Analysts Hails Fund of Funds For Deep Tech-Startups in Indian Budget

(MENAFN- Inno Gress) 01st Feb. 2025, New Delhi

Today Indian Finance Minister Nirmala Sitharaman presented Govt. of India’s budget for year 2025-2026 in the Indian Parliament.

This budget has provisioned two Funds of Funds (FoF) for Startups, one exclusively for Deep Tech. Startups and another for Startups in general, in addition to other budgetary outlays like Rs. 20,000 Cr for Private Sector R&D, Rs. 500 Cr for AI (Artificial Intelligence) Center of Excellence, National Manufacturing Mission, Nuclear Energy Mission, National Geospatial Mission.

Analyst 5 Jewels Research (5JR) at Innogress has hailed these provisions under the Union Budget of Govt. of India, and termed provisioning of Fund of Funds for Deep Tech-Startups and Rs. 20,000 Cr budgetary allocation for Private Sector R&D as much needed intervention to strategically position India in Deep Tech. innovations.

Giving his analyst outlook on Union Budget presented today in the Indian Parliament by FM Nirmala Sitharaman, Chief Analyst of 5 Jewel Research at Innogress Mr Sumant Parimal, has said “Deep Tech innovation and commercialization is capital intensive and requires long gestation period for deep tech ventures, and with limited exposure of private funds in Indian Deep Tech space, Govt. coming forward to set up Fund of Funds for Deep Tech Startups is much needed initiative for establishing a vibrant deep tech ecosystem in India. With deep tech products and solutions becoming strategic for the country’s development and self-reliance, Fund of Funds for Deep Tech. startups to give access of much needed capital which can be deployed for innovating, creating and developing various products, solutions and capabilities in deep tech areas like AI (Artificial Intelligence), Robotics, QuantumTech, Biotechnology, MedTech, FinTech, ClimateTech”.

“Govt. Of India also factored into fund requirements of other startups beyond deep tech. domain and allocated additional Rs. 10,000 Cr for a new Fund of Funds targeted for startups in general. In the previous version of Fund of Funds, with Govt. contribution of Rs. 10,000, the Alternate Investment Funds (AIFs) for startups have received commitments of more than Rs. 91,000 Crore. Hence we anticipate similar to higher scale of involvement of private funds in this new version of Fund of Funds announced today which is targeted for Indian startups, and expected to trigger higher investments in Indian startups” Sumant Parimal adds further.

“Over Rs. 90K Cr Funds under existence under AIFs-FoF and further addition of Rs. 10K Cr Funds by Govt. of India in today’s presented budget, total FoF exposure to Indian startups is now over Rs. 100K Cr, which is a great boost for Indian startup ecosystem. Further a focused FoF for Indian Deep Tech. Startups is going to give much needed support to Deep Tech. industry ecosystem” says Shri Jai Shankar Sharma, a senior mentor of Startups at IIT Kanpur’s Alumni Association and advisor of Innogress.

Commenting further on today’s budget provision for establishing five National Centres of Excellence for skilling with global expertise and partnerships to equip Indian youth with the skills required for “Make for India, Make for the World” manufacturing Shri Jai Shankar Sharma adds “Provisioned skilling programs are sure to grow faster to keep pace with the disruptions happening because of AI/ML/Deep Tech shake-ups”.

5 JR’s Chief Analyst also hailed Rs. 500 Cr budgetary outlay for setting up a Centre of Excellence in AI for Education in addition to previously announced Center of Excellence in AI for agriculture, health, and sustainable cities in 2023. However chief analyst Sumant Parimal also highlighted need for accommodating AI as Strategic-Core Sector in India with higher budgetary allocation, which he first highlighted during year 2022 pre-budget expectations. Even after three years of his budgetary expectations from the Indian Finance Minister, AI is still to be accorded as a Strategic-Core sector like status in Government policies, and India’s spend on AI is still at a level lower compared to US, China.

5 JR’s Chief Analyst also hailed announcement of BharatTradeNet (BTN) for international trade to be set-up as a unified platform for trade documentation and financing, which is a latest entrant into India’s Digital Public Infrastructure (DPI) stack. As per 5 JR Analyst, establishing BTN shall lead to better integration of Indian trade and commerce with the Global Supply Chains, leading to higher exports.

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