Budget 2025 Explainer: Key Takeaways for Startup Entrepreneurs & MSMEs

The Union Budget 2025, which Finance Minister Nirmala Sitharaman presented, introduces transformative policies and financial support for startups, MSMEs, and entrepreneurs in India. Key highlights include a ₹10,000 crore Fund of Funds, extended tax exemptions for DPIIT-recognized startups until 2030, the launch of a Deep Tech Fund, Mudra Loans to empower homestay entrepreneurs, and targeted initiatives to boost sectors such as clean tech, medical tourism, and sustainable manufacturing. With a strong emphasis on innovation, inclusivity, and self-reliance, the budget sets the stage for India’s emergence as a global powerhouse in entrepreneurship and technology.

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Team TICE has created this Startup Budget 2025 Guide for Entrepreneurs to provide an in-depth analysis of the budget’s policy announcements and their impact on businesses and the economy.

Fund of Funds for Startups 2025

"Now, we will set up a new Fund of Funds with expanded scope and a fresh contribution of another Rs. 10,000 crore."

Likely Impact

• • Capital mobilization will continue: The additional Rs. 10,000 crore infusion will foster a robust startup ecosystem, promoting new ventures and high-growth entities.
  • New funding instruments will support startups: The expanded scope will allow for more flexible and diverse financial instruments.
  • Employment and inclusivity will receive a boost: Increased capital availability will support employment generation and the growth of women-led startups and ventures beyond metro cities.
  • Critical sectors will receive strengthened support: We will strategically allocate the funds to key sectors, promoting self-reliance and domestic innovation.

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New Credit Guarantee Scheme for Startups (CGSS)

"To improve access to credit, we will enhance the credit guarantee cover from Rs. 10 crore to Rs. 20 crore."

Likely Impact:

• • Startups will have increased access to non-equity funding: Lower guarantee fees will make debt capital more affordable, reducing reliance on equity funding.
  • Financial institutions will show stronger financial inclusion: They will be more willing to extend credit to high-risk startups.
  • Select focus sectors will experience sectoral innovation: Targeted financial support will encourage innovation.
  • Liquidity and working capital will improve: This is crucial for high R&D-driven startups with long gestation periods.

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Deep Tech Fund of Funds

"We will also explore a Deep Tech Fund of Funds to catalyze the next generation of startups."

Likely Impact:

• • We will encourage disruptive innovation: This fund will support visionary technologies with large-scale socio-economic impact.
  • We will provide patient capital: Catering to long-gestation, high-risk deep-tech startups.
  • The initiative will attract new investors: Future-focused investors will enter the ecosystem.
  • We will fund larger ticket sizes: Supporting intensive R&D and commercialization efforts.

Extension of Section 80-IAC Benefits For Startups 

"We will extend the incorporation period for startups to avail tax benefits by 5 years, until 1.4.2030."

Likely Impact:

• • Startups will have greater liquidity and cash availability.
  • Policy certainty will allow for long-term planning.
  • Startups will attract high-skilled talent and expedite product development cycles.

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Toys: Making India a Global Manufacturing Hub

"We will develop new schemes to create clusters, skills, and a manufacturing ecosystem for high-quality, innovative, and sustainable Indian toys."

Likely Impact:

• • We have achieved a 37% decline in toy imports and a 227% increase in toy exports over the past decade.
  • MSMEs, SHGs, and artisans will receive a boost, creating employment.
  • We will enhance India's competitiveness in global toy markets.
  • We will reduce import dependence, promoting self-reliant toy manufacturing.

PM Gati Shakti & National Geospatial Mission

"We will make PM Gati Shakti portal’s data accessible to the private sector."

Likely Impact:

• • We will optimize logistics and last-mile delivery solutions.
  • We will modernize land records and urban planning through geospatial data integration.
  • We will improve infrastructure project efficiency, reducing litigation risks.

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Footwear & Leather Industry Focus Product Scheme

"We will introduce a scheme to enhance the productivity, quality, and competitiveness of India's footwear and leather sector."

Likely Impact:

• • We aim for a Rs. 4 lakh crore turnover, including Rs. 1.1 lakh crore exports.
  • We will generate employment for 22 lakh people.
  • We will focus on non-leather footwear manufacturing to reduce import dependence.
  • We will encourage sustainable and innovative design capacities.

Ease of Doing Business & Regulatory Reforms

"We will form a High-Level Committee to review non-financial regulations and enhance the ease of doing business."

Likely Impact:

• • We will simplify compliance and inspections to strengthen economic governance.
  • State-level competitiveness will increase through the Investment Friendliness Index.
  • The Jan Vishwas Bill 2.0 will decriminalize over 100 legal provisions.

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Manufacturing & Clean Tech Mission

"We will support small, medium, and large industries through a National Manufacturing Mission."

Likely Impact:

• • We will boost Make in India & Clean Tech sectors, focusing on EV batteries, solar PV cells, and wind turbines.
  • We will strengthen MSMEs by integrating them into global value chains.
  • We will build a future-ready workforce for in-demand job sectors.

Budget 2025: Paving the Way for a $5 Trillion Economy

The Union Budget 2025-26 brings a pro-business, innovation-driven approach. Startups, manufacturing, and infrastructure will benefit from targeted fiscal measures. With strategic funding, regulatory simplifications, and sectoral focus, the government aims to drive India towards a $5 trillion economy while promoting self-reliance, employment generation, and global competitiveness.