Finance Minister Nirmala Sitharaman reinforced the government's commitment to the Indian start-up ecosystem in the 2025-26 budget. The most important announcements included an expansion of the Fund of Fund for Startups (FFS), a committed Deep -Tech fund, both aimed at exceeding an important capital into emerging companies, and improving the credit guarantee.
The start -up sector, which is expected to deliver 100 billion US dollars to India's GDP by 2030, increases significantly from these measures.
Strengthening the fund of the funds
In addition to the existing allocation that was developed to support companies in the early stage, Sitharaman announced a fund for startups of 10,000 crore for startups. Instead of investing directly in startups, the scheme channels capital through Sebi-registered alternative investment funds (AIFS), which then use funds via equity and equity instruments in highly potential Indian startups.
Siddarth Pai, founding partner and CFO of 3ONE4 Capital and co-chair of the IVCA regulatory committee, lifted the importance of the fund of 10,000 Crore funds of 10,000 crore, which has already catalized over 90,000 MRD. GBP for investments for Indian startups. “This step will increase the participation of cash capital and accelerate entrepreneurial activities in India,” he said.
Prahanth Prakash, founding partner at Accel India, repeated similar feelings. “The Union budget forms a strong basis for Viksit Bharat and leads to transformative reforms that redefine the economic and entrepreneurial landscape of India. With this fund of the fund, the government of India Start -up Ecosystem for exponential growth is attached, ”he noted.
In order to further support startups, Sitharaman also announced an improvement in the loan guarantee cheman, which increases the guaranteed cover of 10 billion GBP to 20 billion GBP, while the guarantee fee for loans in 27 as part of Atmanirbhar Bharar .
Rajesh Rathi, Managing Director of Gastech, who spoke in a Cii -Roundtable in Bengaluru, welcomed the increased assignment. “This step almost doubles the existing fund size, and the improvement of the loan guarantee of 5 billion GBP to 10 billion GBP is further supported by startups,” he said.
Access to loans was a continued challenge for startups, since many are still unprofitable in their early years. According to PAI, the expansion of the loan guarantee system, which increases the cover to 20 billion GBP, could stimulate the banks to insure start -up loans, which reduces its dependence on the compilation thinner.
Deeptech Push and Credit Support
Sitharaman also emphasized the commitment of the government for Deep Tech Innovation – a step that the interest groups of industry described as crucial in view of the quick development of AI. The budget introduced a deeply oriented fund for funds with an assignment of 20,000 billion GBP in order to accelerate progress in critical technologies such as AI, Quantum Computing and semiconductor research.
Prakash welcomed this development and explained: “Researching a deep -tech fund for funds is an exciting step to promote innovations in critical technologies. This step corresponds to India's vision of leading the global innovation curve and ensures that local startups can compete at the international level. “
The government also announced 10,000 grants for technological research in ITS and IISC, whereby the financial support was improved as part of the PM research scholarship program. This initiative aims to strengthen the Indian research and innovation pipeline. “This will promote a new generation of deep-tech entrepreneurs who enable India to build first-class, technological startups that not only solve local challenges, but also shape global markets,” added Prahanth.
Pai emphasized that the Deep Tech Fund of Funds will provide long-term capital that is required for deep-tech companies in India. “If this is effectively structured, this will be an enormous thrust for F&E in India and promote basic research and its possible commercialization,” he said.
Anirudh A. Damani, managing partner of Artha Venture Fund, emphasized how important it is to structure the Deep Tech Fund as a fund for funds in order to strengthen professional fund managers in high-risk sectors with great reward. “A long -term capital obligation will strengthen F&E, basic research and commercialization in India,” he noted.
Future vision for startups
The Union Budget 2025 describes a transformative vision for the start -up ecosystem of India. The infusion of 10,000 crore by FFS increases access to capital, in particular in favor of start -ups in aspiring sectors. In the meantime, the focus on Centers of Excellence (Coes) and Deep Tech Investments will further strengthen India in the most modern technology development.
Arhana Jahagirdar, founder and managing director of Rukam Capital and director at Bootstrap Incubation and Advisory Foundation, emphasized the need for a holistic approach. “We hope that the VC ecosystem will be taken into account in addition to the startup ecosystem, since the availability of risk capital for the goal of India is an essential part of the world's leading startup hub,” she said.
The government's depth of the government corresponds to the innovation effort of £ 1 Lakh Crore announced last year. Pai found that artificial intelligence (AI) falls under this roof and that the guidelines under the Indian AI mission could aim at a directive that could further accelerate growth in this area.