Startup Schemes for AI Startups in India: Who’s Actually Funding Innovation?

AI startups in India are growing fast, but turning a great idea into a real product takes more than just ambition hence it needs the right kind of funding and support. To help with this, the Indian government has rolled out several funding schemes designed especially for AI and deep-tech startups. These programs don’t just give money — they also offer mentorship, access to markets, and guidance to help founders build and scale.

Here’s a closer look at some of the top schemes available for AI startups in India.

SAMRIDH

SAMRIDH was launched by Ministry of Electronics and Information Technology (MeitY) in August 2021. The objective was to close the funding and acceleration gap for tech startups, especially in deep-tech areas like AI, ML, and IoT. Many promising Indian startups could not scale due to lack of access to structured mentorship and risk capital. SAMRIDH solves this by providing various benefits.

• What the Scheme Offers:

• Eligibility Criteria:

• To apply, a startup must have obtained recognition from DPIIT and be less than 10 years old.
• Shall contain a working MVP.
• Startups can apply only if a MeitY-approved accelerator has incubated or supported them.
• AI/ML/IoT/deep-tech focused startups.
• Disbursement Details:

• Disbursed in 2-3 tranches based on achievements.
• Government matches investor contribution on 1:1 ratio.

 TIDE 2.0 (Technology Incubation and Development of Entrepreneurs)

TIDE 2.0 was introduced by Ministry of Electronics and IT (MeitY) in 2019. The objective was to strengthen the tech startup ecosystem in emerging areas like AI, cybersecurity, and robotics, etc. The goal was to create regional incubation capacity and supports in turning ideas into commercial market.

• What the Scheme Offers:

• Eligibility Criteria:

• Indian startup recognized by DPIIT.
• Preference given to AI/deep-tech/IoT innovations driven startup.
• Startups can apply only if a TIDE 2.0 centre has incubated them.
• Disbursement Details:

• Fund release based on validated progress reports and achievements.
• The grant is maximum 7Lakh per startup.

NIDHI-PRAYAS

NIDHI-PRAYAS was launched by Department of Science and Technology in 2016. It came into existence to support innovators during the pre-startup phase, helping them build MVPs/ prototypes of AI products before formally incorporating as a startup. It aims to reduce risk and foster roots for innovation.

• What the Scheme Offers:

• Eligibility Criteria:

• Individuals or early stage entrepreneurs, young startups.
• Ideas suggested by them must be in deep-tech or AI space.
• Innovator must work out of PRAYAS centre.
• Disbursement Details:

• Directly paid to vendors or reimbursed to innovators.
• Utilization monitored by PRAYAS centre.

Startup India Seed Fund Scheme (SISFS)

SISFS was launched by DPIIT, Ministry of Commerce and Industry in April 2021. The objective was to fill the funding gap at the proof of concept (PoC) and early launch stages. Many promising AI startups could not get Venture Capital funding without a validated prototype. SISFS helps fill that early funding gap by providing startups with grants and equity support through trusted incubators.

• What the Scheme Offers:

• Eligibility Criteria:

• Startups can apply only if DPIIT has recognized them and they are not more than 2 years old.
• Shall not have received similar public grants.
• Must apply through a recognized SISFS incubator.
• Disbursement Details:

• Disbursement in lots based on achievements.
• Managed and released by incubators.

Is it a Loan? Do You Have to Pay Back?

All the schemes provide grant and equity support which will help startup grow and will gradually boost up the economy. They are not loans provided by government; you do not have to pay any interest over these funds. But you will have to report to them, where the fund has been utilised and whether it is adding in to startup’s growth or not. You do not have to provide any property papers or asset as a collateral to grant this fund, but it is necessary to follow the step-by-step procedure and to provide each fair document required for raising the fund.

Here is a table providing insights over each scheme: –

Step-by-Step Guide: How to Apply

1. Check Eligibility:
   • Startup must be DPIIT-recognized.
2. Select Relevant Scheme:
   • Choose suitable scheme based on your startup’s stage and growth areas.
   • Visit the scheme’s official site (Startup India, MeitY, MSH, DST).
3. Find a Partner Incubator:
   • Identify empanelled incubators or accelerators from the official website of the scheme.
   • Reach out with pitch deck and business overview.
4. Prepare Application:
   • Prepare all documents containing business plan, traction metrics, tech architecture, financial model, founder profiles, market size, etc. As per the requirement under scheme.
5. Apply on Portal/Through Incubator:
   • Submit the documents and forms online on portal itself.
   • Incubator on receipt of application may interview and evaluate your team.
6. Funding & Monitoring:
   • If approved, funding agreement needs to be signed.
   • Funds are released in tranches/ lots.

📌 Common Pitch Deck Mistakes That Kill Your Chances

India has no shortage of smart ideas — what many startups need is the right kind of support to turn those ideas into real businesses. Thankfully, both the government and private investors are stepping up to help. Whether you’re just starting out or ready to grow, there are options out there to guide and fund your journey. The key is to be prepared, stay clear on your goals, and apply where you truly fit. With the right approach, your startup could be the next success story.

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This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.

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