India Launches $1.15 Billion Startup Fund
India has announced a new $1.15 billion Fund of Funds for startups, alongside sweeping regulatory reforms and an ambitious nuclear energy program, as the government aims to drive technological innovation, entrepreneurship, and clean energy in the world’s fifth-largest economy.
Strengthening the Startup Ecosystem
Finance Minister Nirmala Sitharaman, while presenting the 2025-26 federal budget, revealed that the new fund builds upon existing startup funding initiatives that have already deployed over $1 billion through alternate investment funds. This latest initiative will have an expanded scope, though specific focus areas were not detailed.
Additionally, the government is considering the creation of a separate Deep Tech Fund of Funds, designed to support next-generation startups working on advanced technologies, further solidifying India’s position in emerging tech sectors.
With over 100 unicorn startups and more than $100 billion in venture capital investments over the past decade, India has become a global startup powerhouse. The government’s continued push for innovation is expected to create more job creation and sustain economic growth in the coming years.
Regulatory Overhaul to Ease Compliance
The government also announced the establishment of a High-Level Committee for Regulatory Reforms, which will review all non-financial sector regulations, certifications, licenses, and permissions within a year. This initiative aims to promote trust-based economic governance and reduce compliance burdens for startups and tech companies.
Additionally, India will introduce the Jan Vishwas Bill 2.0, which seeks to decriminalize over 100 legal provisions across multiple industries, ensuring regulations remain business-friendly and aligned with global standards.
Startups will also benefit from extended tax benefits, allowing companies incorporated before April 2030 to claim key deductions. For startups in 27 critical sectors, the government has reduced guarantee fees to 1% while doubling the credit guarantee limit to $230,000.
A new scheme targeting 500,000 first-time entrepreneurs, with a focus on women and underrepresented communities, will offer term loans of up to $24,000 over the next five years, building on the success of the Stand-Up India initiative.
$2.3 Billion Nuclear Energy Push
Beyond startups, India is making a bold commitment to nuclear energy with a $2.3 billion Nuclear Energy Mission, which aims to develop at least five indigenous small modular reactors by 2033. This initiative is part of a broader goal to achieve 100 gigawatts of nuclear energy capacity by 2047.
To support this effort, the government is planning amendments to the Atomic Energy Act, enabling private sector participation in the nuclear energy industry for the first time.
Boosting Electronics and Fintech Innovation
The budget also introduced several incentives aimed at electronics manufacturing and fintech innovation, including a presumptive taxation scheme for non-residents establishing manufacturing facilities in India.
Additionally, the government proposed BharatTradeNet, a unified platform for trade documentation and financing solutions, which could benefit fintech startups by streamlining cross-border transactions and access to capital.
India’s Long-Term Economic Vision
These measures come as India’s economy is projected to grow between 6.3% and 6.8% in the coming year, with a longer-term ambition of reaching 8% growth to meet job creation demands for its young workforce.
By prioritizing innovation, simplifying regulations, and investing in future industries, the Indian government is positioning itself as one of the world’s most attractive markets for venture capital and high-growth startups. With continued support for deep tech, clean energy, and digital transformation, India is laying the foundation for its next era of economic expansion.
