The Indian government has cleared a corpus of INR 100 bn (USD 1.1 bn) under a fund of funds to mobilize venture capital for India’s startup ecosystem, according to the Press Information Bureau. This is the second iteration of the Startup India initiative, which catalyzed investments from Gulf SWFs, including QIA, Adia, and PIF.

A successful predecessor: The earlier fund of funds launched in 2016 invested over INR 255 bn (USD 2.81 bn) in more than 1.3k startups through 145 alternative investment funds.

Startup India 2.0 will take a more targeted approach, focusing on deep tech, tech-led manufacturing, and early-growth startups, while expanding funding beyond major metros into smaller cities. The fund is designed to address the high-risk capital gap and strengthen smaller domestic venture funds.

Why this matters: State-backed capital provides a safety net for high-risk, long-gestation sectors. As the UAE and Saudi Arabia push to become global hubs for AI and advanced manufacturing, this creates a pipeline of de-risked joint investment windows in hardware and AI for MENA investors.

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