The Ministry of Commerce and Industry has announced that a significant portion of the second Rs 10,000 crore Fund of Funds Scheme (FFS) for startups will be channeled into new-age technology, artificial intelligence (AI), and machine building. This move aims to fuel innovation in high-growth sectors, reinforcing India’s position as a global startup hub.

Announced in the 2025 Budget, the new FFS builds on the success of a similar 2016 scheme, which catalyzed venture capital investments. “We are dedicating much of this Rs 10,000 crore to new-age tech, AI, and machine building,” a ministry official stated. The Small Industries Development Bank of India (SIDBI) will manage the scheme, providing capital to SEBI-registered Alternative Investment Funds (AIFs) that invest in startups.

Launched under the Startup India initiative in 2016, the program has recognized over 1.5 lakh startups across 55 industries, offering them tax and non-tax incentives. The 2016 FFS mobilized Rs 91,000 crore in commitments, highlighting its impact. The new fund is expected to further empower entrepreneurs, particularly in deep-tech areas like AI, which is projected to drive India’s innovation ecosystem forward.

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This strategic allocation aligns with the government’s vision to foster self-reliance and global competitiveness, ensuring startups in cutting-edge sectors thrive.

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