India approves $1.1 bln fund for deep-tech startups

India’s cabinet has approved a 100 billion rupee, or roughly $1.1 billion, state-backed venture capital programme aimed at supporting startups in high-risk sectors including AI and advanced manufacturing, according to a recent report by TechCrunch.

The initiative, first outlined in the January 2025 budget speech by the finance minister, received formal clearance this week, more than a year after it was proposed. The programme will operate as a “fund of funds”, committing public capital to private investment firms that in turn back startups.

According to the report, the scheme is intended to take a more targeted approach than a similar programme launched in 2016. That earlier effort also committed 100 billion rupees and channelled funds into 145 private investment vehicles, which together invested more than 255 billion rupees in over 1,370 startups, according to government data released on February 14.

The announcement comes ahead of the India AI Impact Summit, a government-backed event expected to draw global technology companies including OpenAI, Anthropic, Google, Meta, Microsoft and Nvidia, alongside major Indian conglomerates such as Reliance Industries and Tata Group. 

At the same time, funding conditions have tightened. Indian startups raised $10.5 billion in 2025, down just over 17 percent from the previous year, while the number of funding rounds fell nearly 39 percent to 1,518 transactions, according to data from Tracxn.