SISF vs NIDHI-PRAYAS: Which Seed Grant Fits You?

Building a physical, science- or technology-based product and still at the idea or early prototype stage? NIDHI-PRAYAS is the closer fit, and you can apply even before you form a company. A DPIIT-recognised startup under two years old with a software or tech-enabled product, or one that needs money for market entry, fits the Startup India Seed Fund Scheme (SISF) better. But SISF has stopped taking new startup applications, so for now NIDHI-PRAYAS is the only one of the two worth planning around.

This comparison is based on official guidelines as of October 2026; always check the scheme portals for the latest rules.

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SISF vs NIDHI-PRAYAS at a glance

	Startup India Seed Fund Scheme (SISF)	NIDHI-PRAYAS 2.0
Run by	DPIIT, Ministry of Commerce and Industry	Department of Science and Technology (DST), with SINE, IIT Bombay as the Program Management Unit
Paid out through	Approved incubators	PRAYAS Centres (PCs) and Advance PRAYAS Centres (APCs) set up in selected incubators
What it funds	Proof of concept, prototype development and product trials (grant); market entry, commercialisation and scale-up (debt)	Turning an idea into a working physical prototype, advanced prototype or MVP
Maximum amount	Grant up to Rs 20 lakh; convertible debentures, debt or debt-linked instruments up to Rs 50 lakh	Up to Rs 20 lakh at a PC; up to Rs 40 lakh at an APC (deep tech)
Form	Grant and/or debt	Grant
Who can apply	DPIIT-recognised startups incorporated not more than 2 years ago	Individual innovators without a startup, or startups incorporated in India not more than 5 years ago
Software-only products	Allowed if technology is core to the product, service or model	Not supported (pure software, apps, e-commerce and service solutions are excluded)
Status	Startup applications closed on 31 May 2026	New version (2.0) published in March 2026; centre selection call ran 19 May to 30 June 2026

Who runs each scheme

SISF is run by the Department for Promotion of Industry and Internal Trade (DPIIT). The SISF guidelines say the money is disbursed to startups through eligible incubators across India, and an Experts Advisory Committee oversees it. A PIB release of 26 July 2024 says Rs 945 crore was sanctioned for the scheme for four years starting 2021-22.

NIDHI-PRAYAS sits under DST's National Initiative for Developing and Harnessing Innovations (NIDHI). The DST NIDHI-PRAYAS 2.0 page says DST implements it, with the Society for Innovation and Entrepreneurship (SINE), IIT Bombay as the Program Management Unit. The NIDHI-PRAYAS 2.0 Program Guidelines (March 2026) describe it as a pre-incubation programme that funds prototypes before formal incubation.

What stage each one is for

SISF covers a wider stretch of the journey. Its stated aim is to fund "proof of concept, prototype development, product trials, market entry and commercialization", so a startup can graduate to angel, VC or bank funding. The grant is for validating proof of concept, prototype development or product trials. The debt is for market entry, commercialisation or scaling up.

NIDHI-PRAYAS is narrower and earlier. The 2.0 guidelines call it a "Proof-of-concept grant" for turning ideas and innovations into a prototype, advanced prototype or MVP. Two limits matter:

The prototype must be a tangible, physical product based on science or technology, and buildable and testable within 15 months of the first tranche.
Products that have already crossed MVP level can't apply.

The guidelines also exclude pure software, e-commerce, service and app-based solutions, so a SaaS product won't qualify.

How much you can get, and in what form

SISF (from the guidelines):

Grant of up to Rs 20 lakh, paid in milestone-based instalments.
Up to Rs 50 lakh through convertible debentures, debt or debt-linked instruments.
Debt carries interest of no more than the prevailing repo rate, a tenure of no more than 60 months and a moratorium of up to 12 months. It is unsecured, with no promoter or third-party guarantee.
A startup can receive each type of support only once.

NIDHI-PRAYAS 2.0 (from the 2.0 guidelines):

Up to Rs 20 lakh per innovator or startup at a PRAYAS Centre.
Up to Rs 40 lakh at an Advance PRAYAS Centre, for deep-tech ideas or advanced prototypes.
Total NIDHI-PRAYAS support for one innovation is capped at Rs 40 lakh, including anything received under PRAYAS 1.0. The original NIDHI-PRAYAS offered up to Rs 10 lakh, according to the DST NIDHI-PRAYAS page.
The project term is 15 months. The centre's local committee can extend it by up to 6 months.
If you work full-time on the project with no other income, the committee may approve a sustenance allowance of up to 20% of your grant. It isn't guaranteed.
The incubator can't demand equity or IP in return for the grant. IP stays with you unless you agree otherwise in a separate contract.
If a project is left incomplete, you must return the unused grant.

Who can apply

SISF requires all of these:

DPIIT recognition, and incorporation not more than 2 years before you apply.
Technology used in your core product or service, business model, distribution model or methodology.
No more than Rs 10 lakh of monetary support already received under another Central or State Government scheme. Prize money, subsidised workspace, a founder monthly allowance and access to labs or prototyping facilities don't count.
At least 51% shareholding by Indian promoters.

