Deeptech Fund of Funds to be set up to nurture next-generation startups: FM Nirmala Sitharaman
The finance minister also announced the establishment of a Centre of Excellence in Artificial Intelligence for Education with a total outlay of Rs 500 crore. This initiative builds on the three AI centres set up last year for agriculture, healthcare, and sustainable cities.
In a major push to fuel research and development efforts in the private sector, a deeptech-focused Fund of Funds will be established to nurture the next generation of startups, said Finance Minister Nirmala Sitharaman while presenting the Budget 2025.
“To implement private sector research and development and innovation initiatives, announced in the July budget, I am now allocating Rs 20,000 crore for this purpose,” Sitharaman said.
“A deeptech FoF will also be explored to catalyse the next-generation startups, as a part of this initiative. In the next 5 years, under the PM Research Fellowship scheme, we will provide 10,000 fellowships for technological research, in IITs and IIScs with enhanced financial support,” she added.
This initiative highlights the government’s commitment to nurturing cutting-edge research and strengthening India’s status as a global innovation hub.
In addition, the minister also announced the establishment of a Centre of Excellence in Artificial Intelligence for Education with a total outlay of Rs 500 crore. This initiative builds on the three AI centres set up in 2023 for agriculture, healthcare, and sustainable cities.
These Centres of Excellence, established under the vision of “Viksit Bharat,” will be led by top educational institutions in collaboration with industry partners and startups, who will drive interdisciplinary research, create cutting-edge AI applications, and develop scalable solutions in these sectors.
"I'm excited about the Government of India's forward-thinking announcement in the recent budget regarding the establishment of Centers of Excellence for AI and the emphasis on skilling. The focus on practical skills is vital. It ensures that India's young workforce is equipped to contribute meaningfully to the AI revolution, driving innovation and economic growth. By investing in both education and practical training, the government is laying the foundation for India to become a global leader in AI development and application," Bhaskar Roy, Client Partner APAC and Bangalore Center Head, Fractal tells YourStory.
On Thursday, Electronics and IT Minister Ashwini Vaishnaw announced that India will soon introduce its own foundational AI model, developed indigenously to compete with global counterparts.
Last year, India launched the IndiaAI Mission with over Rs 10,000 crore allocated over five years, promising to install 10,000 specialised AI processors through public-private partnerships.
Under the IndiaAI Mission, the government has already procured nearly 19,000 GPUs to support AI development. These GPUs will be made available to startups and researchers via a dedicated portal at subsidised rates.
"India stands at a defining moment in history, where its talent, indomitable entrepreneurial spirit, and a robust policy framework converge with unprecedented technological progress. In a world grappling with rising geopolitical tensions, the call for self-reliance and indigenous innovation has never been louder. A Deeptech Fund of Funds to fuel cutting-edge innovations, combined with 10,000 fellowships under the PM Research Fellowship Scheme, will ignite a new era of technological sovereignty," said Vishesh Rajaram, Managing Partner, Speciale Invest.
Amitabh Kant, G20 Sherpa for the Government of India earlier said the next major step in solidifying India’s position on the global stage is the creation of a dedicated Rs 25,000 crore fund of funds to support deeptech innovations.
“The big-ticket thing is a Rs 25,000 crore fund of funds for the deeptech sector,” Kant said, stressing that while the country has made significant progress with its existing fund for startups, a specialised deeptech fund is essential for nurturing breakthrough technologies like artificial intelligence (AI), quantum computing, robotics, and biotech. "India has a lot of capital; we need not depend on foreign capital. People need to take a little risk along with the venture capital firms in startups," he said, speaking at YourStory's startup-tech event, TechSparks 2024, in Bengaluru.