Grant Types
A sum of money given to a startup or organisation that does not need to be repaid and does not require giving up equity. Grants are the most attractive form of funding for founders because they are non-dilutive (you keep full ownership) and non-repayable (unlike a loan).
A sum of money given to a startup or organisation that does not need to be repaid and does not require giving up equity. Grants are the most attractive form of funding for founders because they are non-dilutive (you keep full ownership) and non-repayable (unlike a loan). In India, grants are awarded by central and state governments, public-sector bodies, corporations through their CSR budgets, universities, international foundations, and multilateral agencies. They typically fund specific activities — R&D, prototyping, pilot projects, hiring, or go-to-market — and are disbursed either as a lump sum or in milestone-based tranches. The main trade-off is application complexity: government grants in particular require detailed proposals, supporting documents, and compliance reporting.
A grant is a sum of money given to a startup or organisation that does not need to be repaid and does not require giving up equity. Grants are the most attractive form of funding for founders because they are non-dilutive (you retain full ownership) and non-repayable (unlike a loan). In India, grants are awarded by central and state governments, public-sector bodies, corporations through their CSR budgets, universities, international foundations, and multilateral agencies such as the World Bank and UNDP. Grants typically fund specific activities — research and development, prototype creation, pilot projects, hiring specialised talent, or go-to-market execution. They are disbursed either as a lump-sum upfront payment or, more commonly, in milestone-based tranches released upon achievement of agreed deliverables. The main trade-off is application complexity: government grants in particular require detailed project proposals, supporting documents (incorporation certificate, DPIIT registration, financial statements), compliance reports, and utilisation certificates. The competition can be intense — some popular grants receive thousands of applications for a handful of awards. However, because grants do not dilute founders or require repayment, even a single successful grant can meaningfully extend runway and accelerate development.
1. Identify grants that match your startup's stage, sector, and location — use StartupGrantsIndia to filter active programmes. 2. Read the eligibility criteria carefully; most government grants require DPIIT recognition, MSME registration, or both. 3. Prepare a detailed project proposal that addresses the grant's objectives, your methodology, expected outcomes, and budget breakdown. 4. Gather supporting documents: incorporation certificate, DPIIT certificate, PAN card, financial statements, founder KYC, and a pitch deck or detailed project report. 5. Submit before the deadline — late submissions are almost never accepted. 6. If shortlisted, you may be called for a presentation or interview before the final award. 7. Post-award, comply with reporting requirements: milestone reports, utilisation certificates, and audited statements are typically mandatory.
A deep-tech startup working on low-cost water purification technology for rural India applies for a BIRAC Biotechnology Ignition Grant (BIG). The startup is DPIIT-recognised and incubated at an IIT-affiliated incubator. It submits a 30-page project proposal detailing the technology, the health impact of contaminated water in target villages, a six-month development timeline, and a ₹25 lakh budget for consumables, equipment, and a research associate's salary. After three months of evaluation, including a presentation to a scientific review committee, the startup is awarded the grant. Funds are released in three tranches: 40% upfront, 30% upon prototype completion, and 30% upon field-testing results and submission of a utilisation certificate.
Grants are the closest thing to "free money" in startup funding — no dilution, no repayment. The cost is in application effort and compliance reporting. A disciplined grants strategy, applying to multiple programmes in parallel, can yield significant non-dilutive capital for your startup.
A sum of money given to a startup or organisation that does not need to be repaid and does not require giving up equity. Grants are the most attractive form of funding for founders because they are non-dilutive (you keep full ownership) and non-repayable (unlike a loan).
