The Indian cabinet has given the green light to a 100 billion rupee state-backed venture capital program, equivalent to about $1.1 billion, designed to bolster startups in high-risk sectors like AI and advanced manufacturing, as reported by TechCrunch recently.
Initially introduced during the budget speech in January 2025 by the finance minister, the initiative has now received official approval over a year after its proposal. The program is structured as a “fund of funds,” where public funds are allocated to private investment firms that, in turn, support startups.
As per the report, this scheme aims to be more precise in its approach compared to a similar program initiated in 2016. The previous initiative also earmarked 100 billion rupees and directed funds into 145 private investment entities, which collectively invested over 255 billion rupees in more than 1,370 startups, based on government data released on February 14.
This development precedes the India AI Impact Summit, a government-backed gathering expected to attract global tech giants such as OpenAI, Anthropic, Google, Meta, Microsoft, and Nvidia, as well as major Indian corporations like Reliance Industries and Tata Group.
However, funding conditions are becoming stricter. In 2025, Indian startups secured $10.5 billion in funding, marking a decrease of slightly more than 17% from the previous year, with the number of funding rounds dropping by nearly 39% to 1,518 transactions, according to Tracxn data.
