Significant investments aimed at bolstering India's startup ecosystem are on the rise, as major players like GAIL (India) Limited ramp up their funding, coupled with supportive government initiatives announced in the recent Union Budget. GAIL has made headlines by significantly increasing its Start-up Investment Fund from Rs 100 crore to Rs 500 crore, aiming to stimulate innovation across diverse sectors.
This notable expansion of GAIL's fund reflects the company's commitment to propelling India’s vision of becoming a self-reliant nation. The enhanced fund will particularly target startups involved in clean energy, renewables, energy storage, electric mobility, and digital transformation, aligning with broader sustainability goals. Sandeep Kumar Gupta, GAIL’s Chairman & Managing Director, expressed enthusiasm over this initiative, stating, "With the increased fund, we aim to provide greater financial and strategic backing to entrepreneurs working on breakthrough ideas." Since its inception, GAIL’s initiative, known as ‘Pankh’, has successfully invested across various fields, including electric mobility and environmental sustainability.
Alongside GAIL's investment boost, the Union Budget 2025 unveiled by Finance Minister Nirmala Sitharaman has also earmarked substantial support for startups and small enterprises. One of the most significant highlights is the establishment of a new Fund of Funds with Rs 10,000 crore dedicated to nurturing startups, particularly focusing on underrepresented entrepreneurs. Sitharaman announced the doubling of credit guarantee cover to Rs 20 crore and reductions on guarantee fees, providing a comprehensive framework for financial backing.
Industry experts have welcomed these measures. Sanjeev Bikhchandani, founder and executive vice-chairman of Info Edge India, praised the announcement, noting, "Great move to allocate to the Fund of Funds for startups another Rs 10,000 crore. The first fund done a few years ago gave a huge fillip to the Indian Venture Capital industry." This sentiment highlights the need for domestic venture capital to enable India’s startup ecosystem to flourish.
The budget also emphasizes empowering women and marginalized groups. A new scheme targets 5 lakh women, SC, and ST first-time entrepreneurs, offering term loans up to Rs 2 crore over the next five years. Manish Chowdhary, co-founder of WOW Skin Science, described this as "a significant move toward fostering inclusive growth and creating more opportunities for underrepresented entrepreneurs." This scheme aims to integrate lessons from the Stand-Up India initiative, promoting entrepreneurial skills within these communities.
Extending the benefits for startups, Sitharaman proposed to continue the tax benefits under Section 80-IAC for qualifying companies, ensuring incentives remain for those formed before April 1, 2030. Archana Jahagirdar, founder and managing partner of Rukam Capital, commented on this initiative’s importance, stating, "When startups are part of the yearly budgetary planning of the central government, it is a cause for celebration." She emphasizes the potential for India to lead globally with its burgeoning number of unicorns and startups, driven by progressive reforms.
On another front, the need for sustainable practices and innovative recycling processes is underscored by the joint venture between Re Sustainability and Aarti Circularity. This partnership will focus on plastic recycling, beginning with an initial investment of approximately Rs 100 crore to establish plastic materials recycling facilities across India.
Masood Mallick, Managing Director & CEO of Re Sustainability, highlighted this collaboration as "a significant milestone" toward sustainable resource management. By focusing on resource recovery from various waste streams, the partnership aims to generate Advanced Circular Materials (ACM), setting new benchmarks for environmental practices. Mirik Gogri, Director at Aarti Circularity Limited, agrees, noting, "This arrangement between ACL and ReSRL is a pathbreaking development... to address pressing environmental challenges."
India has positioned itself at the forefront of innovation, sustainability, and economic growth through these significant investments and initiatives. With forward-thinking policies and partnerships, the future of India’s startup ecosystem looks promising, likely fostering growth and addressing pressing challenges like sustainability and inclusivity. The combined efforts of both the public sector and private enterprises hold the key to revolutionizing how startups operate, create value, and contribute to the economy.