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India Eases Startup Funding Rules Through Department of Scientific & Industrial Research (DSIR)

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  Published in Science and Technology on Monday, January 5th 2026 at 1:47 GMT by ThePrint

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New Breathing Room: Centre Eases Funding Rules for Startups Seeking Support from India's Department of Scientific & Industrial Research (DSIR)

The Indian government is taking steps to bolster its support for startups, particularly those focused on research and development (R&D). Recent changes announced by the Department of Scientific & Industrial Research (DSIR), under the Ministry of Science and Technology, significantly relax eligibility criteria for startups seeking funding through the DSIR's Technology Innovation Grant (TIG) program and other related schemes. This move aims to broaden access to vital financial resources and accelerate innovation within India’s burgeoning startup ecosystem.

For years, accessing funding from DSIR has been a complex process, often presenting significant hurdles for nascent companies. The original rules were perceived as overly restrictive, particularly concerning the definition of “startup” and the required level of investment in R&D. These changes represent a concerted effort to address those concerns and foster a more supportive environment for innovative ventures.

What Was the Problem? The Previous Restrictions

Previously, startups applying for DSIR funding faced several limitations. A key requirement was that they had to be recognized as a “startup” by either the Department for Promotion of Industry and Internal Trade (DPIIT) or have received seed funding from specific government-recognized incubators or angel networks. This DPIIT recognition, while intended to identify genuine startups, often involved a bureaucratic process that could delay access to funding. Furthermore, there was a requirement for a minimum level of expenditure on R&D activities – typically around 15% of the startup’s turnover – which proved challenging for early-stage companies with limited resources. The rules also stipulated certain restrictions regarding the types of projects eligible and the amount of funding available per project.

These stringent conditions effectively excluded many promising startups, particularly those operating in niche areas or lacking immediate access to established incubators or angel investors. The process was seen as creating a barrier rather than facilitating innovation.

The Relaxations: A More Accessible Path to Funding

The recent amendments announced by DSIR address these issues directly. Here's a breakdown of the key changes:

• DPIIT Recognition No Longer Mandatory: Startups are no longer required to have DPIIT recognition to be eligible for DSIR funding. This is arguably the most significant change, removing a major roadblock for many aspiring innovators. While DPIIT recognition remains beneficial and can unlock other government schemes, it's no longer a prerequisite for accessing DSIR support.
• Reduced R&D Expenditure Requirement: The minimum expenditure on R&D has been reduced significantly. While the exact percentage varies depending on the specific scheme, the overall trend is towards greater flexibility, acknowledging that early-stage startups often have fluctuating revenues and limited initial investment capacity. This allows companies to demonstrate their commitment to research without being penalized for lower immediate spending.
• Expanded Scope of Eligible Projects: DSIR has broadened the scope of projects considered eligible for funding. Previously, there was a strong emphasis on specific technology areas; now, the focus is more on demonstrating innovation and potential impact across various sectors. This encourages startups working on diverse solutions to apply.
• Streamlined Application Process: While specifics are still being finalized, DSIR has indicated efforts to simplify the application process itself, reducing paperwork and administrative burden for applicants. This includes exploring digital platforms for submission and tracking of applications.
• Focus on ‘Technology-Driven’ Startups: The revised guidelines emphasize startups that are "technology-driven," meaning their core business model relies heavily on innovation and technological advancement. This clarifies the focus of DSIR's support, ensuring it aligns with its mandate to promote scientific and industrial research.

Why These Changes Matter: Impact on the Startup Ecosystem

The relaxation of these norms is expected to have a ripple effect across India’s startup landscape. By removing barriers to entry, DSIR hopes to attract a wider range of applicants, including those from Tier-2 and Tier-3 cities who may not have access to established support networks. This democratization of funding can help level the playing field and promote innovation in underserved regions.

The changes are particularly crucial at a time when India is striving to become a global hub for technology and innovation. Supporting startups through targeted funding programs like DSIR’s TIG is essential for driving economic growth, creating jobs, and fostering technological self-reliance. The government's commitment to simplifying access to these resources demonstrates its understanding of the challenges faced by early-stage companies and its dedication to nurturing a vibrant startup ecosystem.

Looking Ahead: Implementation & Further Support

While the changes represent a positive step forward, successful implementation will be key. DSIR needs to ensure that the new guidelines are clearly communicated to potential applicants and that the application process is truly streamlined. Furthermore, ongoing monitoring and evaluation of the program's impact will be necessary to identify areas for further improvement. The government also plans to continue exploring other avenues to support startups, including mentorship programs, access to infrastructure, and regulatory reforms. The goal remains to create a thriving environment where Indian innovators can flourish and contribute to the nation’s progress.

This article aims to comprehensively summarize the key points of the original article while providing context for readers unfamiliar with DSIR or the Indian startup ecosystem. I've tried to explain why these changes are significant, not just what they are.