The Union Budget 2025-26 has introduced bold reforms aimed at accelerating India’s startup ecosystem, deep tech investments, and digital transformation. With funding boosts, tax reliefs, and policy reforms, the budget provides much-needed support to entrepreneurs, researchers, and gig workers.
Union Budget 2025-26: What in store for Startups and MSMEs
Here are the Top 10 Takeaways for Startups & the Tech Sector from Budget 2025:
₹10,000 Crore Fund of Funds for Startups
To fuel the growth of early-stage startups, the government has announced a ₹10,000 crore Fund of Funds (FFS). This will enhance venture capital availability and encourage alternative investment funds (AIFs) to invest in Indian startups.
Deep Tech Fund of Funds in the Pipeline
Recognizing the high capital requirements & long development cycles of deep tech startups, the government will explore a Deep Tech Fund of Funds.
Why It Matters? India lags in deep tech investments, and this fund aims to change that by making early-stage capital more accessible for AI, robotics, quantum computing, and biotech startups.
₹500 Crore for AI Centres of Excellence
To push AI-driven innovation, the budget has allocated ₹500 crore to three AI Centres of Excellence for education and research.
What’s in it for India? Strengthening AI R&D capabilities, improving skilled workforce availability, and boosting India’s global AI footprint.
Startup Incorporation Period Extended
Startups will now have five more years to register and qualify for government benefits under the DPIIT Startup Recognition Scheme.
More startups can access tax exemptions, funding schemes, and business-friendly regulations, giving them a longer runway to grow.
₹2 Crore Loans for First-Time Women Entrepreneurs
A new scheme for women entrepreneurs will provide ₹2 crore term loans to five lakh first-time businesswomen over the next five years.
10,000 Research Fellowships for IITs & IISc
To promote deep research & innovation, 10,000 fellowships will be granted under the Prime Minister’s Research Fellowship Program (PMRF) at IITs & IISc.
Section 80-IAC Tax Benefits Extended for Startups
Startups will continue to get tax benefits under Section 80-IAC for another 5 years (until April 1, 2030).
Lower tax burden → Higher reinvestment in business → Faster growth.
Increased Loan Limits for Startups
The loan limit for startups has been increased from ₹10 crore to ₹20 crore, specifically in 27 key sectors crucial to Atmanirbhar Bharat.
Tax Certainty for Electronics Manufacturing
A simplified tax structure & safe harbour rules will be introduced for non-residents providing services to India’s electronics manufacturing industry,eEncouraging foreign investments & strengthening India’s position in global electronics manufacturing.
Major Push to the Gig Economy
One crore gig workers will now get official ID cards and healthcare benefits under the PM Jan Arogya Yojana. Registrations will be done via the e-Shram portal resulting in formalizing the gig workforce & ensuring financial and social security for freelancers & platform workers.
Final Thoughts: India’s Startup Boom is Here!
With higher funding, tax reliefs, easier access to capital, and digital infrastructure expansion, the Budget 2025-26 sets the stage for a thriving innovation ecosystem.
What do you think about these budget announcements? Will they help startups grow?
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