It’s not surprising that the biggest headlines from the Union Budget 2025-26 are all around the relief for salaried individuals with the reduction in income tax, but there was plenty in it for the Indian startup ecosystem as well.

In her Budget 2025 speech, Finance Minister Nirmala Sitharaman mentioned startups six times, a lot more than last year, and there were some concrete announcements that could spur the tech ecosystem even further.

Sitharaman’s eighth consecutive budget address had plenty to ponder for the domestic manufacturing ecosystem, deeptech startups, for MSMEs and retail brands focussing on exports and more. But there was also a spotlight on AI and research and development in key sunrise sectors.

Here’s a breakdown of the key takeaways from the Union Budget 2025-26 for the Startup ecosystem:

Budget Boosts Startup Fundraising Outlook

From a startup perspective, the biggest announcement was the extension of the Startup Mission’s flagship INR 10K Cr fund with a fresh contribution of another INR 10K Cr. In her speech, the FM reasoned that government-backed alternative investment funds (AIFs) for startups have already received commitments of over INR 91K Cr overall from other LPs.

From a taxation lens, Sithraman has proposed extending the benefits provided under Section 80-IAC (which allows startups to apply for tax exemption) for another period of five years. Startups incorporated before April 1, 2030 will be able to receive the tax exemption benefits.

Besides, the government also enhanced the credit guarantee cover for startups operating in 27 focus sectors important for Atmanirbhar Bharat from the erstwhile INR 10 Cr to INR 20 Cr. These include startups in the aerospace and defence tech, IT, logistics, renewable energy, financial, education services, among others.

Electronics, EV Manufacturing Take Front Seat

Not unlike last year, the government’s push to fortify domestic manufacturing took the centre seat in this year’s budget announcements. Domestic assembly and manufacturing of devices has been given a bigger platform in this year’s budget.

In what seems to be a bid to further promote the electric vehicles (EV) sector, the Centre has exempted basic customs duty........

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