Cabinet Approval and Vision
Startup India Fund of Funds 2.0 Boosts Innovation Ecosystem: The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Startup India Fund of Funds 2.0 (FoF 2.0) with a corpus of ₹10,000 crore in February 2026. This initiative aims to mobilize long-term capital for India’s startup ecosystem. The scheme focuses on strengthening domestic venture capital and reducing dependence on foreign funding sources.
The initiative is aligned with India’s vision of achieving economic transformation under Viksit Bharat @ 2047. It promotes innovation-led growth and technological self-reliance. The move also enhances India’s global competitiveness in emerging technology sectors.
Static GK fact: The Union Cabinet is the highest decision-making body of the executive branch and is headed by the Prime Minister of India.
Structure and Implementation Model
The Startup India Fund of Funds 2.0 does not directly invest in startups. Instead, the government allocates funds to Alternative Investment Funds (AIFs) registered with the Securities and Exchange Board of India (SEBI). These AIFs further invest in eligible startups across various sectors.
This model ensures professional fund management and promotes private sector participation. It also helps attract additional capital from private investors, thereby multiplying the overall investment impact. The approach reduces funding gaps, especially in high-risk and innovation-intensive sectors.
Static GK Tip: SEBI, established in 1992, regulates capital markets and protects investor interests in India.
Building on Success of Fund of Funds 1.0
The new scheme builds upon the achievements of the Fund of Funds for Startups (FFS 1.0) launched in 2016. The earlier fund had a corpus of ₹10,000 crore, which was fully committed through 145 Alternative Investment Funds. These funds collectively invested over ₹25,500 crore in more than 1,370 startups.
Key sectors supported under FFS 1.0 included Artificial Intelligence, fintech, biotechnology, robotics, clean energy, and space technology. The scheme played a significant role in nurturing early-stage startups and strengthening India’s venture capital ecosystem.
Static GK fact: The Startup India initiative was launched on January 16, 2016, to promote entrepreneurship and innovation.
Focus on Strategic and Emerging Sectors
The FoF 2.0 prioritizes investment in deep tech and innovative manufacturing sectors, including semiconductor design, artificial intelligence, robotics, and clean energy. These sectors are essential for national technological sovereignty and economic resilience.
The scheme also targets early-stage startups, which often face funding shortages during their initial growth phases. By providing capital support, the initiative helps startups scale operations and sustain innovation.
Additionally, the scheme encourages venture capital investments in tier-2 and tier-3 cities. This ensures balanced regional development and promotes entrepreneurship beyond traditional startup hubs like Bengaluru and Mumbai.
Strengthening India Startup Ecosystem
India’s startup ecosystem has witnessed rapid growth since 2016, increasing from fewer than 500 startups to over 2 lakh DPIIT-recognised startups by 2025. This growth has positioned India as one of the world’s leading startup ecosystems.
The Department for Promotion of Industry and Internal Trade (DPIIT) plays a key role in recognizing startups and implementing startup policies. The FoF 2.0 strengthens India’s innovation infrastructure and supports employment generation.
Static GK Tip: India is currently the third-largest startup ecosystem in the world, after the United States and China.
Role in Achieving Viksit Bharat 2047
The Startup India Fund of Funds 2.0 supports India’s long-term development strategy by promoting high-tech industries and manufacturing capabilities. It helps create high-quality jobs and enhances India’s economic resilience.
The scheme strengthens domestic investment capacity and accelerates innovation-led growth. It also supports India’s ambition to become a global leader in technology and entrepreneurship by 2047.
Static Usthadian Current Affairs Table
Startup India Fund of Funds 2.0 Boosts Innovation Ecosystem:
| Topic | Detail |
| Scheme Name | Startup India Fund of Funds 2.0 |
| Approval Authority | Union Cabinet |
| Corpus Amount | ₹10,000 crore |
| Implementation Method | Investment through Alternative Investment Funds |
| Regulator | Securities and Exchange Board of India |
| Earlier Scheme | Fund of Funds for Startups launched in 2016 |
| Key Focus Sectors | Artificial Intelligence, robotics, semiconductor, clean energy |
| Implementing Authority | Department for Promotion of Industry and Internal Trade |
| National Goal Alignment | Viksit Bharat 2047 |
| India Startup Rank | Third-largest startup ecosystem globally |
