorten the lab-to-clinic translation cycle.

How does AIM measure impact?

AIM measures impact through a structured framework that combines quantitative KPIs, periodic reporting by incubators and startups, and an assessment model developed with the World Bank and IIT Delhi.

Across Atal Incubation Centers and challenge-based programs such as Atal New India Challenges, we track indicators including startup survival, funding mobilized, revenue generation, IP creation, and jobs created. Commercialization milestones such as product launches, first customers, and market entry are central to evaluation.

Under AIM 2.0, impact assessment is being refined to reflect the realities of deep-tech innovation, including longer development cycles and higher capital requirements. While public reporting does not yet disaggregate sub-segments such as AI-driven surgical tools, healthtech remains a priority domain within the framework.

What comes next for AIM?

Over the next three to five years, AIM’s focus is on moving India’s deep-tech ecosystem from fragmented support mechanisms to mission-oriented platforms capable of absorbing scientific risk and delivering deployable solutions.

This includes building integrated Deeptech Reactors that combine patient capital, advanced R&D infrastructure, clinical and industrial testbeds, and regulatory support. We are also strengthening academic spin-outs, founder formation, and demand-linked innovation so that research outcomes align more closely with real-world needs.

The broader objective is to position India as a credible global hub for deep-tech and AI-enabled healthcare innovation, rather than only a source of early-stage ideas.