Feb 14, 2026
The Indian government has approved a new $1.1 billion state-backed venture capital program to finance startups, according to a report from Yahoo Finance. The Rs100 billion fund, first outlined in the January 2025 budget speech by India’s finance minister, received cabinet approval more than a year after its initial announcement, allowing for deployment to begin.
The program is structured as a fund of funds, meaning the government will channel capital into startups indirectly by committing money to private investment firms. This new iteration is designed to be more targeted than a previous 2016 program, focusing on deep-tech and manufacturing startups that require longer time horizons and larger capital amounts. The government stated the fund will also aim to back early-stage founders, expand investment beyond major cities, and strengthen India’s domestic venture capital industry, particularly smaller funds.
Official data released alongside the announcement indicated that the previous 2016 program committed Rs100 billion to 145 private funds, which subsequently invested more than Rs255 billion (approximately $2.8 billion) in over 1,370 startups. At the announcement, IT minister Ashwini Vaishnaw highlighted the growth of India’s startup ecosystem, with figures showing the number of startups rising from fewer than 500 in 2016 to more than 200,000 today. The data indicated that more than 49,000 startups were registered in 2025 alone, the highest annual total on record.
The cabinet approval follows recent changes to India’s startup rules intended to ease pressure on deep-tech companies. New Delhi doubled the period for which such firms are classified as startups to 20 years and raised the revenue threshold for startup-specific tax, grant, and regulatory benefits to Rs3 billion (about $33 million), up from Rs1 billion previously.
The approval comes just ahead of the government-backed India AI Impact Summit, where global AI companies including OpenAI, Anthropic, Google, Meta, Microsoft, and Nvidia are scheduled to participate alongside Indian corporates such as Reliance Industries and Tata Group. India, with its large population and more than a billion online users, is noted as an increasingly attractive market for global tech companies seeking to expand their user base.
Source: IndexBox Market Intelligence Platform
