The Union Budget 2025 has been met with enthusiasm from India’s startup and deep tech ecosystem, with industry leaders praising the government’s commitment to fostering innovation and entrepreneurship. Key announcements such as the ₹10,000 crore Fund of Funds, the Deep Tech Fund, and tax benefits for startups are expected to accelerate growth, boost domestic capital, and strengthen India’s position in AI, space tech, and electric mobility. Industry veterans weigh in on the budget’s impact, highlighting its role in fueling innovation, job creation, and long-term sustainability in the startup landscape.
Bruce Keith, Co founder CEO, InvestorAi
“While the Budget started with a big bang quite literally, the Honourable Finance Minister has announced a string of boosters for the Indian startup sector. The extensions to the loan programs make sense in the context of micro enterprises. However, the crucial fund of funds of Rs 10,000 crore will play a key role in boosting domestic capital in the startup sector. The announcement on deep tech funds, while details are awaited, should be viewed through the DeepSeek lens of what can be done with relatively small amounts of capital when provided to agile and creative teams. We expect the VC ecosystem to bring velocity and momentum into funding these enterprises.
I was especially delighted to hear about the enhancing the “spirit of curiosity and innovation “ with IIT expansions of capacity and centres of excellence for AI education – talent availability is a necessary part of continuing our growth”.
Sridhar Parthasarathy, Co-Founder & General Partner at Bluehill.VC
“The government’s announcement of another Fund of Funds (FoF) worth ₹10,000 crore in the budget is a strong commitment to cultivate an entrepreneurial ecosystem and an acknowledgement of Alternative Investment Funds (AIFs) in channeling these resources effectively.
While equity funding through AIFs is essential, there is an urgent need for debt financing for startups. The introduction of a credit guarantee will help startups achieve a balanced mix of equity and debt funding, making their growth more sustainable.
Additionally, the plan for a new Deep Tech Fund of Funds is a crucial step towards advancing deep tech innovation in India. This signals a clear intent from the govt to position India strongly in the global AI race, which is a much needed boost for deep tech startups specially in AI and space tech”.
Ankur Mittal, Co-Founder, Inflection Point Ventures
“Our ask was a better credit platform and framework for startups and to that extent this is a welcome step. This will allow them to grow and build sustainable businesses and not be dependent on just equity infusion to grow. Their capacity to attract follow-on growth capital will be further strengthened by the additional cash, which will also help them make important investments in operations, personnel, and technology. This action boosts job creation, accelerates startup growth, and creates long-term value in the ecosystem by resolving financial limitations”.
Mr. Dinesh Arjun, CEO Cofounder, Raptee.HV
“Innovation and technology are the cornerstones of every developed nation, and India’s vision for Viksit Bharat rightly prioritizes these pillars. The Finance Minister’s focus on nurturing and investing in innovation is a commendable step toward accelerating new technologies that will shape our future. The allocation of a Deep Tech Fund will further strengthen India’s industrial ecosystem, fostering a globally competitive, tech-driven economy.
A crucial boost to the EV industry comes with the exemption of Li-Ion batteries and other capital goods, which will significantly reduce battery costs and encourage further investment in domestic battery manufacturing. Given that batteries make up 30-40% of an EV’s cost, this move will make EVs more affordable and accessible to consumers, driving mass adoption across two-wheelers, three-wheelers, and four-wheelers alike. By addressing a fundamental cost barrier, this initiative lays a strong foundation for the future of electric mobility in India. We are confident that these strategic measures will have a lasting positive impact on the EV ecosystem in the months to come.”
Pankit Desai, Co-founder & CEO, Sequretek
“With the unveiling of the Union Budget 2025, significant advancements in artificial intelligence come into focus, particularly with the creation of National Centers of Excellence (COEs) in AI. This shift signals a groundbreaking transition from AI being a mere boardroom discussion to becoming a central budgetary focus, complete with serious financial commitments. By earmarking funds specifically for deep tech, the government is actively fostering an environment ripe for innovation, acknowledging the high-risk nature of such investments, and putting resources right where they’re most needed. This policy shift could elevate India’s skilled tech workforce, facilitated by increased funding and programs such as “Train the Trainers,” ensuring capable instructors for burgeoning student populations. The expansion of broadband access further ensures that students even in remote areas can emerge technologically proficient, broadening the talent pool to Tier 3 and 4 cities and rural India.
The FM also announced a 5-year extension of the startup incorporation period, allowing more startups, including those established before January 2013, to enjoy benefits like extended tax concessions—a vital move as startups often require longer timelines to become profitable. The decriminalization of TDS and TCS further underscores the government’s focus on supporting MSMEs. In addition, easing the tax deduction and collection structures simplifies financial management for startups, alleviating cash flow concerns and enabling companies to operate more smoothly.”
