Top Government Schemes for Startups in India

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India is becoming one of the world’s fastest-growing startup ecosystems, with over 1,40,000 registered startups contributing to innovation, employment, and economic growth. To fuel this growth, the Indian government has introduced several schemes that provide funding, tax exemptions, infrastructure support, and market access to startups.

Navigating these Government Schemes for Startups can be challenging, so we’ve mapped out the top government schemes that every startup and aspiring entrepreneur must know.

1. Startup India Initiative

Launched: 2016
Objective: To create an ecosystem that promotes innovation and entrepreneurship through policy support, tax incentives, and easier compliance for startups.

Key Benefits:

• 3-year tax holiday on profits for eligible startups (Section 80-IAC of the Income Tax Act)
• Fund of Funds (₹10,000 Cr corpus) managed by SIDBI to provide capital access through alternative investment funds (AIFs)
• Self-certification under labor and environmental laws
• Simplified company registration through SPICe+

2. Stand-Up India

Launched: 2016
Objective: To promote entrepreneurship among SC/ST and women entrepreneurs by providing easy access to loans for new businesses.

Key Benefits:

• Loans between ₹10 lakh and ₹1 crore
• Available for manufacturing, services, and trading sectors
• Repayment period of up to 7 years with a moratorium of 18 months
• Encourages inclusivity in entrepreneurship

3. Startup India Fund of Funds (FFS)

Launched: 2016
Objective: To increase the availability of capital for startups by investing in venture capital and alternate investment funds that support early-stage ventures.

Key Benefits:

• ₹10,000 crore corpus distributed through SIDBI to alternate investment funds (AIFs)
• Indirect funding model, supporting multiple startups through VCs.
• No direct investment in startups, but facilitates capital infusion through institutional investors.

4. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Launched: 2000
Objective: To provide collateral-free loans to micro and small enterprises (MSMEs), including startups, and encourage financial institutions to lend without security requirements.

Key Benefits:

• Collateral-free credit up to ₹2 crores
• Coverage of both term loans and working capital facilities
• Encourages risk-free lending by financial institutions

5. Atal Innovation Mission (AIM)

Launched: 2016
Objective: To foster innovation and entrepreneurship in India by promoting initiatives in education, incubation, and research.

Key Benefits:

• Establishment of Atal Tinkering Labs (ATL) in schools to encourage innovation from a young age
• Creation of Atal Incubation Centers (AICs) to support startups with infrastructure and seed funding
• Mentorship programs and partnership opportunities

6. SAMRIDH Scheme (Startup Accelerator of MeitY for Product Innovation, Development & Growth)

Launched: 2021
Objective: To support early-stage startups by providing mentorship, access to corporate accelerators, and co-investment with VCs and angel investors.

Key Benefits:

• Provides financial support of up to ₹40 lakh per startup by co-investing with venture capitalists or angel investors to help early-stage startups scale.
• Provides access to corporate accelerators, mentorship programs, and industry networks.
• Focuses on deep-tech and digital innovation.

7. Support for International Patent Protection in Electronics & IT (SIP-EIT)

Launched: 2014
Objective: To encourage startups to protect their innovations internationally by reimbursing patent filing expenses.

Key Benefits:

• Reimbursement up to ₹15 lakh per patent
• Covers filing costs, attorney fees, and examination fees
• Strengthens intellectual property (IP) protection for Indian startups

8. Digital India Bhashini Initiative

Launched: 2022
Objective: To promote AI-based language solutions and support startups working on multilingual and natural language processing (NLP) technologies.

Key Benefits:

• Government support for AI-driven Indic language solutions
• Encourages technology innovation for regional and local languages
• Connects startups with market opportunities

9. E-Marketplace (GeM) for Startups

Launched: 2016
Objective: To facilitate direct access to government procurement for startups.

Key Benefits:

• Startups can register as sellers on the GeM portal
• No tender requirements for certain startups
• Increased visibility to government buyers

10. MUDRA Banks (Pradhan Mantri MUDRA Yojana – PMMY)

• Launched: 2015
• Objective: To provide micro-financing support for small businesses and startups (in service sector and small trading businesses).
• Key Benefits:
  • Loans under three categories: Shishu (₹50,000), Kishor (₹5 lakh), and Tarun (₹10 lakh).
  • No collateral required.
  • Encourages self-employment and entrepreneurship among micro and small enterprises (MSEs), particularly non-corporate small businesses in manufacturing, trading, services, and select agriculture-allied activities.

11. MeitY Startup Hub (MSH)

• Launched: 2019
• Objective: To promote deep-tech innovation and support startups working in IT, AI, cybersecurity, and fintech.
• Key Benefits:
  • Provides financial support and accelerator programs
  • Access to government R&D labs for technology startups
  • Mentorship and networking opportunities with industry experts

12. Startup India Seed Fund Scheme (SISFS)

• Launched: 2021
• Objective: To provide seed funding for early-stage startups to develop prototypes and conduct market validation.
• Key Benefits:
  • Grants up to ₹20 lakh for prototype development
  • Investment up to ₹50 lakh as convertible debentures
  • Access to incubators across India for infrastructure and mentoring

13. Aatmanirbhar Bharat App Innovation Challenge

• Launched: 2020
• Objective: To promote homegrown app development across categories like AI, gaming, health, and education.
• Key Benefits:
  • Financial rewards for top apps across multiple categories.
  • Encourages development in AI, gaming, e-learning, health, and fintech.
  • Support for scaling successful apps in global markets.

