Cabinet Boosts Innovation: Second Tranche of Startup India Fund Approved

In a significant boost for India's startup ecosystem, the Cabinet has approved the second phase of the Startup India Fund of Funds Scheme, allocating a substantial Rs 10,000 crore corpus. Union Minister Ashwini Vaishnaw announced this decision, emphasizing the fund's focus on deep tech and early growth stage startups, alongside support for tech-driven innovative manufacturing ventures.

The scheme aims to provide operational flexibilities with increased government contributions in alternative investment funds (AIFs) earmarked for deep tech and high-tech manufacturing sectors. The decision was ratified at a Cabinet meeting last Friday, marking a strategic move to foster a culture of long-term investment and patient capital within the startup sector.

Initially introduced in 2016 with a similar financial commitment, the first tranche of funding has witnessed considerable success. Subsequently, the second phase of Rs 10,000 crore was sanctioned as part of the Union Budget for 2025-26. According to the Department for Promotion of Industry and Internal Trade (DPIIT), more than 2 lakh entities have been recognized as startups, benefiting from incentives under the Startup India action plan.