India has taken a significant step to bolster its tech startup ecosystem by approving a $1.1 billion state-backed venture capital program. The initiative, first introduced in the January 2025 budget speech, aims to fuel innovation in deep tech and manufacturing sectors through private VC investments.
The program, structured as a fund of funds, will operate by injecting government funds into startups indirectly via private investment firms. Unlike its 2016 predecessor, this revamped program focuses on nurturing deep-tech and manufacturing startups, catering to their unique needs for longer-term investments and substantial capital injections. By also targeting early-stage founders and promoting investments in regions beyond major cities, the initiative aims to fortify India’s domestic venture capital landscape, particularly empowering smaller funds.
Highlighting the program’s impact, the IT Minister showcased India’s exponential startup growth trajectory, citing a remarkable surge from under 500 startups in 2016 to over 200,000 today. The announcement coincides with recent regulatory changes benefiting deep-tech enterprises, such as extending the startup classification period to 20 years and revising revenue thresholds for tax benefits.
Source: TechCrunch