The government has announced a substantial Rs 10,000 crore Fund of Funds for Startups (FFS) in the Budget 2025. This initiative, managed by the Small Industries Development Bank of India (SIDBI), aims to accelerate the growth of Indian startups by encouraging domestic investment and fostering innovation. The infusion of capital is expected to propel startups through the 14th and 15th Finance Commission cycles.
Reports indicate that at least 30 startups successfully raised $248.87 million in funding last week alone, demonstrating the strong fundamentals of the Indian economy and the vibrant nature of its startup ecosystem. The ‘Startup India‘ initiative, launched on January 16, 2016, continues to evolve, marking a decade of growth and providing crucial assistance in transforming India into a global startup hub. The Rs 10,000 crore Fund of Funds is anticipated to provide a substantial boost to startups, encouraging further innovation and solidifying the country’s position on the global startup map.
The IT industry has lauded the recent Budget 2025 for its emphasis on enhancing skill development and boosting the Make-in-India initiative. Leaders from various leading tech companies commended the focus on these areas, highlighting the potential positive impact on industry growth and employment. Puneet Chandok, President of Microsoft India & South Asia, expressed strong support, saying, “The government’s commitment to skilling is crucial in keeping our workforce competitive on a global scale.
This budget recognizes the need for continual learning and development in technology.”
Rajesh Magow, Co-founder & Group CEO of MakeMyTrip, highlighted the Make-in-India focus, noting, “Boosting local manufacturing is essential for long-term economic sustainability. It encourages innovation within our borders and reduces dependency on imports.”
Other leaders echoed similar sentiments, underscoring the potential long-term benefits. The Budget 2025 sets the stage for significant advancements in the tech industry, fostering an environment conducive to innovation and growth.
Funding startups for economic growth
Union Finance Minister Nirmala Sitharaman has allocated ₹20,000 crore to the Department of Science and Technology to promote private sector-driven innovation. This substantial investment aims to drive research, expand AI and geospatial initiatives, and further bolster the Atal Tinkering Labs.
The industry believes that the ₹20,000 crore investment in small modular reactor R&D and incentives for capacity augmentation will create opportunities for energy-intensive industries. Sitharaman also announced that 50,000 Atal Tinkering Labs will be set up in the next five years to cultivate scientific temper in young minds. Shirshendu Mukherjee, Managing Director of Wadhwani Innovation Network, commented on the budget’s significant steps towards fostering innovation.
“The 20,000 crore allocation for private and public sector-driven research, and the expansion of AI and geospatial initiatives, demonstrate the government’s strong commitment to innovation-led growth,” he told PTI. However, industry players feel that the country needs more funding and resources to fully realize its R&D potential. Dushyant Chachra, CFO of SAEL, a renewable and green energy company, welcomed the allocation but stressed the need for a more comprehensive strategy going forward.
The Department of Science and Technology (DST) has seen a massive increase in its budget, with an allocation rising to ₹23,290 crore in 2025-26 from ₹2,819 crore in the previous year. This significant increase will support a wide range of scientific projects including quantum computing, supercomputing, and geospatial infrastructure. The Union Budget 2025-26 has laid a strong foundation for fostering innovation and driving scientific research in India.
However, industry players agree that to truly become a global leader in R&D, India will need sustained efforts, increased funding, and more robust industry-academia collaboration.