The establishment of a new Fund of Funds (FoF) with an additional ₹10,000 crore and an expanded scope is a welcome move. The initial ₹10,000 crore FoF, managed by SIDBI—of which Cactus Partners has also been a beneficiary—has been a major catalyst for India’s startup ecosystem, significantly contributing to its vibrancy by helping mobilize ₹91,000 crore for Indian AIFs. The exploration of a deep-tech Fund of Funds is also a positive step and will be crucial in driving cutting-edge innovation in India. Additionally, the provision of term loans of up to ₹2 crore for first-time entrepreneurs from certain sections of society, including women, will further encourage entrepreneurship. The increased credit guarantee cover, along with a reduced guarantee fee for startups and MSMEs, will enhance much-needed access to credit.
Cleantech and electronics manufacturing have been visibly prioritized in this budget. The exemption of customs duty on 12 additional critical minerals, including lithium-ion battery scrap, will support India’s recycling and minerals processing industry. Similarly, duty exemptions on incremental capital goods for EV battery and mobile phone battery manufacturing will incentivize domestic production and provide a boost to cleantech startups. The stated commitment to supporting the manufacturing of solar cells, EV batteries, and electrolyzers is another positive move. Moreover, there appears to be a clear intent to reduce regulatory compliance for businesses, including startups. Overall, this budget is a step in the right direction toward strengthening the startup ecosystem.
