Last Updated on Dec 28, 2025 by Puneet S Bansal
India has emerged as one of the world’s largest startup ecosystems, supported by policy reforms, digital infrastructure, and targeted government intervention. Government schemes for startups in India are designed to reduce early-stage financial risk, simplify compliance, promote innovation, and improve access to capital across sectors.
Most central support programmes operate under the umbrella of the Startup India Initiative, which acts as the primary gateway for recognition, funding eligibility, and regulatory benefits.
Top Government Schemes for Startups in India
1. Startup India Initiative
Launched by: Government of India
Administered by: Department for Promotion of Industry and Internal Trade (DPIIT)
Key benefits:
- DPIIT recognition for eligible startups
- Income tax exemption under Section 80-IAC
- Angel tax exemption (subject to approval)
- Fast-track patent and IPR support with fee rebates
- Self-certification under select labour and environmental laws
- Relaxed public procurement norms
Why it matters: DPIIT recognition is mandatory for most other government startup schemes.
2. Startup India Seed Fund Scheme (SISFS)
Objective: Support early-stage startups at the idea, prototype, and market-entry stage.
Funding support:
- Grants up to ₹20 lakh for proof of concept and validation
- Up to ₹50 lakh through debt or convertible instruments via approved incubators
Best suited for: Idea-stage and pre-revenue startups that are not yet venture-capital ready.
3. Fund of Funds for Startups (FFS)
Managed by: Small Industries Development Bank of India (SIDBI)
Total corpus: ₹10,000 crore
How it works:
- Government invests in SEBI-registered Alternative Investment Funds (AIFs)
- AIFs, in turn, invest in high-potential Indian startups
Ideal for: Growth-stage startups seeking Series A or later-stage capital.
4. Credit Guarantee Scheme for Startups (CGSS)
Purpose: Enable collateral-free loans for DPIIT-recognised startups.
Key advantages:
- Government-backed guarantee cover to banks and NBFCs
- Easier access to working capital and term loans
- Reduced risk for lenders
Suitable for: Revenue-generating startups without tangible collateral.
5. Pradhan Mantri Mudra Yojana (PMMY)
Target group: Micro and small startups, especially non-corporate entities.
Loan categories:
- Shishu: Up to ₹50,000
- Kishore: Up to ₹5 lakh
- Tarun: Up to ₹10 lakh
Use case: Early operational expenses, equipment purchase, and working capital.
6. Stand-Up India Scheme
Focus: Women entrepreneurs and SC/ST founders.
Loan amount: ₹10 lakh to ₹1 crore
Eligibility condition: Greenfield enterprise (first-time venture)
Impact: Promotes inclusive entrepreneurship and access to formal credit.
7. Atal Innovation Mission (AIM)
Implemented by: NITI Aayog
Key components:
- Atal Incubation Centres (AICs)
- Atal Tinkering Labs (ATLs)
Best for: Deep-tech, AI, climate tech, health tech, and innovation-driven startups
Featured Snippet: Quick Summary of Startup Schemes
Best Government Schemes for Startups in India (2026):
- Startup India Initiative – Tax, compliance, and IPR benefits
- Startup India Seed Fund Scheme – Early-stage grants and debt support
- Fund of Funds for Startups – Growth capital via AIFs
- Credit Guarantee Scheme for Startups – Collateral-free loans
- Mudra Yojana – Micro startup funding
- Stand-Up India – Women and SC/ST entrepreneurs
- Atal Innovation Mission – Incubation and innovation support
Eligibility Criteria for Government Startup Schemes
Most central government schemes require startups to meet the following conditions:
- Incorporated as a Private Limited Company, LLP, or registered Partnership
- Startup age not exceeding 10 years
- Annual turnover not exceeding ₹100 crore
- Working on innovation, improvement, or scalable business models
- DPIIT recognition through the Startup India portal
Common Mistakes Startups Make While Applying
- Applying without DPIIT recognition
- Incomplete or weak documentation and pitch decks
- Confusing grants with loans or equity funding
- Ignoring scheme-specific eligibility criteria
- Assuming government funding is automatic or guaranteed
Check this out as well:
- DPIIT Startup Registration Guide
- State Startup Policies in India
- Startup Tax Exemptions Explained
- Grants vs Venture Capital for Startups
Conclusion
Government schemes for startups in India remain a critical pillar of the country’s entrepreneurial ecosystem in 2026. From early-stage grants to growth capital and credit support, these initiatives reduce risk and improve access to structured funding. Founders should start with DPIIT recognition and strategically select schemes aligned with their startup’s stage and sector.
Next step: Evaluate eligibility, prepare documentation, and apply through official government platforms.
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