The Modi government is planning to expand the definition of startups to promote innovation in deep-tech in the upcoming Union Budget, according to sources. The expansion will include aspects of artificial intelligence and deep-tech, along with cooperatives.
The broader definition of startups will also allow flexibility for companies to pivot fields. The new definition aims to incentivise more companies to innovate and take risks, sources said.
Finance Minister Nirmala Sitharaman will table the Budget 2026 for the next financial year at 11:00 a.m. on Sunday, Feb. 1 in the Lok Sabha. The government is expected to fast-pedal key reforms to promote economic growth amid headwinds from global trade and geopolitical frictions.
Last week, Commerce and Industry Minister Piyush Goyal said the government has readied draft guidelines for the second Rs 10,000 crore Fund of Funds for Startups, with a clear focus on deeptech segments such as artificial intelligence, quantum technologies, aerospace and defence.
Speaking on the 10th anniversary of the government's Startup India programme, Goyal said the proposed fund of funds is expected to be operationalised within this year. The minister said a dedicated deeptech policy is under active consideration, though it is yet to take its final shape.
Goyal also said the government is exploring the creation of a new pathway for startups under the Export Promotion Mission, aimed at helping young companies access global markets and integrate into international value chains. The move is expected to complement existing export incentives by tailoring support to the unique needs of startups, particularly those operating in high-technology domains.
The commerce minister added that the government remains in continuous dialogue with the Ministry of Finance on a range of suggestions to further boost the startup ecosystem, including easing access to capital, improving regulatory clarity and strengthening.
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