Thinking of launching your own startup? You’re not alone;
That’s why the government introduced the Startup India Seed Fund Scheme in 2021, which offers seed funding through incubators to help startups build prototypes, conduct trials, and enter the market.
Under this scheme, startups can receive up to Rs 20 lakh as a grant to test proof of concept, build prototypes, or conduct product trials. For bigger needs such as market entry, commercialisation or scaling up, funding of up to Rs 50 lakh is available in the form of debt, debt-linked instruments, or convertible debentures.
The funds must be used strictly for the purpose for which they are granted, including the creation of facilities and other business requirements.
The Startup India Seed Fund Scheme is designed to be flexible and inclusive. It is sector-agnostic, meaning that startups from any industry can apply.
There is no requirement for physical incubation, and the programme runs across India without geographical restrictions.
Applications are open year-round, and startups are free to approach up to three incubators at the same time, increasing their chances of receiving support.
To qualify, a startup must be incorporated not more than two years before applying. It should have a strong business idea with potential for market fit, commercialisation, and scalability.
The startup is also expected to use technology in its core product, service, or business model to solve a specific problem.
Preference is given to ventures working on innovative solutions in areas such as agriculture, education, energy, healthcare, mobility, defence, biotechnology, food processing, textiles, and social impact sectors.
A key condition is that the startup should not have already received more than Rs 10 lakh in monetary support from other government schemes, although allowances such as prize money, subsidised workspaces, or lab access are excluded from this limit.
In addition, at least 51 percent of the startup’s shareholding must be with Indian promoters at the time of application. Each startup can seek seed support in the form of both grants and debt/convertible debentures, but only once under the guidelines of the scheme.
The scheme represents a major effort to support the startup ecosystem by easing one of the toughest challenges faced by entrepreneurs—early-stage funding.
By keeping the programme open to all sectors and regions, and by allowing applications year-round, the government aims to ensure that promising ideas get the backing they need to grow into successful ventures.