India is witnessing a golden era of entrepreneurship. With the rise of over 100 unicorns and thousands of thriving startups, the Indian government has played a pivotal role in nurturing this innovation-driven ecosystem. From seed funding to incubation, and from tax benefits to infrastructural support, the government has introduced several startup-focused funding schemes and initiatives to empower entrepreneurs and reduce barriers to growth.
This article explores major government funds, schemes, and financial support available for Indian startups as of 2025.
1. Startup India Seed Fund Scheme (SISFS)
Launched by: Department for Promotion of Industry and Internal Trade (DPIIT)
Fund Corpus: ₹945 Crores
Launched in: April 2021
Objective: To provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization.
Key Highlights:
- Up to ₹20 lakhs for validation of proof of concept or prototype development.
- Up to ₹50 lakhs for market entry, commercialization, or scale-up.
- Disbursed through incubators across India.
- Over 450 incubators and more than 1,800 startups supported as of 2025.
Eligibility:
Must not have received over ₹10 lakhs in grants from any other central scheme.
DPIIT-recognized startup.
Not more than 2 years old at the time of application.
2. Fund of Funds for Startups (FFS)
Launched by: Small Industries Development Bank of India (SIDBI)
Total Fund Corpus: ₹10,000 Crores
Started in: 2016 (ongoing till 2025)
Objective: To support SEBI-registered venture capital (VC) and alternative investment funds (AIFs), which in turn invest in early-stage startups.
Key Features:
- No direct funding to startups; funds flow through VC firms.
- Over ₹9,500 crores committed across 129 AIFs as of March 2025.
- More than 1,000 startups benefited across diverse sectors.
Impact:
Supports creation of a strong VC ecosystem in India.
Boosts institutional funding for Indian startups.
3. Atal Innovation Mission (AIM)
Implemented by: NITI Aayog
Focus: Innovation, Incubation, Research, and Product Development
Major Programs under AIM:
- Atal Incubation Centers (AICs): Financial support up to ₹10 crores to establish world-class incubators.
- Atal Community Innovation Centers (ACIC): Targeting underserved regions to drive innovation locally.
- Atal New India Challenges (ANIC): Grants to startups solving national challenges in sectors like agriculture, health, and sustainability.
Impact:
Support for more than 2,000 startups under AIM initiatives.
Over 70 AICs set up.
4. Biotechnology Ignition Grant (BIG)
Implemented by: Biotechnology Industry Research Assistance Council (BIRAC), under the Department of Biotechnology
Grant Amount: Up to ₹50 Lakhs
Objective: To support biotech startups and innovators for early-stage proof-of-concept research.
Eligibility:
- Startup must be less than 5 years old.
- Should be working on biotech-related product innovation.
Focus Areas: Healthcare, diagnostics, agriculture, industrial biotech, and medical devices.
5. Dairy Entrepreneurship Development Scheme (DEDS)
Launched by: Department of Animal Husbandry and Dairying
Objective: To promote self-employment in the dairy sector through startups.
Financial Support:
- Subsidy up to 33.33% (₹7 lakhs maximum for general and ₹9 lakhs for SC/ST entrepreneurs).
Applicable For:
Dairy startups, milk collection, cold chain supply businesses, and cattle feed manufacturers.
6. MUDRA Loans (Micro Units Development and Refinance Agency)
Launched under: Pradhan Mantri MUDRA Yojana (PMMY)
Loan Categories:
- Shishu: Loans up to ₹50,000
- Kishore: ₹50,000 to ₹5 Lakhs
- Tarun: ₹5 Lakhs to ₹10 Lakhs
Ideal For: Small startups, MSMEs, and early-stage businesses seeking capital without extensive collateral requirements.
Offered Through: Banks, MFIs, NBFCs, and cooperative societies.
7. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Launched by: Ministry of MSME and SIDBI
Purpose: To offer collateral-free credit to micro and small businesses.
Loan Coverage: Up to ₹5 crores
Guarantee Coverage: Up to 75%-85% of loan amount
Impact:
- Helps startups access formal credit from banks.
- Especially beneficial for tech and service-based startups with limited assets.
8. State-Specific Startup Policies and Funds
States with Strong Startup Funds in 2025:
Kerala: Kerala Startup Mission (KSUM) with grants, seed funds, and scale-up support
Karnataka: Elevate Program, Idea2PoC Grants
Telangana: T-Hub & T-Fund
Maharashtra: Mumbai FinTech Hub
Gujarat: iCreate and Startup Gujarat
Tamil Nadu: TN Startup & Innovation Mission.
Tax & Regulatory Benefits for DPIIT-Recognized Startups
Fast-track Patent Filing: With up to 80% fee reduction.
Income Tax Exemption: For 3 consecutive years out of 10.
Capital Gains Tax Exemption: On investment in eligible startups.
Angel Tax Relief: Exemption under Section 56(2)(viib).
