The Union Cabinet, chaired by Prime Minister Narendra Modi, has officially approved the Startup India Fund of Funds 2.0 (FFS 2.0) with a massive corpus of ₹10,000 Crore. The decision was finalized during a meeting on February 13, 2026. This new phase aims to provide much-needed long-term capital to startups working in deep technology and innovative manufacturing sectors.
What is the main purpose of this ₹10,000 Crore fund?
This fund is designed to solve the problem of funding for companies that take a long time to grow, often called “Patient Capital.” Startups in high-tech manufacturing and deep tech usually need more time before they start making profits. The government has decided to offer a higher percentage of contribution to investment funds that focus specifically on these difficult sectors. This move will encourage investors to put money into complex technologies rather than just quick-return businesses.
How will this help startups in smaller cities?
The government wants to make sure that startup culture is not limited to just big metro cities like Bengaluru or Delhi. The new rules incentivize Venture Capitalists (VCs) to invest in companies based in Tier 2 and Tier 3 cities. This will help bring innovation and jobs to smaller towns across India. Additionally, the fund prioritizes supporting smaller and first-time fund managers, which helps in building a strong domestic investment network that does not depend entirely on foreign money.
Key Highlights of the Cabinet Approval
- Total Amount: ₹10,000 Crore allocated for FFS 2.0.
- Operating Agency: SIDBI will manage the fund operations.
- Job Data: The Startup India initiative has helped create over 21 lakh jobs since 2016.
- New Recognition Limit: The turnover limit for startup recognition has been doubled to ₹200 crore.
- Target Sectors: Deep Tech, High-Tech Manufacturing, and Early-Growth Stage startups.
