India’s cabinet has given the green light to a state-supported venture capital program worth 100 billion rupees, approximately $1.1 billion, aimed at backing startups in high-risk sectors such as AI and advanced manufacturing, as per a recent TechCrunch report. Initially proposed in the January 2025 budget speech by the finance minister, the initiative was formally approved this week, over a year after its introduction. The program will function as a “fund of funds,” allocating public funds to private investment firms that then support startups.
The program is designed to have a more focused strategy compared to a similar initiative launched in 2016. The previous program also allocated 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-endorsed event expected to attract global technology giants like OpenAI, Anthropic, Google, Meta, Microsoft, and Nvidia, as well as prominent Indian conglomerates like Reliance Industries and Tata Group.
Simultaneously, funding conditions have become stricter. In 2025, Indian startups secured $10.5 billion in funding, marking a decrease of slightly over 17% from the previous year, while the number of funding rounds dropped by nearly 39% to 1,518 transactions, according to Tracxn data.