Finance Minister Nirmala Sitharaman presented the Union Budget 2025 which includes important steps to support India’s MSME sector and startup ecosystem. The government has launched a number of financial programs, credit facilitation initiatives, and incentives that aim to promote innovation, entrepreneurship, and job creation in the nation in recognition of their significance as important engines of economic growth.
Enhancing Startup Development with a ₹10,000 Crore Fund of Funds
The additional ₹10,000 crore Fund of Funds for entrepreneurs is one of the budget’s most notable announcements. By addressing the enduring problem of financial availability, this action seeks to empower both new and established companies to expand their operations and spur innovation.
Mr. Roshan Aslam, Co-founder & CEO of GoSats, views this as a pivotal move for the startup landscape, stating, “The Union Budget 2025 outlines a clearly defined future for India’s growing startup ecosystem by extending critical policies. The announcement of an additional ₹10,000 crore Fund of Funds will be a critical boost for the growth of India’s startup ecosystem in FY 25-26. As the investment limit for MSME classifications are made 2.5 times and the turnover limits doubled, this will help the financial viability of startup businesses in the country. As easier credit lines are extended to MSMEs, it will provide the essential confidence to grow and generate employment opportunities, directly contributing towards the growth of the Indian economy.”
This infusion of funds will play a crucial role in encouraging risk-taking, technological advancements, and sustainable business models, helping Indian startups make a mark on the global stage.
Diversity and Financial Inclusivity in Entrepreneurship
The budget’s emphasis on advancing equality and diversity in the entrepreneurial ecosystem is another admirable feature. More fair prospects in the industry are anticipated as a result of a new program designed to assist SC and ST business owners and first-time female entrepreneurs.
Mr. Ravi Mittal, Founder and CEO of QuackQuack, welcomed this initiative, stating, “The Union Budget 2025-2026 takes a strong step toward strengthening India’s startup ecosystem with the additional ₹10,000 crore Fund of Funds. Access to capital remains one of the biggest obstacles for emerging businesses, and this fresh infusion of funds will provide critical support for startups to innovate, expand, and create jobs. Additionally, the new scheme for first-time women, SC, and ST entrepreneurs is a commendable move toward fostering inclusivity and diversity in the entrepreneurial landscape. At QuackQuack, we understand the challenges of building something from the ground up, and we believe such initiatives will empower more founders to take bold steps toward their dreams.”
By ensuring financial assistance to underrepresented groups, the government is promoting a level playing field and encouraging a broader range of entrepreneurs to contribute to the economy.
Increased Credit Access and Investment Limits Give MSMEs a Big Push
This budget has significantly increased the MSME sector, which is sometimes considered to be the foundation of India’s economy. Businesses can now more easily qualify as MSMEs and receive related benefits thanks to the 2.5-fold rise in investment classification limitations and the doubling of turnover standards.
Mr. Jigar Kirtibhai Patel, Managing Director of G3+ Fashion, emphasized the impact of these measures, stating, “The Union Budget 2025’s forward-looking perspective to support Indian MSMEs is a commendable initiative as these businesses account for over 45% of the country’s total exports. The budget positions Indian MSMEs with enhanced scalability prospects, technological upgradation, capital accessibility, investment, and turnover growth—contributing towards their long-term success. As MSMEs grow, they will also provide millions of new employment opportunities for Indian youth, directly impacting India’s per capita GDP going forward, helping to meet the country’s target to become a developed nation by 2047.”
With easier access to credit, these enterprises can now focus on expansion, digital transformation, and innovation, which in turn will generate employment and strengthen India’s economic foundation.
Electronics Sector Gets a Major Boost
Apart from startups and MSMEs, the budget has also introduced incentives for the electronics industry. The reduction of customs duty on open cells and other critical electronic components to 5% is expected to encourage local manufacturing and make electronic products more affordable.
Mr. Prashant Bora, MD & CEO of OTEK (A Bora Multicorp Venture), highlighted the significance of these measures, saying, “The FM’s proposal to reduce the customs duty on open cells and other critical electronics components to 5% will help boost the Make in India initiative. This will help electronics brands to support customers with more cost-effective pricing, leading to enhanced scalability and growth. Furthermore, the budget’s emphasis on positioning India’s aspirations to become a global electronics hub through the production-linked incentive (PLI) schemes for electronics and IT hardware manufacturing, further boosted by PM Narendra Modi’s target of $500 billion by FY30, coupled with the government’s bid to strengthen India’s startup ecosystem with an additional INR 10,000 crore Fund of Funds will be a catalyst for growth going forward.”
The government’s commitment to supporting India’s MSMEs and startups through improved funding, easier access to finance, and sector-specific incentives is reaffirmed in the Union Budget 2025. A more robust and globally competitive business ecosystem is made possible by these policies, which promote innovation, inclusivity, and economic growth. India is getting closer to its goal of being a $5 trillion economy and a global leader in innovation and entrepreneurship as companies use these policies to expand.
