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 SEBI-registered Venture Capital (VC) and Alternate Investment Funds (AIFs) that support early-stage ventures. Also known as the SIDBI Fund of Funds Scheme.
Key Benefits:
- Operates as a “fund of funds”, where SIDBI (Small Industries Development Bank of India) does not invest directly in startups, but channels capital through VCs and AIFs that do.
- ₹10,000 crore corpus managed by SIDBI to be deployed via AIFs investing in DPIIT-recognized startups.
- Supports indirect funding, enabling capital infusion into a large number of startups through institutional investors.
- Aims to mobilize ₹60,000 crore of overall investment into the Indian startup ecosystem.
- Boosts access to funding for early- and growth-stage startups, especially those in underserved regions or sectors.
Updated performance data (as of Jan 2024): ₹17,452 Cr deployed across 939 startups via 129 Alternate
Investment Funds. These AIFs have invested in 939 startups across sectors and stages.
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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
- Total outlay ₹945 Cr, intended to support ≈3,600 startups through 300 incubators
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.
18. Startup India Investor Connect
Launched: March 2023
Objective: To facilitate AI-driven matchmaking between DPIIT-recognized startups and SEBI-registered Alternate Investment Funds (AIFs) through a virtual investment marketplace.
Key Benefits:
- Uses algorithm-based profiling to match startups with relevant investors based on sector, stage, geography, and business model.
- Provides a dedicated investor dashboard to review startup pitch decks, business summaries, and financials.
- Enables startups to build investor-ready profiles and gain curated exposure to over 250+ AIFs.
- Reduces fundraising time by facilitating structured, warm introductions to institutional investors.
- Offers live monitoring of investor-startup engagement and funding outcomes.
19. Credit Guarantee Scheme for Startups (CGSS)
Launched: 2022
Objective: To provide collateral-free credit guarantees to DPIIT-recognized startups, enhancing their access to debt funding through institutional lenders.
Key Benefits:
- Offers collateral-free loan guarantees up to ₹20 crore per eligible startup.
- Operated by the National Credit Guarantee Trustee Company (NCGTC) under the Ministry of Commerce and Industry.
- Available for both term loans and working capital facilities extended by Scheduled Commercial Banks, NBFCs, and other eligible financial institutions.
- Promotes inclusion: guarantees have been extended to 46 startups (including women-led ventures) with ₹132.13 crore sanctioned as of November 2023.
- Boosts lender confidence and encourages debt-based funding for innovative ventures lacking traditional assets or collateral.
The Government of India offers a range of top-schemes for startups including Startup India Seed Fund Scheme and many other initiatives under the Startup India Initiative that provide funding, mentorship, market access and regulatory support for eligible ventures.
Founders can browse, evaluate and apply for these schemes on the official portals.
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Tabular Comparison of Top Government Schemes for Startups in India
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 (Sec 80-IAC), ₹10,000 Cr Fund of Funds, self-certification under laws, simplified registration |
| Stand-Up India | 2016 | Support SC/ST & women entrepreneurs | Loans ₹10 L–₹1 Cr, 7-year repayment, moratorium 18 months, promotes inclusivity |
| Startup India Fund of Funds (FFS) | 2016 | Increase capital availability for startups via AIFs | ₹10,000 Cr corpus through SIDBI, indirect funding via VCs, mobilizes ₹60,000 Cr investment |
| Credit Guarantee Fund Trust for MSMEs (CGTMSE) | 2000 | Collateral-free loans to MSMEs including startups | Up to ₹2 Cr credit without collateral, covers term loans & working capital |
| Atal Innovation Mission (AIM) | 2016 | Foster innovation & entrepreneurship | Atal Tinkering Labs & Incubation Centers, mentorship, seed funding, partnership programs |
| SAMRIDH Scheme | 2021 | Support early-stage startups through co-investment | Financial support up to ₹40 L, corporate accelerator access, deep-tech focus |
| SIP-EIT | 2014 | Support international patent protection | Reimbursement up to ₹15 L per patent (filing, attorney, examination fees) |
| Digital India Bhashini Initiative | 2022 | Promote AI-based Indic language solutions | Govt support for AI/NLP startups, market access for regional language tech |
| Government e-Marketplace (GeM) for Startups | 2016 | Enable direct govt procurement access for startups | Seller registration on GeM, tender exemptions for eligible startups |
| MUDRA Banks (PMMY) | 2015 | Provide micro-financing for small businesses and startups | Loans under Shishu (₹50 K), Kishor (₹5 L), Tarun (₹10 L); no collateral |
| MeitY Startup Hub (MSH) | 2019 | Promote deep-tech innovation in IT & AI | Financial support, accelerator programs, R&D lab access, mentorship |
