The Uttar Pradesh government has introduced the Uttar Pradesh Startup Policy 2026, laying out a five-year roadmap to strengthen the state’s startup ecosystem through expanded funding, incubation infrastructure, deep-tech support, talent development and easier access to government markets.
The policy, issued by the Department of IT & Electronics, Government of Uttar Pradesh, seeks to position the state among India’s leading startup destinations while encouraging innovation across both emerging technologies and sectors with regional and social relevance.
The new framework will remain in force for five years from the date of notification and will be sector-agnostic, covering startups operating across sectors in Uttar Pradesh. The policy also provides for continued operation of the earlier Startup Policy 2020 until the new policy is formally notified, with transitional provisions for startups and beneficiaries already covered under the previous framework.
₹1,000 Crore UP Startup Fund and ₹400 Crore Corpus
One of the biggest financial components of the policy is the ₹1,000 crore UP Startup Fund, structured as a fund of funds. Rather than investing directly in startups, the government will invest through daughter funds that will subsequently back innovative startups operating in Uttar Pradesh.
The policy also expands the existing AKTU Corpus Fund from ₹150 crore by adding another ₹250 crore, taking the total corpus to ₹400 crore. The corpus will support startup and incubator grants, seed capital, Centre of Excellence initiatives and startup ecosystem promotion activities.
In addition, the government plans to facilitate a UP Investor Network, bringing together angel investors, venture capitalists, HNIs and family offices with the aim of creating an aggregated corpus of up to ₹100 crore for emerging startups, particularly in areas such as AI, machine learning, electric vehicles, MedTech, robotics and drones.
Startups to Get Prototype, Seed and Matching-Fund Support
The policy offers a range of incentives based on a startup’s stage of development.
Eligible startups at the prototype stage can receive a sustenance allowance of ₹20,000 per month for two years, while a one-time prototype grant of up to ₹10 lakh is available for eligible product development. Startups can also access seed capital of up to ₹15 lakh for activities including product development, testing, market research and launching an MVP.
For startups that have already attracted external capital, the government has proposed a matching grant of 50% of funds raised, up to ₹5 crore, subject to a minimum qualifying fundraise of ₹2 crore and other conditions prescribed under the policy. The provision is intended to give startups additional capital as they move into growth and scale-up stages.
The policy also provides an additional 50% incentive on seed and prototype grants for eligible startups founded or co-founded by women, EWS groups, Divyangjan or transgender entrepreneurs, as well as startups based in Purvanchal and Bundelkhand or operating in areas such as agritech, sustainability, renewable energy, waste management and climate change.
Deep-Tech Gets Dedicated Financial Support
Deep-tech is another major focus of the new policy.
Eligible deep-tech startups can receive enhanced prototype and seed assistance of up to twice the standard startup incentive, subject to evaluation and approval.
More significantly, the policy introduces a “Patience Capital” mechanism for deep-tech ventures that require longer development cycles, substantial R&D and extended periods before commercialisation. Up to four deep-tech startups can receive support in a financial year, with funding of up to ₹40 crore per startup, while the annual allocation under this component is capped at ₹100 crore.
The state will also provide an R&D matching grant covering up to 40% of verified R&D expenditure. The support is structured as a non-dilutive grant initially, with repayment through a 3% revenue royalty only after the startup crosses ₹1 crore in annual revenue.
For technology-heavy startups, the policy additionally proposes reimbursement for eligible data-centre and cloud-service expenses, with support of up to ₹2 lakh per financial year.
20 New Centres of Excellence Planned
Infrastructure forms one of the six central pillars of the policy.
The government proposes establishing 20 new Centres of Excellence over five years, with a focus on areas including artificial intelligence and machine learning, quantum computing, blockchain, additive manufacturing, space-tech, defence-tech, agritech, edtech and healthtech.
These centres are expected to provide incubation infrastructure, co-working facilities, product testing laboratories, advanced computing resources and expert mentorship. The policy envisages each CoE supporting promising product-based startups from India and abroad.
The government will also establish U-Hub, an incubation centre under StartinUP, designed to support startups from the ideation stage through scale-up by providing structured mentorship, infrastructure, funding access and industry connections.
