India Launches $1.1 Billion Venture Fund for Deep Tech Startups

India has approved a $1.1 billion state-backed venture capital program, aimed at bolstering startups in high-risk sectors such as artificial intelligence and advanced manufacturing. The cabinet approval this week allows for the deployment of the ₹100 billion fund originally outlined in India's January 2025 budget.

• This initiative follows a 2016 venture program which allocated ₹100 billion to 145 private funds, which then invested about ₹255 billion in over 1,370 startups.
• The current program specifically targets deep-tech and manufacturing startups that need larger capital and longer-term investments, also expanding support for early-stage founders across India.
• IT Minister Ashwini Vaishnaw emphasized India's vibrant startup landscape, highlighting a dramatic increase in the number of startups from fewer than 500 in 2016 to over 200,000 today.
• Recent changes to India’s startup rules now extend the classification period for deep-tech firms to 20 years and raise the revenue threshold for startup-specific benefits to ₹3 billion.
• This approval is timely, preceding the India AI Impact Summit, where major global AI companies, including OpenAI and Google, will participate.
• Despite the vitality, India's startup ecosystem saw a reduction in private capital, with funding dropping to $10.5 billion in 2025, a 17% decline from the previous year.