India has approved a $1.1 billion state-backed venture capital program to support startups in sectors like artificial intelligence and advanced manufacturing. The fund, outlined in the 2025 budget, aims to finance deep-tech startups and expand investment beyond major cities. The program follows recent changes to startup rules, easing pressure on deep-tech companies.

The fund is structured as a fund of funds and aims to target deep-tech and manufacturing startups that require longer time horizons and larger capital amounts. The number of startups in India has grown from fewer than 500 in 2016 to over 200,000 today, with more than 49,000 registered in 2025 alone. The government aims to strengthen the domestic venture capital industry, particularly smaller funds.

India’s cabinet approval of the venture capital program comes ahead of the India AI Impact Summit. Global AI companies like OpenAI, Google, and Microsoft are set to participate, highlighting India’s appeal as a tech market. Recent changes to startup rules have extended benefits to deep-tech companies, making India an attractive destination for global tech expansion.

Read more at Yahoo Finance: India doubles down on state-backed venture capital, approving $1.1B fund