₹20L – ₹50L
DPIIT's Startup India Seed Fund Scheme (SISFS) provides up to ₹20 lakh as a grant for proof of concept and prototype development, plus up to ₹50 lakh as convertible debentures or debt for commercialization — disbursed to DPIIT-recognised startups through empanelled incubators across India.
The Startup India Seed Fund Scheme (SISFS) is the Government of India's flagship programme for getting capital into the hands of startups at the earliest, riskiest stage of their journey — the moment when an idea needs money to become a working prototype, but is still far too early for angel investors, venture capital, or a bank loan.
It is run by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry, and was launched by the Hon'ble Commerce and Industry Minister on 19 April 2021 with a total corpus of ₹945 crore. That corpus is deployed over the life of the scheme through a national network of incubators, which act as the on-the-ground delivery arm.
The problem SISFS solves
Early-stage capital is the single biggest bottleneck for a first-time founder in India. Angel investors and VC firms typically write cheques only after a proof of concept exists. Banks lend against assets and cash flows that an idea-stage startup does not have. This leaves a hard gap precisely at the "make or break" point — when a founder needs a small amount of money to validate the concept, build a prototype, run product trials, or make a first market entry. SISFS exists to fill exactly this gap.
How the money is structured
A selected startup can receive seed support in two distinct forms, each used for a different purpose and each availed only once:
A founder can choose the instrument that fits their stage: a grant suits the ideation and validation stage, while debt or convertible debentures suit the commercialization and scale-up stage. A startup that qualifies can use both over time — up to roughly ₹70 lakh of combined support across the two windows.
How SISFS is delivered — the incubator model
SISFS does not disburse money to startups directly. Instead, DPIIT grants up to ₹5 crore to each selected incubator (in three or more milestone-based installments, plus a 5% management fee), and the incubator in turn evaluates, selects, and funds individual startups. This is a deliberate design choice: incubators bring sector expertise, mentoring, and accountability that a central department cannot provide at scale. It also means the startup's primary relationship throughout the programme is with its host incubator, not with DPIIT.
A founder can apply to up to three incubators simultaneously, in order of preference, which materially improves the odds of being selected.
Who SISFS is built for
SISFS is sector-agnostic and pan-India. It is designed for genuinely early-stage, DPIIT-recognised startups — incorporated not more than two years ago — that have an innovative idea with a real market fit and a credible path to commercialization and scale. There is no requirement to be physically incubated, so founders anywhere in the country can apply. Preference is given to startups solving meaningful problems in areas such as water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, and textiles — but a strong idea in any sector is welcome.
If you have an incorporated startup, a defensible idea, and you are stuck at the point where you need a small amount of non-dilutive (or low-dilution) capital to prove it works, SISFS was built for you.
India has one of the largest startup ecosystems in the world, but for years its weakest link was the very first rung of the funding ladder. The Indian startup ecosystem suffers from capital inadequacy at the seed and proof-of-concept stage — the point where an idea needs a small amount of money to be tested, but where almost no formal capital is available. Angel and venture funding arrive only after a concept is proven; bank credit requires collateral that idea-stage founders do not have.
DPIIT created SISFS to break this logjam. By routing a ₹945 crore corpus through a vetted national network of incubators, the scheme puts validation-stage capital within reach of founders across the country — including in cities and towns far from the traditional investor hubs of Bengaluru, Delhi, and Mumbai. The intent is explicitly developmental: to help a startup graduate to a level where it can raise from angels or VCs, or borrow from commercial banks, on its own strength. SISFS is the bridge that gets a founder from a slide deck to a fundable company.
To apply as a startup under SISFS, you must meet all of the following criteria:
Important conditions:
Preference is given to startups creating innovative solutions in sectors such as water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, and textiles — but the scheme is sector-agnostic and strong applicants from any sector are considered.
SISFS provides seed funding to a selected startup in two forms, disbursed through the host incubator:
A startup that qualifies can access both windows over time (each instrument once), for combined support of up to roughly ₹70 lakh.
