Union Budget 2025: AI Startups Welcome ₹10,000 Crore Fund, Deep Tech Boost
Finance Minister Nirmala Sitharaman, in her record eighth Budget presentation on February 1, 2025, announced a ₹10,000 crore Fund of Funds to support startups and deep-tech innovation. The budget also focused on strengthening India’s position in artificial intelligence (AI), deep tech, and innovation, with investments in AI Centers of Excellence (CoEs) and expanded credit support for startups.
The startup ecosystem, particularly AI and deep-tech entrepreneurs, hailed the announcements as game-changing measures that will fuel innovation, boost funding availability, and foster talent development. Here’s how key AI startup leaders reacted to the budget:
Bruce Keith – Co-founder & CEO, InvestorAi
“The ₹10,000 crore Fund of Funds is a significant step toward strengthening domestic capital in the startup sector. The announcement of a Deep Tech Fund is also encouraging, as it aligns with the need to fund agile and creative teams that can drive meaningful innovation. The emphasis on AI education, IIT expansions, and Centers of Excellence will further help develop the necessary talent pool to sustain India’s AI growth.”
Sridhar Parthasarathy – Co-founder & General Partner, Bluehill.VC
“The government’s renewed focus on Alternative Investment Funds (AIFs) to channel resources effectively is commendable. However, alongside equity funding, startups urgently require debt financing. The introduction of a credit guarantee scheme will enable startups to achieve a balanced mix of funding sources. The Deep Tech Fund of Funds is a crucial step in making India a stronger contender in the global AI and space tech race.”
Ankur Mittal – Co-founder, Inflection Point Ventures
“A robust credit framework for startups was one of our key asks, and the budget delivers on this front. This initiative will allow startups to build sustainable businesses rather than relying solely on equity infusion. With increased financial support, startups can make significant investments in operations, personnel, and technology, creating jobs and driving long-term economic value.”
Dinesh Arjun – CEO & Co-founder, Raptee.HV
“India’s vision for Viksit Bharat rightly prioritizes innovation and technology. The Finance Minister’s focus on deep tech investments will strengthen India’s industrial ecosystem and make it globally competitive. Additionally, the exemption on Li-Ion batteries and other capital goods is a game-changer for the EV sector, making batteries more affordable and accelerating mass adoption of electric vehicles.”
Pankit Desai – Co-founder & CEO, Sequretek
“The establishment of National AI Centers of Excellence (CoEs) marks a pivotal shift—AI is no longer just a boardroom discussion but a core part of national policy. The government’s serious financial commitments to deep tech and AI demonstrate a strong intent to foster innovation and talent development. The 5-year extension of the startup incorporation period and tax relief measures will further support the growth and stability of startups, enabling them to scale effectively.”
A Budget That Strengthens AI, Deep Tech, and Startup Growth
With a strong focus on deep-tech funding, AI talent development, and startup-friendly policies, Union Budget 2025 sets the stage for India’s emergence as a global AI and innovation powerhouse. The government’s ₹10,000 crore infusion into startup funding and AI initiatives is expected to drive sustained growth, investment, and job creation, reinforcing India’s position in the competitive global technology landscape.
