India’s entrepreneurial ecosystem is rapidly evolving, and to fuel this growth, the government has introduced several initiatives to support budding entrepreneurs. Best Government Schemes for Startups in India (2025 List) highlights the most impactful programs launched by the Indian government to nurture innovation, provide funding support, and streamline regulatory processes. These schemes are designed to empower startups across various sectors including technology, agriculture, healthcare, and manufacturing. From tax exemptions and seed funding to incubation support and ease of doing business, each scheme plays a crucial role in reducing the entry barriers for startups. In 2025, new policies and revisions have further aligned these initiatives with global startup trends, making India one of the most promising startup hubs. This article provides a concise guide to the top government-backed startup schemes you should know about this year, whether you’re launching a new venture or scaling an existing one.
Best Government Schemes for Startups in India (2025 List)
1. Startup India Initiative
Launched in 2016, the Startup India Initiative remains the flagship program for nurturing the Indian startup ecosystem. In 2025, the scheme has become more inclusive and digitized, offering streamlined registration through the Startup India portal. Startups recognized under this initiative enjoy several benefits including a 3-year income tax holiday, easier public procurement norms, self-certification under labor and environmental laws, and access to government funding via the Fund of Funds for Startups (FFS). As of 2025, more than 100,000 startups have registered under this scheme. The government has also introduced sector-specific startup cells and mentorship support. Eligible startups must be less than 10 years old and have an annual turnover not exceeding ₹100 crore. This initiative is ideal for new-age entrepreneurs who seek credibility, funding access, and regulatory ease to scale their ventures quickly.
2. MUDRA Loan Scheme (Micro Units Development and Refinance Agency)
The MUDRA Loan Scheme, operated under the Pradhan Mantri MUDRA Yojana (PMMY), is targeted at micro and small-scale entrepreneurs. Startups and new businesses in the informal or unorganized sectors can avail collateral-free loans ranging from ₹50,000 to ₹10 lakh under three categories: Shishu (up to ₹50,000), Kishore (₹50,000–₹5 lakh), and Tarun (₹5–₹10 lakh). As of 2025, the application process has moved largely online via Udyami Mitra and partnered bank portals, reducing paperwork and processing time. This scheme is particularly helpful for small-scale manufacturing units, local service businesses, traders, and first-time entrepreneurs. The interest rates are competitive and vary based on the lending institution. Many financial literacy and credit counselling programs are now integrated to help beneficiaries better manage funds. MUDRA remains one of the easiest and most accessible government-backed funding sources for grassroots startups.
3. Atal Innovation Mission (AIM)
The Atal Innovation Mission, spearheaded by NITI Aayog, aims to create a culture of innovation and entrepreneurship across India. By 2025, AIM has expanded its reach through the establishment of over 10,000 Atal Tinkering Labs (ATLs) in schools and Atal Incubation Centres (AICs) in universities and research institutions. Startups can benefit from mentorship, access to R&D facilities, seed funding, and connections with global innovation networks. AIM particularly supports tech-driven startups in AI, IoT, robotics, blockchain, and green energy. Under the AIC component, selected startups receive funding support up to ₹10 crore and operational hand-holding for up to 5 years. The mission also partners with corporates and international innovation bodies to provide exposure and co-innovation opportunities. AIM is best suited for startups focused on deep tech and impact-driven solutions looking for a nurturing ecosystem.
4. SIDBI Fund of Funds for Startups (FFS)
The SIDBI-managed Fund of Funds for Startups (FFS) was launched under the Startup India initiative and continues to play a pivotal role in 2025. With a corpus of ₹10,000 crore, the fund operates by investing in SEBI-registered Alternative Investment Funds (AIFs), which in turn fund eligible startups. This indirect funding mechanism ensures professional investment management while reducing the risk burden on government agencies. Startups across fintech, edtech, healthtech, SaaS, and agritech have benefited from this scheme. One major update in 2025 is the increased focus on women-led startups and rural innovators. Unlike direct grants or loans, startups don’t apply directly to SIDBI but pitch to AIFs that have received funding under the scheme. This model ensures financial discipline and mentoring. FFS is ideal for growth-stage startups looking to raise Series A or B capital with credibility and support from government-backed VCs.
5. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
The CGTMSE scheme, launched by the Ministry of MSME and SIDBI, is designed to facilitate credit access to startups and small businesses without the need for collateral. In 2025, CGTMSE has expanded its guarantee coverage up to ₹5 crore and made the process more transparent through integration with digital lending platforms and GST databases. This credit guarantee covers a substantial portion of the default risk, encouraging banks and NBFCs to lend to first-time business owners. The scheme now includes a special vertical for women entrepreneurs, SC/ST founders, and startups in Tier 2 and Tier 3 cities. The guarantee covers both term loans and working capital facilities. By eliminating the need for collateral and minimizing credit risk, CGTMSE makes it easier for startups to access funds during their crucial early stages. The improved turnaround time and simplified eligibility criteria make it a game-changer for MSMEs and startups in 2025.
Conclusion
India’s startup ecosystem continues to thrive, thanks to a range of supportive government schemes that address funding, innovation, incubation, and regulatory ease. From flagship programs like the Startup India Initiative to financial boosters like MUDRA loans and CGTMSE, these schemes in 2025 are more streamlined and accessible than ever. Whether you’re launching a tech venture or scaling a small business, leveraging these government-backed initiatives can significantly improve your chances of success. Staying informed and aligned with the right scheme is key to building a sustainable startup in India’s competitive environment. Choose wisely and make the most of these powerful opportunities.
FAQs
1. What are the best government schemes for startups in India in 2025?
The best government schemes for startups in India in 2025 include the Startup India Initiative, MUDRA Loan Scheme, Atal Innovation Mission, SIDBI Fund of Funds, and CGTMSE. These programs offer financial aid, mentorship, incubation support, and tax benefits, making it easier for entrepreneurs to launch and grow their businesses.
2. How can I register my startup under the Startup India Initiative?
To register under the Startup India Initiative, visit the official Startup India portal, create an account, and complete the online application form. You’ll need to upload documents like your incorporation certificate, business plan, and PAN. Once approved, you can access benefits such as tax exemptions and funding schemes.
3. Can I get a loan without collateral for my startup in India?
Yes, schemes like the MUDRA Loan and CGTMSE offer collateral-free loans to startups and small businesses. These loans are designed to support first-time entrepreneurs and MSMEs with easy credit access and minimal paperwork. The loan amount varies based on the scheme and business eligibility.
4. What is the SIDBI Fund of Funds for Startups and how does it work?
The SIDBI Fund of Funds for Startups (FFS) is a ₹10,000 crore initiative that invests in SEBI-registered venture capital funds, which then fund eligible startups. Startups do not apply directly to SIDBI but pitch to partnered venture capital funds. It ensures professional capital management and better growth opportunities for startups.
5. Which government schemes are suitable for tech startups in India?
Tech startups in India can benefit from schemes like Atal Innovation Mission, Startup India Initiative, and SIDBI Fund of Funds. These programs offer incubation support, innovation funding, and access to research infrastructure. They’re ideal for startups working in AI, IoT, SaaS, biotech, and other emerging technologies.