14. SPICe+ (Simplified Proforma for Incorporating a Company Electronically)

Launched: 2020 (as an upgrade to SPICe)

Objective: To simplify company incorporation and related regulatory approvals through a single-window online process.

Key Benefits:

• Provides integrated services for company incorporation, including PAN, TAN, GST, EPFO, ESIC, and bank account opening in a single application.
• Reduces compliance burden and time required for business registration.
• Mandatory for all new company registrations, including Private Limited Companies, One Person Companies (OPCs), Section 8 Companies, and Producer Companies incorporated in India.

15. Software Technology Park (STP) Scheme

• Launched: 1991
• Objective: To boost IT and software export sectors by offering tax benefits and infrastructure support.
• Key Benefits:
  • 100% tax exemption on software exports.
  • Duty-free import of capital goods.
  • Access to world-class infrastructure and incubation facilities.

16. Dairy Processing and Infrastructure Development Fund (DIDF)

• Launched: 2017
• Objective: To provide financial support for dairy startups and cooperatives to modernize and expand processing capacities.
• Key Benefits:
  • Long-term loans at concessional interest rates.
  • Financial assistance for milk processing, chilling plants, and modern dairy equipment.
  • Strengthens the dairy value chain for entrepreneurs.

17. Multiplier Grants Scheme (MGS)

• Launched: 2016
• Objective: To promote industry-academia collaboration for R&D projects in electronics, IT, and software development.
• Key Benefits:
  • The government matches industry contributions for R&D projects.
  • The maximum grant for individual industry projects is ₹2 crore, but for collaborative projects, it can go up to ₹10 crore.
  • Supports innovation in electronics, IT, and software products.

Tabular Comparison of Top Government Schemes for Startups in India

Scheme Name	Launched	Objective	Key Benefits
Startup India Initiative	2016	Promote innovation & entrepreneurship	3-year tax holiday, ₹10,000 Cr Fund of Funds, self-certification under laws, simplified registration
Stand-Up India	2016	Support SC/ST & women entrepreneurs	Loans between ₹10L-₹1 Cr, 7-year repayment, promotes inclusivity in entrepreneurship
Startup India Fund of Funds	2016	Increase capital for startups	₹10,000 Cr corpus through SIDBI, indirect funding via VCs, no direct investment in startups
CGTMSE	2000	Collateral-free loans to MSMEs	Up to ₹2 Cr collateral-free credit, covers term loans & working capital
Atal Innovation Mission (AIM)	2016	Foster innovation & entrepreneurship	Atal Tinkering Labs, Atal Incubation Centers, mentorship & partnership opportunities
SAMRIDH Scheme	2021	Support early-stage startups	Up to ₹40 lakh financial support, access to accelerators, focus on deep-tech & digital innovation
SIP-EIT	2014	International patent protection	Up to ₹15 lakh reimbursement for patent filing, attorney & examination fees
Digital India Bhashini Initiative	2022	AI-based language solutions	Support for Indic language tech, connects startups to market opportunities
GeM for Startups	2016	Direct access to government procurement	Startups can register as sellers on GeM, no tender requirements for some startups
MUDRA Banks (PMMY)	2015	Micro-financing for small businesses	Loans under Shishu (₹50k), Kishor (₹5L), Tarun (₹10L), no collateral required
MeitY Startup Hub (MSH)	2019	Promote deep-tech innovation	Financial support, accelerator programs, access to R&D labs, mentorship
Startup India Seed Fund Scheme (SISFS)	2021	Seed funding for early-stage startups	Grants up to ₹20L for prototypes, up to ₹50L investment as convertible debentures
Aatmanirbhar Bharat App Challenge	2020	Promote homegrown app development	Financial rewards for top apps in AI, gaming, e-learning, health, fintech
SPICe+	2020	Simplify company incorporation	Integrated services for registration (PAN, GST, EPFO, etc.), single-window process
Software Technology Park (STP)	1991	Boost IT & software export sectors	100% tax exemption on software exports, duty-free import of capital goods
DIDF	2017	Modernize dairy startups & cooperatives	Long-term loans at concessional interest, support for milk processing, chilling plants
Multiplier Grants Scheme (MGS)	2016	Industry-academia collaboration for R&D	Govt matches industry contributions, grants up to ₹2 Cr (individual), ₹10 Cr (collaborative projects)

Conclusion

These schemes offer immense opportunities for startups to access capital, mentorship, and government markets. At Treelife, we help startups identify the right schemes, simplify compliance, and maximize growth opportunities.

Need help navigating these schemes? Contact us at [email protected]