Top 10 Government Schemes for Startups in India You Shouldn’t Miss in 2025

The Indian startup ecosystem is booming, cementing its position as the third-largest in the world with over 100 unicorns and counting. This vibrant landscape offers immense opportunities, but for new entrepreneurs, the journey is often filled with challenges like securing funding, navigating complex regulations, and finding the right mentorship. To nurture this spirit of innovation, the Indian government has rolled out several powerful government schemes for startups aimed at providing a robust support system. This comprehensive guide will walk you through the top government initiatives for startups, detailing the best startup schemes in India 2025. By understanding these programs, you can leverage the available government support for Indian startups to transform your business idea into a successful venture.

What is a “Startup” in the Eyes of the Government?

Before you can apply for these beneficial schemes, your business must first be recognized as an official “startup” by the government. This recognition is granted by the Department for Promotion of Industry and Internal Trade (DPIIT), and it’s the gateway to unlocking numerous tax benefits, funding opportunities, and simplified compliance. Understanding these criteria is the crucial first step for any entrepreneur looking to take advantage of government support. Without this official stamp, you may be ineligible for some of the most impactful schemes designed specifically for new and innovative businesses.

Key DPIIT Recognition Criteria

To be recognized as a startup by the DPIIT, your business must meet the following conditions:

• Age of Company: The entity must be less than 10 years old from its date of incorporation or registration.
• Type of Entity: It must be registered as a Private Limited Company, a Partnership Firm, or a Limited Liability Partnership (LLP).
• Annual Turnover: The company’s turnover should not have exceeded ₹100 crore in any of the financial years since its incorporation.
• Original Entity: The business must be original and not formed by splitting up or reconstructing an already existing business.
• Innovation & Scalability: The core of the business must be focused on innovation, development, or improvement of products, processes, or services. It should also have a high potential for creating employment or wealth.

Actionable Tip: Getting your business registered and recognized is the first step. You can start the process on the official Startup India portal. For expert guidance on registration and DPIIT recognition, consider using a professional service like the TaxRobo Company Registration Service.

Top 10 Government Schemes for Startups India in 2025

Here are the 10 most impactful government schemes for startups designed to offer everything from seed funding and collateral-free loans to tax exemptions and mentorship.

1. Startup India Seed Fund Scheme (SISFS)

The Startup India Seed Fund Scheme (SISFS) is a critical initiative designed to provide early-stage financial assistance for startups in India. It specifically targets entrepreneurs at the most vulnerable stages of their journey, such as proof of concept, prototype development, product trials, and initial market entry. This scheme bridges the gap for startups that have a promising idea but lack the initial capital to validate and develop it. Funding is disbursed not by the government directly, but through a network of approved incubators, ensuring that the startups also receive valuable mentorship and guidance.

• Key Benefits:
  • A grant of up to ₹20 Lakhs for the validation of Proof of Concept (PoC) or prototype development.
  • An investment of up to ₹50 Lakhs through convertible debentures or debt-linked instruments for market entry and commercialization.
  • Access to a network of experienced incubators for mentorship and support.
• Eligibility: The applicant must be a DPIIT-recognized startup that was incorporated no more than two years ago at the time of application.
• How to Apply: Entrepreneurs can apply online through the official Startup India SISFS Portal. The applications are then forwarded to an eligible incubator for a thorough evaluation and selection process.

2. Stand-Up India Scheme

Launched to foster entrepreneurship at the grassroots level, the Stand-Up India Scheme aims to empower women and individuals from Scheduled Castes (SC) and Scheduled Tribes (ST) communities. The scheme facilitates bank loans for setting up a new enterprise in the manufacturing, services, or trading sector. By ensuring that at least one SC/ST borrower and one woman borrower are funded by every bank branch, the government is actively promoting economic inclusion and creating a more diverse entrepreneurial landscape. This initiative is pivotal in turning job seekers from these communities into job creators.

• Key Benefits:
  • Provides bank loans ranging from ₹10 lakh to ₹1 crore.
  • The loan covers up to 75% of the total project cost. The remaining 25% may be funded through other eligible central or state schemes.
  • A RuPay debit card is provided for the convenient withdrawal of working capital.
• Eligibility: The enterprise must be a greenfield project (i.e., the first-time venture of the beneficiary). The controlling stake of at least 51% must be held by an entrepreneur who is either a woman or belongs to the SC/ST community.
• How to Apply: You can apply directly at any commercial bank branch, through the Stand-Up India Portal, or via the Lead District Manager (LDM) of your district.

