Startup India Funding & Government Grant
India’s startup ecosystem is growing at an extraordinary pace. Over the past few years, the Government of India has introduced multiple funding programs, grants, seed support schemes, tax exemptions and credit support to help young entrepreneurs transform their ideas into successful businesses. Under the Startup India Mission, thousands of startups have already received financial aid, incubation support, mentoring, and market access.
If you are planning to launch a startup in 2026 or want to scale your existing venture with the help of government support, this detailed guide will help you understand all major Startup India funding schemes and government grants, including eligibility, benefits, documents, interest rates, and application process.
What is Startup India Funding?
Startup India Funding refers to financial, technical, and tax-related support offered by the central government to encourage innovation, entrepreneurship, and job creation. The funding is offered in the form of:
- Government grants
- Seed funding
- Venture capital via government-backed funds
- Soft loans
- Credit guarantee
- Prototype development support
- Women-focused entrepreneurship assistance
The vision behind Startup India funding is to reduce financial challenges for early-stage startups and promote a robust, innovation-driven economy.
Why Government Funding is Important for Startups?
Government-supported funding offers multiple advantages:
- No or Low Interest Burden – Many schemes provide collateral-free loans and low interest rates.
- Non-Dilutive Funding – Some grants do not require equity sharing.
- Early-Stage Support – Helps entrepreneurs build prototypes, test ideas, and run pilot projects.
- Credibility Boost – Government-backed support builds trust among private investors.
- Inclusive Growth – Women entrepreneurs, rural innovators and youth receive special benefits.
Top Government Funding Schemes Under Startup India
Below is a comprehensive list of the most popular and high-impact Startup India funding schemes for 2026:
1. Startup India Seed Fund Scheme (SISFS)
Objective
To provide financial assistance for idea validation, prototype development, market entry and commercialization.
Funding Support
- Up to ₹20 lakh for prototype, development and trials.
- Up to ₹50 lakh for product development and market launch.
Eligibility
- DPIIT-recognized startup.
- Incorporated within 10 years.
- Should not have received more than ₹10 lakh from any central government scheme earlier.
- Must have a business model with high potential for innovation or employment.
Application Process
Apply online through the Startup India portal, where funds are disbursed via incubators.
2. Fund of Funds for Startups (FFS)
Objective
To provide large-scale funding to growing startups via SEBI-registered Alternative Investment Funds (AIFs).
Funding Support
- Government does not invest directly in startups.
- Instead, it invests in selected AIFs who further invest in startups.
- Total budget: ₹10,000 crore corpus.
Ideal For
- Scaling startups
- Tech-based companies
- High-potential and revenue-stage startups
3. Credit Guarantee Scheme for Startups (CGSS)
Objective
To provide collateral-free loans up to ₹5 crore to recognized startups.
Benefits
- Helps startups without assets to secure loans.
- Reduced risk for financial institutions.
- Available via scheduled banks, NBFCs, and financial institutions.
Loan Amount
- Term loan or working capital loan up to ₹5 crore.
4. SIDBI Startup Mitra & SMILE Scheme
SIDBI plays an important role in offering:
- Soft loans
- Venture debt
- Working capital
- Equipment financing
SMILE Scheme Features
- Low rate of interest
- Flexible repayment (up to 10 years)
- Funding between ₹25 lakh to ₹50 crore
Ideal for manufacturing, service startups and MSME transition companies.
5. Atal Innovation Mission (AIM) – Atal Incubation Centers
Objective
To support innovative startups through incubation, mentoring and seed funding.
Funding Support
- Grant up to ₹10 crore to incubators.
- Seed funding to startups through these incubators.
Best suited for tech, manufacturing, IoT, robotics, space-tech and early-stage innovators.
6. TIDE 2.0 (Technology Incubation & Development of Entrepreneurs)
Launched By: Ministry of Electronics & IT
Focus Areas
- AI
- IoT
- AR/VR
- Robotics
- Electronics
- Deep-tech startups
Funding
- Grant up to ₹4 lakh for early-stage
- Up to ₹7 lakh for advanced-stage prototype
7. MSME Innovative Scheme (MSME Idea Hackathon + Incubation)
Support Provided
- Up to ₹15 lakh for developing prototype.
- Seed funding up to ₹1 crore for commercialization.
Best for manufacturing, rural innovations, women entrepreneurs and technology-based MSMEs.
8. Pradhan Mantri Mudra Yojana (MUDRA Loans)
Even though not exclusive for startups, MUDRA is widely used for small startup funding.
Loan Categories
- Shishu: Up to ₹50,000
- Kishore: Up to ₹5 lakh
- Tarun: Up to ₹10 lakh
Benefits
- No collateral required
- Low interest
- Flexible repayment
Ideal for small-scale startups, service businesses, and new entrepreneurs.
9. Biotech Ignition Grant (BIG) by BIRAC
Funding Support
- Grant up to ₹50 lakh for biotechnology-based startup ideas.
Best for med-tech, health-tech, pharma, agritech and bio-innovation startups.
Comparison Table of Startup India Funding Schemes
| Scheme | Type of Funding | Maximum Support | Ideal For |
|---|---|---|---|
| SISFS | Seed Grant | ₹50 lakh | Early-stage startups |
| FFS | Venture Capital | Indirect (AIF-based) | Growth-stage startups |
| CGSS | Credit Guarantee | ₹5 crore | Startups needing collateral-free loan |
| SMILE | Soft Loan | ₹50 crore | Manufacturing & MSME expansions |
| TIDE 2.0 | Tech Grant | ₹7 lakh | Digital & deep-tech |
| MSME Innovative | Prototype + Seed | ₹1 crore | Manufacturing & rural startups |
| MUDRA | Loan | ₹10 lakh | Micro startups |
| BIRAC BIG | Research Grant | ₹50 lakh | Biotech & health-tech |
How to Apply for Startup India Funding? (Step-by-Step)
Follow these steps to apply for any government grant or funding:
Step 1: Get DPIIT Recognition
Visit Startup India official portal → Register your entity → Submit documents → Get DPIIT certificate.
Step 2: Choose the Funding Scheme
Evaluate the right scheme based on your stage—idea stage, prototype stage, development stage, or growth stage.
Step 3: Prepare Documents
Common documents required include:
- Pitch deck
- Business plan
- Financial projections
- Pan + GST registration
- Founders’ KYC
- Prototype / MVP details
- Market analysis
Step 4: Apply on the Specific Portal
Each scheme has a separate portal such as:
- Startup India Portal
- SIDBI Portal
- BIRAC BIG Portal
- MeitY Portal
- MSME Innovation Portal
Step 5: Incubator or Committee Review
Experts evaluate your idea, scalability, innovation, financial viability, and team strength.
Step 6: Approval & Funding
Once approved, the grant/loan is disbursed directly to the startup account or via incubator.
Tips to Increase Approval Chances
- Keep your business plan strong and clear.
- Show market need, real-world problem and customer base.
- Provide accurate financial projections.
- Highlight innovation clearly.
- Mention job creation potential.
- Add technical diagrams, prototype images, or demo links.
Final Words
Startup India funding and government grants are powerful tools for entrepreneurs who want to launch or expand their businesses without heavy financial burden. In 2026, the government is expected to strengthen its focus on technology, green energy, digital innovation, rural entrepreneurship and women-led startups.
If you have a strong idea, proper planning and the right execution strategy, getting funding under these schemes is absolutely achievable. Instead of limiting your vision due to lack of capital, explore these government programs and take the next big step in your entrepreneurial journey.