Ahead of the 9th anniversary of the Startup India initiative on January 16, Amardeep Singh Bhatia, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), is scheduled to meet with 75 Alternate Investment Funds (AIFs) this evening. The meeting aims to explore strategies to boost funding for the startup ecosystem, particularly in Tier-2 and Tier-3 cities.

Government officials have highlighted ongoing efforts to enhance capital mobilization and collaborate with major companies to mentor startups. These initiatives include enhancing the MAARG (Mentorship, Advisory, Assistance, Resilience, and Growth) portal, which connects startups with industry mentors across various sectors.

The government is also gathering feedback from startups to identify additional measures to support the ecosystem. Plans are underway to secure more funding for the Seed Fund Scheme and Credit Guarantee Scheme to improve credit access for startups.

Officials noted that removing the angel tax and streamlining processes by the Ministry of Corporate Affairs have encouraged several startups to return to India, with the equity market reflecting the impact of this reverse flipping.

Additionally, the government has approached the top 100 NSE-listed companies to generate momentum for establishing manufacturing incubators.

In 2016, India launched a Rs. 10,000 crore Fund of Funds for Startups (FFS), managed by DPIIT, to boost capital availability and drive private investments. Unlike direct investments, FFS provides funding to SEBI-registered AIFs, or daughter funds, which then invest in promising Indian startups.

The Fund of Funds facilitates downstream investments into venture capital firms and Alternate Investment Funds (AIFs), which subsequently invest in startups. This funding supports startups at various stages of their growth.