3. Pradhan Mantri MUDRA Yojana (PMMY)

The Pradhan Mantri MUDRA Yojana (PMMY) is one of the most accessible government schemes for startups and small businesses. It focuses on providing financial support to non-corporate, non-farm small and micro-enterprises, which often struggle to access credit from traditional banking institutions. The scheme offers loans without the need for collateral, making it incredibly popular among small-scale entrepreneurs, shopkeepers, and service providers. The loans are categorized into three tiers based on the funding requirement and the stage of the business, ensuring tailored support for everyone.

• Key Benefits:
  • Shishu: Provides loans up to ₹50,000, ideal for businesses that are just starting out.
  • Kishor: Offers loans from ₹50,001 to ₹5 lakh for businesses looking to expand their operations.
  • Tarun: Sanctions loans from ₹5,00,001 to ₹10 lakh for established businesses that require further investment.
  • No collateral or security is required from the borrower.
• Eligibility: Any Indian citizen who has a viable business plan for a non-farm sector income-generating activity such as manufacturing, processing, trading, or the service sector can apply.
• How to Apply: Approach any MUDRA-affiliated lending institution, which includes Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks, and Micro Finance Institutions (MFIs), or apply through the Udyamimitra Portal for MUDRA loans.

4. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

One of the biggest hurdles for first-generation entrepreneurs is the lack of collateral to secure a business loan. The CGTMSE scheme directly addresses this problem by providing a credit guarantee to financial institutions that lend to Micro and Small Enterprises (MSEs). This is a vital form of government support for Indian startups, as it encourages banks and NBFCs to lend to new businesses without demanding third-party guarantees or collateral. By covering the risk for the lender, the scheme significantly improves the flow of credit to the MSE sector, which is the backbone of the Indian economy.

• Key Benefits:
  • Facilitates collateral-free loans of up to ₹2 crore (recently enhanced limit for certain categories).
  • The trust fund provides a guarantee cover of up to 85% for the loan amount, reducing the risk for the lending institution.
  • It encourages banks to focus on the viability of the business project rather than the availability of collateral.
• Eligibility: Both new and existing Micro and Small Enterprises engaged in manufacturing or service activities are eligible. Retail trade is typically excluded.
• How to Apply: Entrepreneurs need to prepare a detailed business plan and approach an eligible lending institution (banks/NBFCs). The lender, upon sanctioning the loan, will apply to the CGTMSE for the guarantee cover.

5. Tax Exemption under Section 80-IAC (Startup India Initiative)

Early-stage startups need to reinvest as much of their earnings as possible to fuel growth. Recognizing this, the government offers a powerful tax incentive under Section 80-IAC of the Income Tax Act. Eligible startups can claim a 100% tax deduction on their profits and gains for three consecutive years. This tax holiday provides significant financial relief during the critical initial years, allowing founders to channel funds back into product development, marketing, and team expansion instead of tax payments. It is one of the most direct forms of financial support offered under the Startup India initiative, and it aligns with broader Top Tax Planning Strategies for Startups and SMEs that aim to maximize capital for growth.

• Key Benefits:
  • 100% tax deduction on profits for any 3 consecutive assessment years.
  • This benefit can be availed within the first 10 years from the date of the startup’s incorporation.
• Eligibility: The startup must be a DPIIT-recognized entity (a Private Limited Company or an LLP) incorporated after April 1, 2016. Crucially, it must also hold a certificate of eligibility from the Inter-Ministerial Board (IMB) to be considered an innovative business.
• How to Apply: After obtaining DPIIT recognition, the startup must apply for the tax exemption certificate on the Startup India portal. Once the certificate is granted, the deduction can be claimed while filing the Income Tax Return. For details, read our blog on How to Claim Tax Benefits for Your Startup.

6. Support for International Patent Protection in Electronics & IT (SIP-EIT)

In today’s global market, protecting Intellectual Property (IP) is paramount for technology startups. The SIP-EIT scheme is designed to provide financial support to MSMEs and tech startups for filing international patents. The high cost of filing patents in foreign countries can be a major deterrent for new businesses. This scheme helps startups protect their inventions globally, giving them a competitive edge and encouraging them to innovate without the fear of their ideas being copied. This support is crucial for startups aiming to expand into international markets.