| Startup India Seed Fund Scheme (SISFS) | 2021 | Seed funding for early-stage startups | ₹20 L grants for prototype, ₹50 L investment as convertible debentures, 945 Cr outlay |
| Aatmanirbhar Bharat App Innovation Challenge | 2020 | Encourage homegrown app development | Financial rewards for top apps (AI, gaming, ed-tech, health, fintech) |
| SPICe+ Form | 2020 | Simplify company incorporation & approvals | One-stop online form for PAN, GST, EPFO, ESIC, bank account integration |
| Software Technology Park (STP) Scheme | 1991 | Boost IT & software export sectors | 100% tax exemption on software exports, duty-free imports, incubation facilities |
| Dairy Processing & Infrastructure Development Fund (DIDF) | 2017 | Modernize dairy startups & co-operatives | Concessional long-term loans for milk processing & infrastructure |
| Multiplier Grants Scheme (MGS) | 2016 | Promote industry-academia collaboration for R&D | Govt matches industry funding; grants ₹2 Cr (individual) to ₹10 Cr (collaborative) |
| Startup India Investor Connect | 2023 | Facilitate AI-based startup-investor matchmaking | Virtual platform matching DPIIT startups with 250+ AIFs, reduces fundraising time, curated investor access |
| Credit Guarantee Scheme for Startups (CGSS) | 2022 | Provide collateral-free loan guarantees to startups | Loan guarantee up to ₹20 Cr per startup, run by NCGTC, supports debt funding for innovative ventures |
Other Schemes by Ministry of MSME
The Ministry of MSME offers several targeted schemes that complement Startup India initiatives by helping small businesses upgrade technology, enhance quality, and access global markets. Key programs include the Credit Linked Capital Subsidy Scheme (CLCSS) for equipment upgrades, ISO Certification Reimbursement, International Fairs Support, Purchase and Price Preference Policy, and Business Incubators Scheme.
1. Credit Linked Capital Subsidy Scheme (CLCSS)
Launched: Ongoing (Under Ministry of MSME)
Objective: To facilitate technology upgradation for Micro and Small Enterprises (MSEs) by offering financial subsidies on capital equipment purchases.
Key Benefits:
- 15% capital subsidy on eligible plant & machinery purchases.
- Maximum subsidy of ₹15 lakh per unit.
- Applicable for over 750 approved technologies across 51 sectors.
- Reduces upfront cost burden for modernization, enhancing productivity and competitiveness.
Ideal For: MSEs seeking to upgrade outdated machinery or processes.
2. ISO 9000 Certification Reimbursement Scheme
Launched: Ongoing
Objective: To encourage Micro and Small Enterprises (MSEs) to obtain internationally recognized quality certifications.
Key Benefits:
- Reimbursement of expenses incurred in obtaining ISO 9000, ISO 14001, or HACCP certifications.
- Up to ₹75,000 per unit.
- Covers consultancy, certification, and training expenses.
- Promotes global market readiness and compliance with quality standards.
Ideal For: Export-oriented or quality-conscious MSEs aiming for international recognition.
3. International Cooperation Scheme (Support for Participation in International Fairs)
Launched: Ongoing
Objective: To help Indian MSMEs explore international markets by supporting participation in global exhibitions, trade fairs, and B2B events.
Key Benefits:
- Financial assistance for airfare, stall charges, freight, and publicity material.
- Covers both individual entrepreneurs and MSME delegations.
- Encourages exposure to international business ecosystems and export opportunities.
Ideal For: MSMEs with global ambitions or export-ready products.
4. Purchase and Price Preference Policy for MSEs
Launched: Active under Public Procurement Policy
Objective: To ensure that Micro and Small Enterprises receive preference in public procurement by central government ministries, departments, and PSUs.
Key Benefits:
- 25% of all government procurement reserved for MSEs.
- Among this, 4% for SC/ST-owned MSEs and 3% for women-owned MSEs.
- Exemption from EMD (Earnest Money Deposit).
- Price preference of up to 15% over large enterprises in bid evaluation.
Ideal For: Registered MSEs interested in supplying to government or public sector.
5. Business Incubators Scheme (MSME-DO)
Launched: Ongoing under Ministry of MSME’s “Support for Entrepreneurial and Managerial Development” initiative.
Objective: To nurture innovative business ideas by providing funding support through business incubators hosted at reputed institutions.
Key Benefits:
- Up to ₹15 lakh support per business idea for validation and commercialization.
- Incubators receive support of ₹1 crore for strengthening their infrastructure.
- Encourages student entrepreneurs, innovators, and early-stage startups in MSME sectors.
- Fosters job creation, tech innovation, and inclusive entrepreneurship.
Ideal For: Aspiring entrepreneurs with proof-of-concept ideas needing institutional incubation.
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]
Disclaimer:
Treelife provides legal, financial, and compliance advisory services to startups and investors. We do not offer direct funding, grants, or financial assistance under any government schemes, including those mentioned in this article. For funding support, please refer to the official government portals or authorized incubators associated with each scheme.