If you aren't recognised yet, see our guide to DPIIT startup recognition.

NIDHI-PRAYAS 2.0 accepts:

An individual innovator who doesn't have a registered startup yet. You're encouraged to incorporate as a DPIIT-registered startup within 6 to 8 months of getting support.
An early-stage startup incorporated in India not more than 5 years ago, with at least 51% equity held by Indian citizens and turnover of no more than Rs 1 crore in any financial year.

Applicants must also:

be at least 18 years old and an Indian citizen
own, or hold a licence to use, the IP behind the prototype
submit an NOC from their employer or institution if employed or a full-time student at an academic or R&D institution
not take NIDHI-EIR support for the same or a similar idea

You're not eligible if you've already received more than Rs 40 lakh in grants from government schemes. The guidelines say an innovator or startup can use NIDHI-PRAYAS 2.0 only once, with one route up: if you're funded at a PC, you can later apply at an APC for the balance (up to Rs 40 lakh minus what the PC gave you). If you were funded under PRAYAS 1.0, you can apply under 2.0 only at an APC.

How you apply

SISF: you applied online on the Seed Fund portal and could choose up to three incubators in order of preference. Each incubator's committee evaluated and selected startups. Our SISF application guide walks through the form.

NIDHI-PRAYAS: the 2.0 guidelines say you apply to a designated PRAYAS Centre or Advance PRAYAS Centre using a common application template on the NIDHI-PRAYAS portal. Each centre's PRAYAS Local Monitoring Committee makes the final decision. Pick the right level from the start. Once you've received funding from an APC, of any amount, you can't get a PRAYAS 2.0 grant from a PC, as both the guidelines and the PMU's innovators page say. If an APC turns your proposal down, the guidelines say a later application to a PC may be considered, subject to that PC committee's own assessment.

Current status

SISF is closed to new startups. The Seed Fund portal shows a "Final Notice (Extended)": the last date for startups to apply was 31 May 2026, and incubators had to finish selecting startups by 30 June 2026. We didn't find any official notice of a new call. See our SISF listing for the scheme summary.

NIDHI-PRAYAS is moving to version 2.0. DST published the 2.0 guidelines in March 2026. The NIDHI-PRAYAS PMU website invited incubators, not innovators, to apply as PRAYAS Centres between 19 May and 30 June 2026. Check the PMU website's list of centres for open calls before you prepare an application.

Which one should you choose?

Pick NIDHI-PRAYAS if:

you're building a physical product grounded in science or engineering
you have an idea or early prototype, but haven't reached MVP
you haven't incorporated yet, or your startup is under 5 years old with turnover of no more than Rs 1 crore
your idea is deep tech and needs more than Rs 20 lakh to prototype (apply to an APC)

Pick SISF (when it reopens) if:

you're DPIIT-recognised and under 2 years old
your product is software or tech-enabled, which NIDHI-PRAYAS excludes
you need money for market entry or scaling, which only SISF's debt covers

Neither fits? Browse open schemes or find an incubator that runs its own programmes.

Can you get both?

Neither set of guidelines bans holding both, but the eligibility rules make it hard:

SISF after PRAYAS: the SISF guidelines say a startup "should not have received more than Rs 10 lakh of monetary support under any other Central or State Government scheme". The only exclusions they list are prize money from competitions and grand challenges, subsidised working space, a founder monthly allowance, and access to labs or prototyping facilities. A PRAYAS grant isn't on that list. Our reading, not an official ruling: a PRAYAS grant above Rs 10 lakh would likely put you over SISF's limit. Neither scheme's guidelines address this case directly, so confirm with the incubator. You'd also have to be within 2 years of incorporation.
PRAYAS after SISF: PRAYAS 2.0 excludes anyone who has received more than Rs 40 lakh in government grants, and you must declare all prior government and private funding. An SISF grant (up to Rs 20 lakh) doesn't break that limit by itself. However, your product must not have crossed MVP level, and SISF-funded startups often have.

FAQ

Is NIDHI-PRAYAS a loan or a grant?

It's a grant. The 2.0 guidelines call it a proof-of-concept grant for prototyping. You only return the unused amount if the project is left incomplete.

Can I apply to NIDHI-PRAYAS without a company?

Yes. An individual innovator without a registered startup can apply. If you work in a team, the team agrees on a lead innovator, and the funds go to that person's account.

Can a software startup get NIDHI-PRAYAS?

No. The guidelines exclude pure software development, e-commerce, service solutions and app-based solutions.

Can I still apply for SISF?

Not as a new applicant. The portal says the last date for startup applications was 31 May 2026.

Do incubators take equity for NIDHI-PRAYAS?

Not for the grant. The 2.0 guidelines say the incubator or centre can't take equity in exchange for anything tied to the grant. Any separate deal must state that it's independent of NIDHI-PRAYAS.

Can someone help me prepare a proposal?

Yes. You apply yourself through the centre, but if you want help with your pitch or documents, see our services.

Sources

Cover photo: ThisisEngineering on Unsplash

SISF vs NIDHI-PRAYAS: Which Seed Grant Should Your Startup Apply For?