India Unveils Expanded Fund of Funds to Boost Startup Ecosystem

Finance Minister Nirmala Sitharaman announced a new Rs 10,000 crore Fund of Funds for Indian startups, expanding the existing scheme. This initiative aims to offer investment through Alternate Investment Funds, supporting India's thriving startup ecosystem, and exploring Deep Tech inclusions to catalyze future growth.

In a significant move to bolster India's startup landscape, Finance Minister Nirmala Sitharaman today unveiled an additional Rs 10,000 crore Fund of Funds. The current Alternate Investment Funds for startups have garnered commitments exceeding Rs 91,000 crore, according to Sitharaman's Budget announcement.

The government's new contribution seeks to broaden the existing Rs 10,000 crore Fund of Funds, a pivotal scheme established in 2016. It has transformed the Indian startup ecosystem by injecting domestic capital into the sector through SEBI-registered Alternative Investment Funds, rather than direct investments.

Further amplifying the initiative, a potential Deep Tech Fund of Funds is under consideration to drive next-gen startups. Complementing this, an extension to Section 80-IAC allows eligible startups to avail benefits until April 2030, as the government also abolishes the contentious angel tax, fostering a more inviting climate for investors.