Government Schemes★ Must Know

DPIIT Issues Guidelines for ₹10,000 Crore Startup India Fund of Funds 2.0

By TestNeeti Editorial TeamPublished Tuesday, 7 July 2026 2 min readSource: CA - Industry SchemesArticle 9 of 21

The Department for Promotion of Industry and Internal Trade (DPIIT) has issued operational guidelines for the ₹10,000 crore Startup India Fund of Funds 2.0. The guidelines lay down a structured framework to operationalise the corpus through clearly defined mechanisms for fund deployment, governance, and monitoring, aimed at improving the efficiency of capital flows into India's startup ecosystem. The Ministry of Commerce and Industry said the scheme will be implemented through commitments to SEBI-registered Category I and II Alternative Investment Funds (AIFs), which will invest in DPIIT-recognised startups. The Small Industries Development Bank of India (SIDBI) will act as the initial implementation agency, executing through a structured AIF selection and monitoring process. The Startup India FoF 2.0 is expected to enhance the depth and quality of domestic venture capital, support innovation-driven enterprises, and strengthen India's position as a leading global startup hub.

Key Facts & Details

11 points

1
DPIIT has issued operational guidelines for the ₹10,000 crore Startup India Fund of Funds 2.0.
2
The guidelines set a structured framework for fund deployment, governance, and monitoring to improve capital flows into the startup ecosystem.
3
The scheme will be implemented through commitments to SEBI-registered Category I and II Alternative Investment Funds (AIFs).
4
These AIFs will in turn invest in DPIIT-recognised startups.
5
The Small Industries Development Bank of India (SIDBI) will act as the initial implementation agency.
6
SIDBI will execute the scheme through a structured AIF selection and monitoring process.
7
The Ministry of Commerce and Industry announced the implementation mechanism for the scheme.

Deep Dive

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Startup India FoF 2.0 is expected to significantly enhance the depth and quality of domestic venture capital.
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The scheme aims to support innovation-driven enterprises across India's startup ecosystem.
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It is intended to strengthen India's position as a leading global startup hub.
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As a 'fund of funds', it invests in other funds (AIFs) rather than directly in startups, using them as intermediaries to channel capital.

Exam Focus

Which department issued the guidelines for the ₹10,000 crore Startup India Fund of Funds 2.0, and which agency is its initial implementation agency?

Exam Relevance & Angle

This scheme links DPIIT, the ₹10,000 crore outlay, SIDBI as implementation agency, and the SEBI-registered AIF route — high-value tokens for banking and government-scheme questions. Aspirants must connect the fund's name, its corpus, the ministries and agencies involved, and the fund-of-funds mechanism supporting India's startup ecosystem.

Target Exams

SBI POSBI ClerkIBPS POIBPS ClerkRBI Grade BNABARD Grade ASSC CGLRRB NTPCUPSC CSEState PCS

Background & Context

The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, is the nodal body for the Startup India initiative and for recognising startups. A Fund of Funds does not invest directly in startups; instead it commits capital to other investment funds — here, SEBI-registered Alternative Investment Funds (AIFs) — which then invest in startups, thereby leveraging private capital. Alternative Investment Funds are privately pooled investment vehicles regulated by SEBI, classified into Categories I, II, and III. The Small Industries Development Bank of India (SIDBI) is the principal financial institution for the promotion and financing of the MSME sector and frequently serves as an implementation agency for such government-backed funds, selecting and monitoring the AIFs that ultimately deploy capital to enterprises.