India pledges fresh billion for startups

India has unveiled a new $1.15 billion Fund of Funds for startups, along with regulatory reforms and a nuclear energy program, in a bid to boost tech innovation and clean energy in the country. The announcement was made by Finance Minister Nirmala Sitharaman during the presentation of the federal budget for 2025-26.

The Fund of Funds will build on previous startup funding programs that have already deployed over $1 billion from alternate investment funds. The new fund will have an expanded scope, although specific focus areas were not detailed in the budget.

In addition to the fund, a High-Level Committee for Regulatory Reforms will be established to review non-financial sector regulations, certifications, licenses, and permissions within a year. This initiative aims to strengthen economic governance and ease compliance burdens for startups and technology companies.

The government is also considering the creation of a Deep Tech Fund of Funds to support next-generation startups working on advanced technologies, as part of efforts to enhance India’s position in emerging tech sectors.

These measures come as India’s startup ecosystem continues to grow and play a significant role in job creation. The government is banking on innovation and entrepreneurship to achieve its long-term goal of 8% economic growth to meet the job needs of its young population.

The government also announced a $2.3 billion Nuclear Energy Mission to develop indigenous small modular reactors by 2033, as part of the goal to achieve 100 gigawatts of nuclear energy capacity by 2047, with plans to allow private sector participation through amendments to the Atomic Energy Act.

To keep up with technological advancements, the government plans to decriminalize over 100 provisions across various laws through a new Jan Vishwas Bill 2.0. Tax benefits for startups have been extended by five years, with reduced guarantee fees and increased credit guarantee limits for startups in key sectors.

A new scheme will target 500,000 first-time entrepreneurs, particularly women and those from scheduled castes and tribes, providing term loans over the next five years. The government also introduced measures to boost innovation in electronics manufacturing and trade documentation through platforms like BharatTradeNet.