Government Grants for Startups & Small Businesses

Applying for Government Grants: Funding Support for MSMEs and Start-ups

Government grants are designed to fuel innovation, generate employment and drive meaningful economic changes-special for entrepreneurs who solve challenges in the real world. At Vakilsearch, we help startups and MSMEs tap into this opportunity. From identifying the most relevant schemes to preparing winning applications, our experts guide you at every step—maximising your chances of success. With a strong merit list and deep domain skills, Vakilsearch is your strategic partner to strengthen long-term development of an agreement.

What is a Government Grant?

A government grant is non-repayable financial assistance provided by the government to individuals, startups, or businesses for specific purposes like innovation, research, or development. Unlike a loan, it does not require a refund or interest. And unlike a grant, which gives the cost over time (e.g. tax cuts or low prices), a grant provides direct capital - no repayment, no equity weakening. It is designed to support the initiatives that are in line with national or regional development goals.

Purpose of Government Grants

The purpose of government grants is to provide strategic, non-repayable funding that supports national priorities and fosters business development—especially in the startup ecosystem. Here's why government offers grants to startups and small businesses:

• Empowering Small Businesses & Startups

  Enable early-stage growth by providing the capital needed to launch, scale, or validate business models without relying on debt or equity.

• Driving Economic Growth & Employment

  Boost job creation and regional development by supporting ventures that generate local employment and stimulate economic activity.

• Advancing Innovation & Research

  Support cutting-edge solutions through R&D grants that encourage the development of new technologies, products, or processes.

• Promoting Sustainability & Energy Efficiency

  Encourage green practices by funding projects that reduce carbon emissions, adopt renewable energy, or promote environmental conservation.

• Providing Disaster Relief & Housing Support

  While mainly for individuals, some grants offer temporary support to small businesses affected by natural disasters or housing-related disruptions.

Government Grants for Small Businesses

These grants help existing small businesses to boost the infrastructure, invest in new technology or expand new markets. Popular schemes include MSME-credit-connected capital supplementary scheme and upgrading funds for technology.

Government Grants for New Businesses

Designed to reduce the barriers to entry, these grants fund product development, prototyping, and pilot testing. Startup India Seed Fund Scheme (SISFS) is a key example for new ventures.

Government Business Grants (e.g., under MSME/Startup India)

These are sector-specific or innovative-centered grants that support production, stability or digital changes. They often have inputs of mentoring and incubation support.

Government Grants for Homeowners

While not applicable to businesses, these grants offer relief to individuals for disaster damage repair or housing improvements. These are not designed for commercial use.

Benefits of Government Grants

The benefits of government grants go beyond funding—they provide strategic support to help startups and small businesses scale with confidence. Here are the key advantages of grant funding:

• No Repayment Obligations

  Grants offer debt-free capital, allowing you to invest in growth without worrying about interest, EMIs, or future liabilities.

• Encourages Innovation and Growth

  By reducing financial risk, grants empower startups to experiment, build prototypes, and enter new markets with confidence.

• Community & Job Development

  Grants often incentivise businesses that create local employment and contribute to regional development, multiplying their social impact.

• Better Living Conditions

  Support for green energy, smart infrastructure, and accessibility projects leads to improved quality of life for communities at large.

Popular Government Grant Schemes in India

Recognised startups under DPIIT Enjoy benefits such as easy compliance, tax training and streamlined access to financing support. Programs such as MEITY Startup Hub and Multicycler Grant Scheme are specially designed to promote technology innovation in electronics, information technology and new technologies. These initiatives also provide access to startups to mentorship, venture capital networks and incubation support, which associate them with resources that go beyond capital alone. In particular, India offers a number of state subsidy schemes designed to support start -ups in their early stages - introducing them to products, scale operations and entry into markets. The most prominent here are:

• Startup India Seed Fund Scheme (SISFS)

