Lucknow: Uttar Pradesh’s new startup policy seeks to strengthen the state’s entrepreneurial landscape through large-scale funding, deep-tech support, district-level incubation and easier access to government markets. The Uttar Pradesh Startup Policy 2026, in force for 2026–31, sets out a framework aimed at strengthening the state’s startup ecosystem across sectors and regions.
The policy provides for a ₹1,000-crore UP Startup Fund, an expanded ₹400-crore AKTU Corpus Fund, a dedicated deep-tech incubation hub and 20 new Centres of Excellence over five years. It also introduces financial support for startups at different stages, from prototyping and seed funding to scale-up and deep-tech research.
₹1,000 Crore Fund of Funds to Back Startups
One of the policy’s major provisions is the ₹1,000-crore UP Startup Fund, structured as a fund of funds. The government will invest through SEBI-registered daughter funds rather than directly investing in individual startups.
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The policy also provides for a ₹400-crore corpus to support startup and incubator grants, seed assistance, Centres of Excellence and ecosystem-promotion activities.
Key financial provisions include:
- ₹20,000 per month sustenance allowance for eligible startups for up to two years.
- Prototype grant of up to ₹10 lakh.
- Seed capital support of up to ₹15 lakh.
- Matching grant of up to ₹5 crore for eligible high-growth startups.
- Additional 50% incentives on prototype and seed grants for specified categories, including women-led startups, Divyangjan-led startups, EWS and transgender entrepreneurs, startups in Purvanchal and Bundelkhand, and ventures in identified priority sectors.
Deep-Tech Startups Get Enhanced Support
Deep-tech is a specific focus of the 2026 policy. Startups supported through the state’s deep-tech ecosystem can receive enhanced prototype and seed assistance, along with a dedicated Patience Capital mechanism.
Under the policy, eligible deep-tech startups can receive up to ₹40 crore per startup through this long-term funding mechanism, subject to prescribed eligibility and approval conditions.
The policy also provides for:
- 40% matching support for verified R&D expenditure.
- Repayment of the R&D grant through a 3% revenue royalty after the startup crosses ₹1 crore in annual revenue, subject to policy conditions.
- Reimbursement of eligible cloud and data-centre expenses of up to ₹2 lakh per financial year.
20 New Centres of Excellence Planned
The state plans to establish 20 new Centres of Excellence over five years in emerging technology and innovation areas.
The proposed focus areas include:
- Artificial Intelligence and Machine Learning
- Quantum Computing
- Blockchain
- SpaceTech
- DefenceTech
- AgriTech
- HealthTech
- EdTech
- Additive Manufacturing
- Other emerging and deep-tech domains
Each eligible CoE can receive financial assistance of up to ₹12 crore over five years, according to the UP Startup Mission.
The policy also envisages U-Hub, a dedicated deep-tech incubation centre intended to support startups from early-stage innovation through commercialisation and scale-up.
Incubation to Expand Beyond Major Cities
The policy seeks to extend the startup ecosystem across Uttar Pradesh rather than concentrating incubation infrastructure in a few established technology centres.
The state plans to promote district-level incubators through a hub-and-spoke model. It also proposes the development of experienced “Navratna” incubators that can mentor and support other incubation centres.
For eligible incubators, the policy provides:
- Capital support of up to ₹1.25 crore, with enhanced support of up to ₹1.50 crore for eligible incubators in Purvanchal and Bundelkhand.
- Operational expenditure support of up to ₹40 lakh annually for up to five years, subject to performance conditions.
StartInUP Portal to Serve as Single-Window Platform
The policy places a strong emphasis on digital access to startup support.
The StartInUP Portal is being developed as an integrated platform through which startups can access information, registration, incentives, mentors, investors, incubators and other ecosystem resources.
Startups seeking benefits under the policy must obtain Startup India recognition and register on the StartInUP Portal.
The Uttar Pradesh Startup Mission has also issued detailed guidelines for incentives to startup units and incubators under the 2026 policy.
Government Procurement to Create Market Access
The policy goes beyond funding by seeking to improve startups’ access to government markets.
Government departments and public agencies are encouraged to act as early adopters and anchor customers for eligible startup products and services. The framework also provides for startup participation in government procurement, including applicable benefits available to DPIIT-recognised startups through GeM.
Focus on Students and Early-Stage Innovation
The policy also aims to develop entrepreneurship at the educational level.
It proposes entrepreneurship cells in educational institutions and programmes including Startup Express, Startup Mela, hackathons, IdeaThons, boot camps and business-plan competitions. These initiatives are intended to identify and nurture potential entrepreneurs before they reach the commercial stage.
Financial and Regulatory Support for Startups
Eligible startups can also receive operational support under the policy, including:
- 4% interest subvention on eligible term loans, subject to prescribed limits.
- Reimbursement of eligible employer contributions towards Provident Fund and ESI for a specified period.
- Support for participation in national and international conferences and events.
- Assistance for eligible accelerator programmes.
The policy also provides a facilitative regulatory framework for startups, including provisions concerning labour inspections and operation in three shifts with women working at night, subject to applicable safety, welfare and legal requirements.
A Six-Pillar Startup Framework
The Uttar Pradesh Startup Policy 2026 is structured around six broad areas:
- Infrastructure development
- Funding support
- Talent development and capacity building
- Industry connect
- Ecosystem promotion
- Ecosystem strengthening and enablement
The policy is intended to support startups from ideation and prototyping through incubation, funding, commercialisation and scale-up. Its implementation is supported by the Uttar Pradesh Startup Mission, which serves as the state’s dedicated platform for developing the startup ecosystem.
The policy is now accompanied by implementation guidelines, with the effectiveness of its provisions depending on how the proposed funding, incubation, deep-tech and market-access mechanisms are implemented across Uttar Pradesh.
