Commerce Ministry Eyes Additional Funding for Boosting Innovation in India’s Startup Ecosystem
The Ministry of Commerce is understood to be exploring avenues to seek more funding for startups in the upcoming Budget, as it looks to energize innovation nationwide. Sources indicate the new government may deliver its Budget for fiscal 2024-25 next month, presenting an opportunity for further support.
The ministry’s flagship seed financing program, dubbed the Startup India Seed Fund Scheme and launched in 2021 with an endowment of Rs. 945 crore, is scheduled to conclude this year. Recognizing the crucial role that early capital plays, officials are working on a proposal for a successor initiative with a similar design. Access to funds is pivotal for founders in the initial developmental stages, when backing can often determine a startup’s viability.
Introduced last year, the seed fund extends funding to eligible startups affiliated with approved incubators across the country, providing Rs. 177 crore collectively as of April 2023. Startups acknowledged by the Department for Promotion of Industry and Internal Trade fall under its umbrella. Candidates require at least 51% of shares held by Indian promoters.
In addition, sources hint a dedicated policy framework for deep tech startups may be on the anvil. With over 1,000 ventures backed to date, the Ministry of Commerce is leaving its imprint on the entrepreneurial movement and hoping to do more. Its request for extra allocations underlines both the need for early-stage capital and potential of India’s innovation economy. All eyes are now on what transpires in the next budgetary announcement.
