India has unveiled a Rs 100 billion ($1.6 billion) fund to support startups, as part of its Budget 2014 that was just presented (spotted by Tech in Asia).
The Budget highlights state that the fund will primarily be used to provide “equity through venture capital funds, quasi-equity, soft loans and other risk capital specially to encourage new startups by youth to be set up.” Details are still murky at this point in time though, and it isn’t clear how the government will disburse the fund.
The news comes as the tech startup scene in India is starting to heat up. Bangalore is already dubbed the ‘Silicon Valley of India’ and now Pune is also attracting a pool of startups and fresh IT talent, including award-winning data software company Druva and telecommunications hardware firm Swipe.
TechHub, a community of tech entrepreneurs and startup spaces that started in London before moving to other UK and European cities, recently announced that it will be opening its first hub in India, as it seeks to gain access to the country’s “predicted $100 billion technology industry.”
Late last year, Facebook made its very first acquisition in India, purchasing Little Eye Labs, a Bangalore-based company that produces a mobile app crash testing service, for an estimated $10-$15 million.
All these are proof points for startup advocates in the country, such as GSF India founder Rajesh Sawhney, who told TNW he believes that India can provide world-class technology and services. In 2012, GSF India teamed up with 500 Startups in the US and Seedcamp in Europe to launch an accelerator program to identify India’s top startups.
The government’s new fund adds on to that. It comes as a boost for the Indian startup scene and those that have already taken steps to participate in it, and will also inject confidence in potential investors who see that the government is committed to nurturing startups in the country.
Headline image via Shutterstock
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