Beyond the money, selection brings real non-financial value:
What the fund cannot be used for: seed funding must be used strictly for the purpose granted (PoC, prototyping, trials, market entry, commercialization, scaling). It must not be diverted to create physical facilities or for unrelated expenses.
SISFS runs year-round calls for applications, so there is no single annual deadline for startups — you apply through the online portal whenever you are ready, and applications are evaluated on a rolling basis by the incubators.
Step-by-step:
After submission, the incubators you applied to evaluate your application and shortlist startups for their seed management committee's review. For grants, the first installment to a selected startup is released not more than 60 days from receipt of the startup's application.
Startups are evaluated and selected by the incubators they apply to, not directly by DPIIT. Each empanelled incubator runs a seed management committee that reviews applications and decides which startups to fund and how much to award.
Selection typically weighs:
Because you can apply to up to three incubators, if your first-preference incubator does not select you, a lower-preference incubator may. The startup signs a legal agreement with the incubator that ultimately funds it. Applicants can discuss the quantum of seed fund and the associated milestones with the incubator before the agreement is finalised.
SISFS operates through a three-tier structure:
For startups, the practical implication is that your relationship is with the incubator, which handles your selection, your agreement, your disbursements, and your milestone reporting. Of the total grant an incubator receives, not more than 20% may be passed on to startups as grants — the remainder flows as debt or convertible debentures — which shapes how incubators allocate across their startup cohort.
Incubators that are operational for at least two to three years, with seating for at least 25 people and at least five startups already incubating, are eligible to join as delivery partners. This is why the scheme is sometimes described in two halves: a call for incubators, and a separate, continuous call for startups.
Once your application is approved by an incubator, several things follow:
The negotiation of the exact quantum and milestones happens with the incubator before the agreement is signed, so you have a window to align the funding plan with your real development roadmap.
SISFS is a DPIIT scheme that provides financial assistance to early-stage startups for proof of concept, prototype development, product trials, market entry, and commercialization. It was launched on 19 April 2021 with a ₹945 crore corpus, and the funds are disbursed to selected startups through a national network of empanelled incubators.
A selected startup can receive up to ₹20 lakh as a grant for proof of concept, prototype development, or product trials (released in milestone-based installments), and up to ₹50 lakh as investment for market entry, commercialization, or scaling up through convertible debentures, debt, or debt-linked instruments. Each instrument can be availed once, so combined support can reach roughly ₹70 lakh.
No. The ₹5 crore is the grant DPIIT provides to a selected incubator, which the incubator then uses to fund multiple startups. An individual startup receives up to ₹20 lakh as a grant and up to ₹50 lakh as debt or convertible debentures — not ₹5 crore.
A DPIIT-recognised startup incorporated not more than 2 years ago, with an innovative idea that has market fit and scope for commercialization and scaling, technology at its core, and at least 51% Indian promoter shareholding. The startup must not have received more than ₹10 lakh of monetary support under any other Central or State government scheme.
No. Individual entrepreneurs are not eligible. You must apply as an incorporated startup (a registered company), not as a single individual.
SISFS runs year-round calls for startups, so there is no single annual deadline. You apply on the Seed Fund portal (seedfund.startupindia.gov.in) using your Startup India credentials, after obtaining DPIIT recognition. Applications are evaluated on a rolling basis — check the portal for the current cycle's cutoff.
Yes. A startup can apply to up to three incubators simultaneously, ranked in order of preference. If your first-preference incubator does not select you, a lower-preference one may, which improves your overall chances.
The incubators select the startups. Each empanelled incubator runs a seed management committee that evaluates applications on the idea, market fit, problem significance, team, feasibility, and scalability, and decides which startups to fund and how much to award. DPIIT funds the incubators; the incubators fund the startups.
A grant can be used for validation of proof of concept, prototype development, or product trials. Debt or convertible debentures can be used for market entry, commercialization, or scaling up. The funds must be used strictly for the sanctioned purpose and cannot be diverted to create physical facilities or for unrelated expenses.
For grants, the first installment to a selected startup is released no more than 60 days from receipt of the startup's application. Disbursement is milestone-based, so each subsequent tranche is released after you submit progress updates and utilisation certificates showing the previous milestone was met.