A grant is a sum of money given to a startup or organisation that does not need to be repaid and does not require giving up equity. Grants are the most attractive form of funding for founders because they are non-dilutive (you retain full ownership) and non-repayable (unlike a loan). In India, grants are awarded by central and state governments, public-sector bodies, corporations through their CSR budgets, universities, international foundations, and multilateral agencies such as the World Bank and UNDP. Grants typically fund specific activities — research and development, prototype creation, pilot projects, hiring specialised talent, or go-to-market execution. They are disbursed either as a lump-sum upfront payment or, more commonly, in milestone-based tranches released upon achievement of agreed deliverables. The main trade-off is application complexity: government grants in particular require detailed project proposals, supporting documents (incorporation certificate, DPIIT registration, financial statements), compliance reports, and utilisation certificates. The competition can be intense — some popular grants receive thousands of applications for a handful of awards. However, because grants do not dilute founders or require repayment, even a single successful grant can meaningfully extend runway and accelerate development.
1. Identify grants that match your startup's stage, sector, and location — use StartupGrantsIndia to filter active programmes. 2. Read the eligibility criteria carefully; most government grants require DPIIT recognition, MSME registration, or both. 3. Prepare a detailed project proposal that addresses the grant's objectives, your methodology, expected outcomes, and budget breakdown. 4. Gather supporting documents: incorporation certificate, DPIIT certificate, PAN card, financial statements, founder KYC, and a pitch deck or detailed project report. 5. Submit before the deadline — late submissions are almost never accepted. 6. If shortlisted, you may be called for a presentation or interview before the final award. 7. Post-award, comply with reporting requirements: milestone reports, utilisation certificates, and audited statements are typically mandatory.
A deep-tech startup working on low-cost water purification technology for rural India applies for a BIRAC Biotechnology Ignition Grant (BIG). The startup is DPIIT-recognised and incubated at an IIT-affiliated incubator. It submits a 30-page project proposal detailing the technology, the health impact of contaminated water in target villages, a six-month development timeline, and a ₹25 lakh budget for consumables, equipment, and a research associate's salary. After three months of evaluation, including a presentation to a scientific review committee, the startup is awarded the grant. Funds are released in three tranches: 40% upfront, 30% upon prototype completion, and 30% upon field-testing results and submission of a utilisation certificate.
Any form of funding that does not require the founder to give up equity or ownership in the company. Grants, government subsidies, innovation vouchers, prize money from competitions and hackathons, and some types of debt (like revenue-based financing) are non-dilutive. For Indian founders at the early stage, non-dilutive funding is especially valuable because it builds traction and credibility without diluting the cap table before a priced round. The Startup India ecosystem has expanded non-dilutive options significantly through schemes like SISFS (seed fund), BIRAC BIG (biotech grants), and various state startup policies that offer grants-in-aid.
Corporate Social Responsibility funds — a portion of profits that Indian companies above certain revenue and profitability thresholds are legally required to spend on social impact under Section 135 of the Companies Act, 2013. Many corporates run grant programmes that fund startups working in education, healthcare, sanitation, environmental sustainability, rural development, and skill building. CSR grants are typically faster and less bureaucratic than government grants, with decision timelines of 4–8 weeks, but they favour startups with clear social impact metrics. The Indian CSR market exceeds ₹25,000 crore annually, making it a substantial funding pool for impact-driven founders.
A funding structure in which grant money is released in tranches as the startup achieves predefined milestones rather than as a single upfront payment. A typical government grant might disburse 30% at signing, 40% on completion of a prototype or pilot, and the final 30% on submission of a utilisation certificate and final report. This structure protects the grant provider from funding projects that stall, and it helps startups plan their spending in phases. It also means founders must carefully track deliverables, timelines, and reporting requirements — missing a milestone can delay or cancel the next tranche. Most DST, BIRAC, and MeitY grants use milestone-based disbursement.
One portion or instalment of a larger funding amount that is disbursed in stages subject to the achievement of specific conditions or milestones. Government grants in India are commonly structured in 2–4 tranches over the programme period — for example, 25% upfront for equipment and materials, 50% against a mid-term progress report, and 25% on final project completion. Each tranche release typically requires submission of a utilisation certificate, expense statement, and technical progress report. The term comes from finance (French for 'slice') and applies equally to grant funding and debt financing.