India Approves $1.1 Bn Fund for Deep-Tech Startups

• India approves a 100 billion rupee ($1.1 billion) fund to support AI and advanced manufacturing startups
• The new programme will invest public capital in private firms to back startups
• Startup funding in India dropped 17% in 2025, with a 39% fall in funding rounds

India's cabinet approved a state-backed venture capital programme which allocates 100 billion rupees (approximately $1.1 billion) to fund high-risk startup ventures in artificial intelligence and advanced manufacturing.

The India deep-tech fund, a $1.1 billion fund, aims to strengthen Indian startups by boosting deep tech India through increased government funding, supporting AI startups India and semiconductor startups, and reinforcing the broader innovation ecosystem under the evolving startup policy India.

The initiative, which the finance minister introduced during her January 2025 budget speech, received formal approval this week, nearly a year after its initial announcement. The programme will function as a "fund of funds" by directing public funds to private investment companies, which will use those resources to make startup investments.

The new programme has been created to achieve more precise objectives when compared to the 2016 programme, which it replaces. The previous scheme also committed 100 billion rupees and funded 145 private investment vehicles, which together invested more than 255 billion rupees into over 1,370 startups, according to government data released on February 14.

Also Read: PM Modi Approves Rs 10,000 Cr Startup India Fund

The announcement aligns with the start of the India AI Impact Summit, a government-sponsored event that will bring together international technology executives from OpenAI, Google, Meta, Microsoft, Nvidia and Indian companies such as Reliance Industries and Tata Group. The summit will showcase India’s increasing commitment to artificial intelligence and innovative technologies.

The funding situation for Indian startups has become more difficult. The amount of funding received by the startups reached $10.5 billion in 2025, which represented a 17% decline from the previous year.

The funding rounds experienced a 39% decrease as only 1518 transactions occurred throughout the period. The new venture capital program will drive development across emerging technology sectors despite existing challenges.