• Key Benefits:
  • Provides a reimbursement of up to ₹15 lakhs per invention or 50% of the total expenses incurred, whichever is less.
  • This support helps Indian startups build a global IP portfolio, which can be a valuable asset for attracting investment and partnerships.
• Eligibility: The applicant must be registered under the MSME Development Act or as a Company/LLP. The application must be filed before securing the grant of the foreign patent.
• How to Apply: An application with the required documents must be submitted to the Department of Electronics and Information Technology (DeitY). Need help with IP? Check out TaxRobo’s Intellectual Property Service.

7. Atal Innovation Mission (AIM)

The Atal Innovation Mission (AIM) is a flagship government initiative managed by NITI Aayog to foster a culture of innovation and entrepreneurship across the country. Instead of being a single direct funding scheme, AIM builds an entire ecosystem of support. It establishes Atal Incubation Centers (AICs) at universities and institutions to nurture innovative startups with mentorship, infrastructure, and seed funding. It also runs challenges like the Atal New India Challenge (ANIC), which invites innovators to solve sectoral problems with their technologies and provides grant-based funding to develop their solutions.

• Key Benefits:
  • Access to a nationwide network of world-class Atal Incubation Centers (AICs) and Atal Tinkering Labs (ATLs).
  • Opportunities for mentorship from industry experts and academic leaders.
  • Funding through programs like the Atal New India Challenge (ANIC), which offers grants of up to ₹1 crore.
• Eligibility: Eligibility criteria vary depending on the specific program or challenge. AIM is generally open to startups, innovators, researchers, and even students.
• How to Apply: Keep an eye on the official AIM website for announcements of new challenges and programs. Applications are typically submitted online through their portal.

8. SAMRIDH Scheme

The SAMRIDH (Startup Accelerators of MeitY for pRoduct Innovation, Development and gRowth) Scheme was launched by the Ministry of Electronics and Information Technology (MeitY) to create a conducive platform for Indian software product startups to scale. The program focuses on supporting existing and upcoming accelerators to select and accelerate promising tech startups. It provides the crucial funding and mentorship needed to take a product from the prototype stage to a market-ready solution, helping startups secure further investment and scale their operations.

• Key Benefits:
  • Provides funding of up to ₹40 lakh to an eligible startup through the accelerator.
  • Offers intensive mentorship for 6 months and connects startups with potential customers and investors.
• Eligibility: Startups must be at the ideation, prototype, or MVP stage and should have been selected by one of the accelerators empanelled under the SAMRIDH scheme.
• How to Apply: Startups do not apply directly to the government. Instead, they need to apply to and get accepted by one of the partner accelerators running a cohort under the SAMRIDH program.

9. Scheme for Fund of Funds for Startups (FFS)

The Fund of Funds for Startups (FFS) is a mega-fund established by the government that doesn’t invest directly in startups but acts as an anchor investor for Venture Capital (VC) funds. The government commits capital to SEBI-registered Alternative Investment Funds (AIFs), which then invest this money into high-growth Indian startups. This indirect funding model leverages the expertise of professional fund managers to identify and nurture promising companies. It has significantly boosted the availability of risk capital in the Indian startup ecosystem, making it one of the most impactful best startup schemes in India 2025.

• Key Benefits:
  • Has a corpus of ₹10,000 crore to be invested in AIFs, creating a multiplier effect on the capital available for startups.
  • Helps startups get funding from professional and experienced VC funds, which also bring in valuable mentorship and market access.
• Eligibility: A startup must be DPIIT-recognized to be eligible for investment from an AIF that is supported by the Fund of Funds. The final investment decision rests with the AIF’s fund managers.
• How to Apply: Startups do not apply to the FFS directly. The route is to prepare a strong pitch and approach the AIFs (VC funds) that have received capital from the Fund of Funds.

10. Biotechnology Industry Research Assistance Council (BIRAC) Schemes

For startups in the specialized field of biotechnology, BIRAC is the nodal agency. It runs several schemes, with the Biotechnology Ignition Grant (BIG) being its most popular. The BIG scheme is for individual entrepreneurs, scientists, and early-stage startups to validate and develop their innovative ideas into a proof-of-concept. It provides grant-in-aid to support high-risk discovery and research, which is often difficult to fund through traditional means. BIRAC provides a complete ecosystem of funding, mentorship, and incubation for biotech innovators.

