Are you looking to start or scale a business but unsure how to access crucial funding and support? Want expert guidance on how to apply for government schemes for startups and MSMEs? You’re not alone. India’s entrepreneurial spirit is booming with over 6 crore registered startups and nearly 6 crore MSMEs, contributing more than 30% of the country’s GDP in 2025. Yet, many businesses struggle with funding gaps, regulatory challenges, and market access.
The good news? The Indian government offers a rich ecosystem of government schemes for startups and businesses to overcome these hurdles. From state government startup schemes to the landmark Startup India Seed Fund Scheme, these initiatives provide financing, tax breaks, mentorship, and market opportunities tailored to various sectors and stages of growth.
This blog breaks down the most important startup funding schemes in India, government business grants in India, and MSME loan schemes by government, so you can seize the right opportunities and grow faster with less hassle.
Government schemes for MSME and startups enable entrepreneurs to:
· Access capital without onerous collateral
· Receive time-bound income tax exemptions
· Benefit from dedicated seed funding and grants
· Get mentorship and connection to incubators
· Leverage patent and R&D assistance
· Enter domestic and foreign markets with subsidy support
As India aims for 1 million+ startups by 2035, these schemes fuel innovation, employment, and export growth like never before.
Launched in 2016 and powering ahead in 2025, Startup India remains the crown jewel for early-stage innovators. It offers:
· 3-year income tax exemption on profits
· Fast-track patent filing with an 80% rebate
· Regulatory self-certification across labor and environmental laws
· Access to the Startup India Seed Fund Scheme (SISFS) with funding up to ₹50 lakh
Startup India benefits and eligibility require:
· Indian registration as Private Limited, LLP, or Partnership
· Turnover below ₹100 crore
· Company age less than 10 years
· Focus on innovation and scalable business models
How to apply: Register your startup on the official Startup India portal, complete DPIIT recognition, and follow application steps for funds and benefits.
A game-changer for early innovators, the SISFS provides crucial seed capital for prototype development and initial market entry.
· Grants up to ₹20 lakh for proof of concept
· Up to ₹50 lakh as convertible debentures for scale-up
· Fund corpus of ₹945 crore spread over 4 years
Notable beneficiaries: Aloe Ecell (biotech), TechpromIot (IoT), Biovantis Healthcare (healthtech), and Stylerent (fashion tech).
PM Mudra Yojana (PMMY) is a flagship collateral-free loan scheme with three categories:
· Shishu (up to ₹50,000) for startups at idea stage
· Kishor (₹50,000 to ₹5 lakh) for expansion
· Tarun (₹5 lakh to ₹10 lakh) for mature small businesses
Over ₹31.85 lakh crore has been disbursed under PMMY as of 2025, empowering millions of micro and small businesses.
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) facilitates collateral-free loans up to ₹2 crore with up to 80% credit guarantee. The Fund of Funds for Startups (₹10,000 crore corpus) amplifies investments through SEBI-registered Alternative Investment Funds, helping hundreds of startups attract private capital.
AIM nurtures innovation through incubators, tinkering labs, and startup challenges, particularly in tech, health, and agri sectors. The PM Vishwakarma Scheme allocates ₹13,000 crores (2023-2028) for grassroots artisans, craftspeople, and product-based startups.
Many states offer incentives such as:
· Stamp-duty waivers
· Capital subsidies
· Export promotion
· Women entrepreneur support
· Sector-specific grants for IT, manufacturing, biotech
Top states include Karnataka, Maharashtra, Tamil Nadu, Gujarat, and Telangana, each with dedicated portals and tailored startup policies.
Being registered as an MSME is critical to access many subsidies and loans. The MSME subsidy scheme 2025 offers:
· Capital and interest subsidies
· Technology upgradation grants
· Marketing and export incentives
MSME registration and subsidy process is streamlined online through Udyam Registration portal, requiring minimal documentation and offering prompt acknowledgment.
1. Identify suitable schemes: Use government portals or expert platforms to match your startup type and stage.
2. Register your business: Complete company or MSME registration as required.
3. Apply for DPIIT recognition: Essential for most startup schemes.
4. Prepare documents: Business plans, financial statements, patents, GST/PAN proofs.
5. Submit applications online: Through official schemes’ portals or via authorized incubators and financial partners.
6. Track application status: Engage consultants or platform support for timely follow-ups.
Businesses can tap into:
· Startup India Seed Fund Scheme for early-stage seed capital
· PM Mudra Yojana for easy micro loans
· Credit Guarantee Fund schemes offering risk coverage on loans
· Technology upgradation subsidies under MSME development
· Sectoral export incentives via Market Access Initiatives (MAI)
Since inception, these schemes have supported:
· Recognition of 1.65+ lakh startups by DPIIT
· Creation of over 17.6 lakh direct jobs by startups
· Disbursement of ₹31.85 lakh crore via Mudra loans
· Funding to over 3,600 startups via SISFS fund incubation
· Emergence of unicorns such as Razorpay, Ola, and Lenskart
These startup funding schemes in India and central government schemes for entrepreneurs have never been easier or more critical for success. With generous budgets, inclusive policies, and streamlined digital channels, 2025 is your year to grow with government support.
To maximize your chances, start with proper MSME registration and subsidy process, seek top government grants for small businesses in India, and consider expert help for application and documentation. Your startup journey gets a turbo boost with these initiatives supporting every step from ideation to global scale.
Harness the power of government schemes for startups and let your business thrive with confidence and credibility. Make informed decisions, tap expert resources, and seize the opportunities waiting for you right now.
1. What are the best government schemes for startups in India in 2025?
Some of the top schemes are Startup India Seed Fund Scheme (SISFS), PM Mudra Yojana, Atal Innovation Mission, Credit Guarantee Scheme (CGTMSE), and various state startup schemes.
2. How can I apply for government funding for my startup?
You can apply online through official portals like Startup India, MSME Udyam Registration, or via state startup portals. Make sure your business is registered and DPIIT-recognized.
3. Who is eligible for Startup India benefits?
Any Indian-registered business (Private Limited, LLP, or Partnership) less than 10 years old with turnover below ₹100 crore and focused on innovation or scalable growth.
4. What is the Startup India Seed Fund Scheme?
It provides up to ₹20 lakh as a grant for prototype development and up to ₹50 lakh as investment support for scaling up.
5. Do MSMEs also get funding or grants?
Yes, MSMEs can access capital and interest subsidies, technology upgradation funds, and collateral-free loans under PM Mudra Yojana and CGTMSE.
6. Is there any government help for women entrepreneurs?
Yes, many central and state-level programs offer special subsidies, training, and grants for women-led startups and MSMEs.
7. Which state gives the best support for startups?
States like Karnataka, Gujarat, Maharashtra, Tamil Nadu, and Telangana are leading with strong startup ecosystems and funding programs.
8. Can I apply for more than one government scheme at a time?
Yes, you can apply for multiple schemes if you meet their eligibility criteria and maintain compliance with each program’s terms.
9. What documents do I need to apply for these schemes?
Commonly required documents include business registration certificates, GST and PAN, project report, financials, and bank details.
10. How can StartupFlora help me get government funding?
StartupFlora guides you through registration, documentation, and applying for suitable schemes to increase your chances of approval.