6 Useful Government Instituted Funds & Grants for Technology Startups in India
Technology entrepreneurs in India regularly find themselves staring at a lot of challenges while developing mass (or sometimes even niche) market solutions. Getting hold of the right idea to pursue, the opportune time to bring the idea to the market and putting together the right team for turning the idea into reality can drive any entrepreneur to a point of insanity. Add to it the need to find funds just to create a prototype of the product, let alone commercialize it.
Some of the funding sources available to startups are angels, friends and family and venture capital funds apart from the option of using their own money. But entrepreneurs tend to overlook government funding schemes and grants, especially during early-stage, when their requirement is small and not many private investors are willing to back a yet-to-be-proven idea.
There are several funds instituted by central government and various state governments, to foster research and development among startups and SMEs in India. These funds help technology entrepreneurs/startups to take their products from early-stage to full scale commercialization.
Let us take a look at some of the government instituted funds for technology startups. At the time of writing this article, some of the funds/grants are fully invested or the programs have been discontinued by respective government departments. They have still been included here since such programmes can always be restarted/reinstated.
Department of Science & Technology, under the aegis of Ministry of Science & Technology, Govt. of India launched Instrumentation Development Programme (IDP) for promoting research and development in the field of instrumentation. Instrumentation has far-reaching impact on various sectors such as education, scientific research, commercial industries, agriculture, healthcare etc.
Objectives of the programme:
- Indigenous development and production of instruments,
- Continuous updating of the technology of instruments to keep pace with technology improvements taking place globally, and
- Innovations in the area of instrumentation.
(Source: Department of Science & Technology)
National Innovation Foundation (NIF) was setup as an autonomous body of the Department of Science & Technology, GOI in March 2000. The foundation helps grassroot innovators and outstanding traditional knowledge holders in getting due recognition, respect and reward for their innovations. It also ensures that such innovations become available to the masses through commercial/non-commercial channels. This helps in bringing material or non-material incentives for the innovators and others involved in the value chain.
NIF has recognised the significance of financing in the early stages of an entrepreneurial journey. When financing is provided at an early stage to the innovator, time to market the given product could be considerably reduced.
NIF aims to achieve this through Micro Venture Innovation Fund (MVIF), a dedicated risk fund, established by NIF and supported by Small Industries Development Bank of India (SIDBI).
NIF also understands that some technologies may have no commercial potential but may be beneficial to the marginalized sections of the society. To encourage such innovations, it has setup Grassroots Technological Innovation Acquisition Fund (GITAF). Through GITAF, NIF acquires the rights of such technologies and then licenses at low or no cost to small entrepreneurs. Any commercial gains made from licensing such technologies are shared with the original innovators from whom the rights were acquired initially.
To promote research and development of indigenous technologies in the field of biotechnology, Dept. of Biotechnology (under Ministry of Science & Technology, GOI) launched this scheme to boost the public-private partnership in this field. SIBRI supports high risk, pre-Proof of Concept (PoC) research as well as late stage development in SMEs lead by qualified teams and individuals. The scheme primarily focusses on developing products and solutions in medical, agriculture, food and environment.
Objectives of the scheme:
- to provide support for early stage, pre-proof-of-concept research in biotechnology by industry,
- to support late stage development and commercialisation of new indigenous technologies particularly those related to societal needs in the healthcare, food and nutrition, agriculture and other sectors,
- to nurture and mentor innovative and emerging technologies/entrepreneurs, to assist new enterprises to forge appropriate linkages with academia and government.
- Solely by registered organisations
- Jointly by organisations, National R&D organisations and institutions
- Collaboratively by a group of stakeholders
(Source: Department of Biotechnology)
Established a few years after India gained independence, National Research Development Corporation (NRDC) helps to promote, develop and commercialize the technologies / know-how / inventions / patents / processes emanating from various national R&D institutions / Universities. It works under Department of Science & Technology, Ministry of Science & Technology, GOI.
It promotes inventions in Agriculture, Agro-based processing, Chemicals, Bio-Technology, Metallurgy, Electoronics & Instrumentation, Building Materials etc. Over the years, NRDC has helped numerous SMEs.
It provides tax-free cash awards to scientific, technical persons, industrial workers, technicians, artisans, craftsman and students in order to recognize the creative talent which could be harnessed to benefit the Nation.
The awards are given in the following three categories:
- NRDC Innovation Award of the Year
- NRDC Societal Innovation Award of the Year
- NRDC Budding Innovators Award of the Year (only for students)
(Source: National Research Development Corporation)
Established by DeitY as an academia-industry partnership programme to foster collaborative R&D between industry and academic/R&D institutions for development of products and packages.
Under the scheme, if industry supports R&D for development of products that can be commercialized at institution level, then government will also provide financial support that is up to twice the amount provided by industry.
The proposals for getting financial support under the scheme are to be submitted jointly by the industry and institutions. At the time of writing this article, the scheme was valid till March 31, 2017. The scheme may get extended in future.
The major objectives of the scheme are:
- Establish, nurture and strengthen the linkages between the Industry and Institutes;
- To promote industry oriented R&D at institutes;
- Encourage and accelerate development of indigenous products and packages; and
- Bridge the gap between R&D / Proof-of-concept and commercialization /globalization.
Established in Karnataka in 1999, Karnataka Information Technology Venture Capital Fund (KITVEN Fund) is a State & Central Government financial institutions backed Venture Capital Fund (VCF). KITVEN invests in emerging technology companies with a long-term investment approach. According to the fund’s website, it has been a seed investor in many technology companies.
The primary objective of KITVEN is to make available long-term funds to unlisted companies in the Information Technology, Biotechnology, Nano-technology, Semiconductor, ESDM and other industries like agro processing, automobile components, aerospace engineering, clean energy, production of patented products and such other sectors to :
Objectives of the fund are:
- Develop competitive products and cutting-edge technology
- Manufacture and commercialize the product development
- Move up in the value chain
- Expand & upgrade existing capabilities to cater to a wider clientele
- Growth and expansion of an established company including product diversification and forward / backward integration
- Turnaround financing
While the fund predominantly invests in SMEs & Startup units in the State of Karnataka, it may be open to investing in startups in other states as well.
- Also read 19 Ways To Fund Your Startup In India
Disclaimer: All the information has been sourced from the websites of the respective fund/grant/scheme. Please verify the information independently from such websites. StartupAsh takes no responsibility for the correctness of the information stated above.