• Key Benefits:
  • Offers grant-in-aid of up to ₹50 lakh to innovators for research projects at the idea-to-proof-of-concept stage.
  • Provides access to a network of bio-incubators and expert mentors.
• Eligibility: The applicant can be an individual entrepreneur, a scientist, a researcher, or a startup. The proposal must be innovative and have commercialization potential in the biotech sector.
• How to Apply: BIRAC announces a call for proposals for the BIG scheme twice a year. Applicants need to submit their detailed proposal through the official BIRAC website.

How to Choose the Right Government Scheme for Your Startup

With so many options available, choosing the right scheme can feel daunting. Here’s a simple framework to help you decide:

• Assess Your Business Stage: Are you just starting with an idea? Schemes like the Startup India Seed Fund Scheme (SISFS) or BIRAC’s BIG are perfect. If you are already operational and looking to scale, consider CGTMSE for loans or approaching AIFs backed by the Fund of Funds.
• Identify Your Core Need: Is your primary need financial assistance for startups in India? MUDRA and Stand-Up India offer accessible loans, which are just one aspect of securing a Bank Loan for Startup Business. If you are more concerned about profitability in the initial years, the 80-IAC tax exemption is your best bet. For mentorship and ecosystem support, look towards the Atal Innovation Mission (AIM).
• Check Sector-Specific Schemes: If your startup operates in a niche sector, look for specialized support. BIRAC is the go-to for biotech, while SIP-EIT is designed for electronics and IT startups focused on innovation and patenting.
• Read the Fine Print: This is crucial. Every scheme has detailed eligibility criteria, application timelines, and compliance requirements. Always read the official guidelines thoroughly before investing your time and effort in an application.

Conclusion: Power Your Startup Journey with Government Support

India’s entrepreneurial landscape is more vibrant and supportive than ever before. The diverse range of government schemes for startups discussed in this guide provides a powerful launchpad for ambitious founders. From securing initial seed funding and collateral-free loans to enjoying tax holidays and protecting your intellectual property, these programs are designed to de-risk your venture and fuel your growth. By strategically leveraging these top government initiatives for startups, you can overcome common hurdles and accelerate your path to success. Don’t let the complexities of applications and compliance hold you back from these incredible opportunities.

Navigating the paperwork and ensuring you meet all the criteria can be overwhelming. The experts at TaxRobo are here to help you with every step, from company registration and DPIIT recognition to identifying the perfect government support for your Indian startup. Contact us today and let’s build your success story together!

Frequently Asked Questions (FAQs)

1. What is the main difference between Startup India and Stand-Up India?

Startup India is a broad, flagship initiative aimed at building a strong and inclusive ecosystem for all types of innovative startups across all sectors in India; you can explore this further in our guide to the Startup India Scheme. Stand-Up India, on the other hand, is a specific scheme focused on a social objective: providing bank loans to enterprises established by women and entrepreneurs from Scheduled Castes (SC) and Scheduled Tribes (ST) communities.

2. Can a salaried individual with a startup idea apply for these schemes?

Yes, absolutely. Many schemes are designed to support ideas even before a company is formally incorporated. For instance, you can apply for the Startup India Seed Fund Scheme (SISFS) or BIRAC’s BIG grant through a partner incubator with just a strong idea. However, to avail most loan-based schemes like MUDRA or CGTMSE, you will need to have a registered business entity, such as a Private Limited Company or an LLP.

3. Do I need to be a DPIIT-recognized startup to avail all benefits?

No, not for all schemes. General business loan schemes like Pradhan Mantri MUDRA Yojana (PMMY) and Stand-Up India do not require DPIIT recognition. However, for specific and powerful benefits like the tax exemption under Section 80-IAC, funding from the Fund of Funds, and easier public procurement norms, being a DPIIT-recognized startup is mandatory.

4. Are these government schemes only for tech startups?

Not at all. While there is a strong emphasis on innovation, which is often associated with technology, many key schemes are sector-agnostic. The MUDRA Yojana, Stand-Up India, and the CGTMSE scheme are open to businesses in manufacturing, trading, services, and agri-allied activities. The key is to have a viable business model.

5. How can TaxRobo help me with these schemes?

TaxRobo can provide the foundational support you need to become eligible for and successfully apply to many of these schemes. Our services include hassle-free Private Limited/LLP registration, assistance in obtaining the crucial DPIIT recognition, ensuring your business remains compliant with all tax and ROC filings, and advising on the financial documentation and business plans required for loan applications. We handle the compliance so you can focus on building your business.