Seamless access to Capital: Access to essential capital is crucial for startups, especially those that are evolving into the growing phase. Whereas, the initiatives such as Startup India and Funds of Funds have supporting the early-stage startups, there is a rising demand for certain mechanisms that facilitate access to growth capital. Government measures such as tax incentives for venture capitalists, foreign direct investment norms, and robust fund allocation to startup-based funds could be key instrumental in powering up the next generation of innovation. Furthermore, startups are projecting the launch of credit guarantee schemes that can provide a safety shield for startups, particularly those in high-risk or falling stages.

Anand Jain, Co-Founder and Chief Product Officer, CleverTap says, “Clear regulations for digital assets and SaaS platforms can foster innovation and attract global investments. We need an environment that encourages competition and makes India a leader in these high-growth areas,” he said. Jain further noted the potential of AI-driven solutions to transform governance, healthcare, and education, adding that initiatives like INDIAai and ‘Make AI in India’ are already laying the groundwork.

Support for startups and MSMEs is another vital area of focus. Many believe that simplifying tax policies and offering funding incentives could give startups the resources they need to thrive. Jain suggested that extending the ESOP tax deferment policy to all DPIIT-recognised startups could help retain top talent. “This would be a game-changer for startups looking to scale while staying competitive globally”.

Sujit Jagirdar - Interim CEO, T - Hub says "As we look ahead to 2025, India’s potential to lead global innovation is evident, particularly in deep-tech sectors like AI, blockchain, and IoT. Unlocking the true potential of these technologies requires a strong commitment to fostering entrepreneurship at every stage, from ideation to commercialization. A greater focus on access to capital, mentorship, and strategic partnerships will be essential in scaling successful innovations and enabling their global expansion.

Given the long gestation periods for semiconductor and hardware startups, it is important that the upcoming budget announces special incentives beyond what is currently available. Tailored funding mechanisms, tax benefits, and supportive policies can significantly drive growth in these capital-intensive sectors. This, coupled with skill development programs tailored to emerging technologies, will be crucial in building a robust talent pipeline for these industries.

At T-Hub, we are dedicated to nurturing groundbreaking entrepreneurs and supporting the deep-tech ecosystem in reaching its global potential. These steps will not only strengthen India’s innovation framework but also solidify our position as a leading force in technological advancement."

Empowerment for Emerging Technologies: Over the decade, AI has become a buzzword. In that case, the Indian government should prioritize allotting funds for emerging technologies for the country’s innovation and digital economy. Indian startups and VCs are looking forward to advanced tech infrastructure driven by engineering and scientific technologies. Increasing the investment in deep tech startups through dedicated tax policies can help India to position itself as a global leader in ground-breaking technologies such as AI, block chain, and robotics. Also, experts suggest revised GST rates on agri-tech solutions such as AI-based farm monitoring systems, precision agriculture, and smart irrigation tools. Recently, leading IT sector body Nasscom has urged the Indian government to include the central deep tech fund and create measures to secure harbor rules and ESOP taxation.

Bharat Chadha, Partner, Tech Consulting, Uniqus Consultech states, “The Union Budget 2025 is poised to accelerate India's position as a global AI leader. Expect significant investments in AI research, focusing on indigenous large language models and AI chip development. Comprehensive AI skilling initiatives targeting urban and tier-2/3 cities will prepare a future-ready workforce. Policies under "AI for Bharat" will likely prioritize healthcare, agriculture, and education, addressing India's unique challenges. The recently approved national AI mission, 'INDIAai,' aims to foster AI innovation and collaboration across academia, industry, and government. With evolving regulatory frameworks ensuring ethical AI use, tax incentives for AI hardware manufacturing and funding for AI startups will bolster the "Make in India" vision, propelling economic growth through technology-driven solutions.”

Marking a transformative step towards inculcating entrepreneurship and innovation, the Union Budget 2025 is poised to fulfill the expectations of startups vitally. Key expectations and demands are likely to be addressed by creating a conducive environment for startups to evolve and flourish. Completely, the Union Budget 2025 is projected to catalyze immense growth and innovation for India and empower the country as a global arena for startups.