The Ministry of Commerce and Industry has decided to allocate a significant portion of the newly announced ₹10,000 crore Fund of Funds Scheme (FFS) to support budding entrepreneurs in emerging sectors such as artificial intelligence (AI), new-age technology, and machine building, a senior government official confirmed on Monday.
“We are going to dedicate a lot of this ₹10,000 crore Fund of Funds largely for the new-age tech, AI, and machine building,” the official said, underlining the government’s push to back high-growth and innovation-driven industries.
This new corpus, announced in the Union Budget, is the second edition of the FFS initiative.
The government launched the first ₹10,000 crore scheme in 2016 to catalyze venture capital investments in Indian startups.
Just like the original scheme, the Small Industries Development Bank of India (SIDBI) is expected to manage the new fund.
Under the existing framework, SIDBI provides capital to Securities and Exchange Board of India (SEBI)-registered Alternative Investment Funds (AIFs), which then invest in eligible startups.
By utilizing this indirect investment route, the government aims to maximize outreach and impact across India’s rapidly growing startup ecosystem.
The Fund of Funds initiative forms a key pillar of the larger Startup India program, which the government launched on January 16, 2016, to foster innovation, generate employment, and enhance the ease of doing business for emerging ventures.
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To date, the Department for Promotion of Industry and Internal Trade (DPIIT) has officially recognized over 1.5 lakh startups spanning more than 55 sectors.
These startups enjoy a range of tax and non-tax benefits, including exemptions, rebates, and easier access to government funding and procurement opportunities.
With the fresh infusion of ₹10,000 crore, the government is signaling a clear intent to nurture innovation-led growth and maintain India’s momentum as one of the world’s leading startup hubs.
Officials believe that prioritizing sectors like AI and machine building will not only create high-value jobs but also bolster India’s standing in global technology and manufacturing landscapes.
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