Many founders assume funding means pitching investors. In India there is another route: government schemes that give grants, interest-free loans and monthly stipends to early-stage startups. Here is the step-by-step path, with the catches that most reels leave out.
What you need
A registered company. SISFS covers private limited companies, LLPs and partnerships. Sole proprietorships are not eligible.
A startup that is not more than 2 years old at the time you apply (for the central seed fund).
A product idea, prototype or early product, plus a short pitch deck or business plan.
A login on the Startup India portal.
Step by step
Step 1: Get DPIIT recognition. Register your startup on the Startup India portal and apply for DPIIT recognition. For the central seed fund it is mandatory, so nothing else opens without it.
Step 2: Apply to the Startup India Seed Fund Scheme (SISFS). Applications are filed at seedfund.startupindia.gov.in. The scheme has two parts:
Grant of up to Rs 20 lakh, for proof of concept, prototype development or product trials. It is paid in milestone-based instalments and does not have to be repaid.
Up to Rs 50 lakh as convertible debentures or debt, for market entry, commercialisation or scaling up. This part is not a grant.
The money does not come straight from the government. It is disbursed by incubators approved under the scheme, and a committee at each incubator decides who gets selected. You can apply to up to three incubators at once, and you can use the grant and the debt part once each.
Step 3: Look at the IIT Technology Innovation Hubs (iHubs). Several run Entrepreneur-in-Residence (EIR) fellowships and prototype grants. EIR is aimed at people who want to work full time on a technology idea, and it pays a monthly stipend. For example, IIT Mandi's iHub describes a 12-month residency with monthly financial support, and an older IIT Patna call offered up to Rs 30,000 a month for 12 months. The Chanakya fellowship is not for every founder: at IIT Roorkee's iHub DivyaSampark it is aimed at undergraduate students working on smart devices and materials. Terms differ by hub, so read each call.
Step 4: Check your state's startup policy. Search for "[your state] startup policy" and look for the nodal agency. A few examples from public reports:
Bihar: seed funding of up to Rs 10 lakh as an interest-free loan for ten years, under the Bihar Startup Policy 2022. It is a loan, not a grant.
Punjab: under the Punjab Startup and Industrial Policy 2026, the seed grant was raised from Rs 3 lakh to Rs 5 lakh.
Uttar Pradesh: the state has offered seed capital under its startup policy. One earlier report put it at Rs 7 lakh, so confirm the current amount with the state before you plan around it.
Good to know
Rs 10 lakh is not a fixed amount in any one scheme. What you actually get depends on the scheme, the incubator, your state and how your milestones go.
Selection is competitive. A place in a programme does not guarantee funding.
If your SISFS application is rejected, the scheme FAQ says you can apply again after 3 months.
The official SISFS page says applications are open through the year and are free. It also says Startup India does not promote any authorised consultants. Be careful with anyone who charges to "guarantee" a grant.
Some third-party sites mention application cycles or closing dates. Check the portal for the current status before you start.
Eligibility has more conditions than the headline numbers. One guide lists a technology-based model, 51 percent Indian promoter shareholding and a cap on earlier government support. Read the latest guidelines on the portal.
This is general information, not legal or financial advice.
Sources
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