  • Grant Amount: Up to ₹20 lakhs for validation; up to ₹50 lakhs for product commercialisation
  • Eligibility: DPIIT-recognised startups less than 2 years old; must not have received prior institutional funding
  • Purpose: To support proof of concept, product development, market entry, and commercialisation

• Multiplier Grant Scheme (MGS)

  • Grant Amount: Up to ₹2 crores per project (government provides up to twice the industry contribution)
  • Eligibility: Industry collaboration with academic/R&D institutions; tech-focused startups encouraged
  • Purpose: To promote collaborative R&D between industry and public-funded institutions for commercialization of innovations

• Biotechnology Ignition Grant (BIG)

  • Grant Amount: Up to ₹50 lakhs over 18 months
  • Eligibility: Startups and individuals in biotech/healthcare; must have a business plan and technical proof of concept
  • Purpose: To support high-potential biotech ideas and facilitate their transition from lab to market

State-Specific Startup Grants

Many Indian states offer their own startup incentives:

• Maharashtra – Maharashtra State Innovation Society (MSInS) provides grants up to ₹10 lakh for early-stage startups, with a strong focus on fintech, agritech, healthcare, AI, and IoT sectors.
• Karnataka – The Elevate 100 program offers grants up to ₹50 lakh for innovative startups, along with tax incentives, incubation support, and special schemes for women, rural, and SC/ST entrepreneurs.
• Gujarat – Through Startup Gujarat, the state offers seed funding up to ₹30 lakh, sustenance allowance, patent cost reimbursement, and sectoral subsidies across FinTech, EVs, biotech, and electronics.
• Tamil Nadu – The Startup & Innovation Policy provides seed grants of ₹5–10 lakh, patent subsidies, and incubation support via TANSIM; MSMEs benefit from capital and interest subsidies under state MSME schemes.
• Telangana – Offers robust support via T‑Hub incubation, TS‑iPASS industrial facilitation, T‑Fund & T‑Spark grants, rural impact funding (TSIRI), and sector-specific incentives (bio, agro, women-led).
• Rajasthan – The iStart initiative provides seed grants up to ₹25 lakh, monthly sustenance support, incubation, and direct market access via state programs.
• Uttar Pradesh – The UP Startup Policy offers seed funding (₹10–50 lakh), interest-free/collateral-free loans via CM‑YUVA (with 10% margin money), along with incubation and market access through schemes like ODOP.
• West Bengal – Startup Bengal provides financial aid up to ₹25 lakh, subsidized workspace, mentorship, plus MSME incentives via interest subsidies and ease‑of‑doing‑business portals.
• Kerala – Kerala Startup Mission (KSUM) offers seed / innovation grants (₹10–25 lakh), incubation, FabLabs, and infrastructure support for tech-driven and socially impactful startups.
• Odisha– Under IPR 2022, Odisha offers capital grants up to ₹10 crore, electricity duty waivers, and Startup Odisha gives monthly allowances (~₹20 k; higher for women/SC/ST), incubation support, and IP assistance.
• Jharkhand – The Jharkhand Startup Policy (2021) includes seed capital support up to ₹10 lakh, mentorship, plus tax and electricity exemptions, and capital subsidies via JIIPP.
• Andhra Pradesh – The FinTech Valley Vizag project positions Visakhapatnam as an innovation hub, focusing on fintech, AI, blockchain, and related infrastructure, attracting investment and ecosystem growth.
• Assam, Bihar, Haryana, Himachal Pradesh, Jammu & Kashmir, Goa, Manipur, Nagaland, Puducherry, Punjab, Uttarakhand – All have official startup or innovation policies (e.g., Assam Startup Policy 2017, Bihar Startup Policy 2017, Haryana Entrepreneur & Startup Policy 2017, etc.) offering varying seeds, incubation, and incentive support.
• Haryana (specific note) – Launched a ₹170 crore MSME cluster scheme for building 11 shared infrastructure clusters with grants and plug‑and‑play projects, bolstering industrial and startup ecosystem.
• Delhi – The proposed Delhi Startup Policy 2025 includes a ₹200 crore VC fund, incentives for co-working, patent filing, operational subsidies, and tailored benefits for women and marginalized founders.
• Tamil Nadu (MSME focus) – TN’s MSME Department has supported 66,000 entrepreneurs with ₹5,490 crore in loans and ₹2,133 crore in subsidies under multiple programs (e.g., Annal Ambedkar Entrepreneurship Development, Kalaignar Handicrafts schemes)
  
  These state-level schemes often prioritize local employment, sustainability, and social impact.

