So, the first full budget of Modi 3.0 was presented by India’s FM Nirmala Sitharaman in February 2025. And while many individuals are celebrating the announcement that there’d be no income tax payable for incomes up to 1.2 million rupees, what did the speech mean for startups and businesses in India? Did the speech spark joy, as Marie Kondo would have desired?
Here’s what industry experts had to say:
On FoF (Fund of Funds) & DeepTech
Bruce Keith, Co-Founder & CEO – InvestorAi: “The crucial FoF (Fund of Funds) of ₹10,000 crores will play a key role in boosting domestic capital in the startup sector. While more details are expected with regard to the DeepTech fund announcement, this should be viewed through the DeepSeek lens of what can be done with relatively small amounts of capital when provided to agile and creative teams. We expect the VC ecosystem to bring velocity and momentum into funding these enterprises.”
Sridhar Parthasarathy, Co-Founder & General Partner – Bluehill Capital: “The FoF announcement is a strong commitment to cultivate an entrepreneurial ecosystem and an acknowledgement of AIFs (Alternative Investment Funds) in channeling these resources effectively. The plan for a new DeepTech FoF is a crucial step towards advancing DeepTech innovation in India. This signals a clear intent from the government to position India strongly in the global AI race, which is a much needed boost for DeepTech startups, especially in AI and SpaceTech.”
Bhaskar Majumdar, Managing Partner – Unicorn India Ventures: “Given that DeepTech is being seen as an area for growth at the national level, especially within the broader context of the China +1 strategy and the Government’s introduction of the PLI/DLI schemes of the government, this is a great step. This shows that the GoI realizes that future innovation is the heart of economic growth as global wars are fought around AI and semiconductors.”
Anirudh A Damani, Managing Partner – Artha Venture Fund: “The announcement of a ₹20,000 crore investment to drive private sector-led research, development and innovation is a game-changer for India’s DeepTech ecosystem. Given the capital-intensive and long-gestation nature of DeepTech ventures, we hope this allows experienced DeepTech-focused fund managers to deploy capital effectively.”
Dinesh Arjun, Co-Founder & CEO – Raptee.HV: “Innovation and technology are the cornerstones of every developed nation and India’s vision for a Viksit Bharat rightly prioritizes these pillars. The Finance Minister’s focus on nurturing and investing in innovation is a commendable step toward accelerating new technologies that will shape our future. The allocation of a DeepTech Fund will further strengthen India’s industrial ecosystem, fostering a globally competitive and tech-driven economy.”
Pankit Desai, Co-Founder & CEO – Sequretek: “By earmarking funds specifically for DeepTech, the government is actively fostering an environment ripe for innovation, acknowledging the high-risk nature of such investments and putting resources right where they’re most needed.”
On AI & CoEs (Centres of Excellence)
Keith: “I was especially delighted to hear about the enhancing the ‘spirit of curiosity and innovation’ with IIT expansions of capacity and CoEs for AI education. Talent availability is a necessary part of continuing our growth.”
Mayuresh Raut, Managing Partner – Seafund: “The 3 CoEs and the Dhan Dhanya Krishi Scheme will bring the best of AI practices to the AgriTech startup ecosystem and breed further innovation. Our view is that this requires large patient capital, but aligns us with the renaissance of nuclear energy and renewed interest in this space that’s happening all over the world, led by the US. This definitely opens the sector to private investors. The push for data centres consuming a lot of energy will need nuclear power, which will further fuel our AI aspirations.”
Pankit Desai, Co-Founder & CEO – Sequretek: “This signals a groundbreaking transition from AI being a mere boardroom discussion to becoming a central budgetary focus, complete with serious financial commitments.”
Ritesh Khandelwal, Co-Founder – ZYOD: “The push for skill development through the National CoEs and global collaboration will empower our youth with the capabilities to compete and succeed on the world stage.”
On Access To funding & Credit For Startups In India
Raut: “The increase in credit guarantee for startups from ₹10 crores to ₹20 crore is a much needed demand that has been finally accepted. This will not only enable startups to have access to debt capital, but it will, also, help them scale faster with less equity dilution. Hence, it will lead to a virtuous cycle of increased revenue, less equity dilution, higher valuations and improved fundraising. As the budget commenced, the FM highlighted that they would like to see a 70% increase in women’s participation in economy building and so, the improvements to the credit guarantee scheme will ensure a timely boost as more women entrepreneurs are needed to strengthen our ecosystem.”
Parthasarathy: “While equity funding through AIFs is essential, there is an urgent need for debt financing for startups. The introduction of a credit guarantee will help startups achieve a balanced mix of equity and debt funding, making their growth more sustainable.”
Mittal: “Our ask was a better credit platform and framework for startups and to that extent, this is a welcome step. This will allow them to grow and build sustainable businesses and not be dependent on just equity infusion to grow. Their capacity to attract follow-on growth capital will be further strengthened by the additional cash, which will also help them make important investments in operations, personnel and technology. This action boosts job creation, accelerates startup growth and creates long-term value in the ecosystem by resolving financial limitations.”
Khandelwal: “This Budget brings a much-needed boost to MSMEs, making it easier for small businesses to access credit and scale up. Expanding the credit guarantee cover for MSMEs, increasing investment and turnover limits, while introducing customized credit cards for micro-enterprises will provide vital financial support. Coupled with other positive developments like the National Manufacturing Mission, these developments will accelerate growth, foster innovation and generate employment.”
Other Noteworthy Reactions:
Desai: “The FM also announced a 5-year extension of the startup incorporation period, allowing more startups, including those established before January 2013, to enjoy benefits like extended tax concessions. This is a vital move, as startups often require longer timelines to become profitable. The decriminalization of TDS and TCS, further, underscores the Government’s focus on supporting MSMEs. Additionally, easing tax deduction and collection structures simplify financial management for startups, alleviating cash flow concerns and enabling companies to operate more smoothly.”
Arjun: “A crucial boost to the EV industry comes with the exemption of Li-ion batteries and other capital goods, which will significantly reduce battery costs and encourage further investment in domestic battery manufacturing. Given that batteries make up 30% to 40% of an EV’s cost, this move will make EVs more affordable and accessible to consumers, driving mass adoption across two-wheelers, three-wheelers and four-wheelers alike. By addressing a fundamental cost barrier, this initiative lays a strong foundation for the future of electric mobility in India. We are confident that these strategic measures will have a lasting positive impact on the EV ecosystem in the months to come.”
Ankit Jaipuria, Co-Founder – ZYOD: “This year’s Budget takes meaningful steps toward strengthening India’s manufacturing and export ecosystem with a clear focus on productivity, innovation and global reach. The focus on boosting cotton productivity, setting up a digital public infrastructure for international trade and launching an Export Promotion Mission with sector-specific targets is a transformative step for India’s manufacturing and export ecosystem.”
