Uttar Pradesh is stepping up its ambition to become one of India’s leading startup destinations with the launch of its Startup Policy 2026. The five-year framework focuses on funding, deep-tech innovation, incubation, talent development and easier access to government markets, creating a broader support system for startups at different stages of growth.

₹1,000 Crore Fund to Back Startups

A major highlight of the policy is the proposed ₹1,000 crore UP Startup Fund, structured as a fund of funds. Instead of investing directly in startups, the government will invest through daughter funds that can subsequently support innovative businesses operating in Uttar Pradesh.

The policy also expands the existing AKTU Corpus Fund from ₹150 crore to ₹400 crore, adding ₹250 crore for startup and incubator grants, seed capital, Centres of Excellence and ecosystem-building initiatives.

An additional UP Investor Network is planned to bring together angel investors, venture capitalists, HNIs and family offices, with the goal of creating a corpus of up to ₹100 crore for emerging startups.

Prototype and Seed Funding for Founders

The new framework provides financial assistance across different stages of a startup’s journey. Eligible prototype-stage startups can receive a ₹20,000 monthly sustenance allowance for up to two years, along with a prototype grant of up to ₹10 lakh.

Startups can also access seed capital of up to ₹15 lakh for product development, testing, market research and launching an MVP. For businesses that have already raised external funding, the policy proposes a matching grant of up to 50% of the funds raised, capped at ₹5 crore, subject to eligibility conditions.

Additional incentives are proposed for women-led ventures, EWS, Divyangjan and transgender entrepreneurs, as well as startups based in Purvanchal and Bundelkhand.

Deep-Tech Gets a Major Push

Deep technology is at the heart of the new policy. Eligible deep-tech startups can receive enhanced prototype and seed assistance, while a dedicated “Patience Capital” mechanism aims to support businesses requiring longer R&D and commercialisation cycles.

Up to four deep-tech startups could receive funding of up to ₹40 crore each, with the annual allocation capped at ₹100 crore. The policy also proposes an R&D matching grant covering up to 40% of verified expenditure.

20 Centres of Excellence Planned

To strengthen innovation infrastructure, Uttar Pradesh plans to establish 20 Centres of Excellence over five years across areas such as AI, quantum computing, blockchain, space-tech, defence-tech, agritech and healthtech.

The state also plans to establish U-Hub, an incubation centre under StartinUP, providing mentorship, infrastructure, funding access and industry connections from ideation to scale-up.

Startups to Get Better Market Access

The policy goes beyond funding by encouraging government departments and public agencies to become early customers for startup products and services.

It also proposes greater preference for startups in state procurement, potentially creating a significant market opportunity for young companies struggling to secure their first institutional customers.

Building a Startup Ecosystem Across the State

The policy aims to expand incubators across districts, support entrepreneurship cells in educational institutions and promote hackathons, ideathons, startup fairs and business-plan competitions.

If implemented effectively, the framework could help Uttar Pradesh move from simply funding startups to building a complete ecosystem where founders can ideate, innovate, raise capital, find customers and scale within the state.

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