Global Grant Opportunities for Indian Startups

Indian startups aren’t limited to domestic funding—many international organisations offer global grants for startups working on high-impact, scalable solutions. If your venture addresses global challenges in health, sustainability, or technology, these grant programs could be a strong fit.

• Gates Foundation: Supports innovations in global health, agriculture, and financial inclusion. Indian startups working on social impact or public health solutions are eligible to apply.
• UNDP (United Nations Development Programme): Offers funding for startups tackling issues like climate change, gender equity, and digital transformation in developing countries, including India.
• Global Impact Grant Program: Aimed at ventures driving large-scale social and environmental impact across borders—especially in sectors like clean tech, education, and public health.
• GSMA Innovation Fund: Funds digital startups expanding mobile connectivity and financial inclusion in low- and middle-income countries, including India.

Understanding the Government Grants Process

Navigating the government grant application process can seem complex, but it's straightforward when broken down into clear steps. Here’s how to get started with any grant process in India:

• Check Eligibility
  Review the scheme's criteria to ensure your startup qualifies based on sector, stage, registration, and other factors.
• Choose the Relevant Scheme
  Identify which grant best aligns with your business goals—be it product development, market entry, or innovation.
• Prepare Required Documents
  Gather key documents such as your pitch deck, financial projections, DPIIT certificate, incorporation details, and proof of concept.
• Submit Application
  Apply online through the official portal or via the designated authority, ensuring all forms are correctly filled out.
• Await Evaluation/Approval
  The application will undergo a review by a grant committee. You may be called for an interview or asked for further documentation.
• Receive Grant Disbursement Upon approval, the funds are released in phases or lump sum, based on the scheme's disbursal structure.

Documents Required to Apply for a Grant

To complete a successful grant application, you'll need to submit a set of documents that prove your eligibility, business viability, and innovation potential. Here’s a handy checklist of grant documents typically required for startups:

• Certificate of Incorporation – Proof your startup is legally registered in India
• DPIIT Recognition Certificate – Mandatory for most Startup India-related grants
• Business Plan or Pitch Deck – Clearly outlines your idea, market fit, and growth roadmap
• Financial Projections – Revenue model, expected cash flow, and 3–5 year forecasts
• Proof of Concept or Prototype – Evidence of innovation through demo, pilot, or MVP
• Founder’s KYC Documents – PAN, Aadhaar, and other ID proofs
• Bank Account Details – Cancelled cheque or bank certificate in the company’s name
• Past Funding Details (if any) – Information on any prior grants or investments received

How Vakilsearch Helps You Secure the Right Grant

Securing a government grant can be overwhelming—but with Vakilsearch 's expert-led grant application support, the process becomes clear, compliant, and startup-friendly. Our team works closely with the founders to identify qualified schemes, prepare the documentation of winning and in time ensuring error -free submissions. We understand the nuances of different financing bodies and provide intense knowledge of the requirements for start -up stages, making us a reliable partner in the success of wealth.

• Here’s how Vakilsearch supports your grant journey:

  • Grant Matching – We shortlist the most relevant government schemes for your business goals
  • Eligibility Check – Ensure you're qualified before you invest time and effort
  • Documentation Support – From pitch decks to financials, we help you prepare everything needed
  • Application Filing – End-to-end handling of the submission process with full compliance
  • Follow-up & Revisions – We assist with clarifications, updates, and review board queries
  • Startup-Focused Expertise – Proven track record supporting early-stage ventures across sectors