For eligible Centres of Excellence, the state has proposed financial assistance of up to ₹12 crore over five years, covering capital and operational expenditure, with support linked to performance.
Startup Portal to Become a Single-Window System
The policy also places considerable emphasis on digitising the startup support system.
The StartinUP Online Portal is planned as an integrated single-window platform connecting startups with investors, incubators, mentors, Centres of Excellence and other ecosystem stakeholders.
The portal will provide information on policies and incentives, facilitate online applications and incentive claims, list incubators and resources, offer access to courses and capacity-building programmes, and enable networking between startups and ecosystem participants. It is also planned to integrate with government platforms including DPIIT, BHASKAR and MAARG.
For startups, this could mean a more centralised route for accessing government-backed support rather than navigating multiple disconnected systems.
Incubators to Expand Across Districts
The policy aims to take incubation beyond major startup centres by promoting the establishment of incubators in each district of Uttar Pradesh.
It also introduces the concept of “Navratna” incubators, experienced and high-performing incubation centres that will mentor and support other incubators across the state.
Women-led startups are set to receive dedicated representation, with 25% of incubation seats in government-recognised incubators preferentially allocated to startups with women founders or co-founders, subject to a minimum 51% women equity.
The government has also proposed capital expenditure support of up to ₹1.25 crore for eligible non-government incubators, with the limit rising to ₹1.50 crore for incubators in Purvanchal and Bundelkhand. Operational expenditure support of up to ₹40 lakh per year can also be provided for up to five years, subject to performance requirements.
Greater Focus on Students and Early Innovation
The policy seeks to build the startup pipeline before entrepreneurs enter the market.
Universities, colleges and schools will be encouraged to establish Entrepreneurship Cells, while faculty development programmes will promote innovation and entrepreneurship within educational institutions.
The policy also proposes initiatives such as Startup Express, Startup Mela, hackathons, Junior Ideathons, boot camps and business-plan competitions.
Under the Junior Ideathon, district-level student teams from Classes 8 to 12 can receive awards of up to ₹25,000 per idea, with support available for up to 50 ideas annually.
For scaling startups, the government has proposed Grand Challenges offering financial support of up to ₹3 crore, while its annual Startup Week could provide proof-of-concept work orders of up to ₹15 lakh and ₹10 lakh to selected startups in participating sectors.
Startups Could Get Easier Access to Government Procurement
Beyond funding, the policy attempts to address another challenge faced by young companies: finding customers.
The government plans to encourage departments and public agencies to act as early adopters and anchor customers. It also proposes giving startups greater preference in state government procurement.
For products and services not covered through GeM, the state will explore amendments to procurement guidelines to earmark a specific value or percentage of public procurement for startups.
This market-access component could be particularly important for startups that have developed products but struggle to secure their first large institutional customers.
Incentives for Formal Employment and Business Expansion
The policy also includes measures aimed at reducing the operating burden on young companies.
Eligible startups can receive a 4% interest subvention on term loans, or the actual interest paid where lower, subject to a maximum eligible loan amount of ₹2 crore for three years.
The government will also reimburse eligible employer contributions towards Provident Fund and ESI for three years, subject to specified conditions.
Startups can further receive reimbursement for attending national and international conferences and events, while eligible early-traction and scaling-stage startups can access tiered reimbursement for accelerator programmes.
Reduced Compliance Burden
The policy also attempts to make Uttar Pradesh easier to operate from for young businesses.
It provides for a facilitative regulatory environment, including a provision under which labour inspections would generally not be conducted for three to five years from incorporation, except where a credible and verifiable complaint of violation is received and the prescribed approval process is followed.
The policy also permits startups to operate in three shifts with women working at night, subject to applicable safety, welfare, health and legal requirements.
A Broader Attempt to Build the Startup Ecosystem
Taken together, the Uttar Pradesh Startup Policy 2026 goes beyond simply offering financial incentives. Its framework combines capital, infrastructure, talent, industry access, market opportunities and institutional support across six pillars.
The policy’s stated ambition is to create an ecosystem where startups can move from ideation and prototyping to commercialisation and scale while remaining anchored in Uttar Pradesh. It also places particular emphasis on emerging technologies, district-level entrepreneurship and startups working on social and national priorities.
Implementation will be overseen through a four-tier governance structure comprising a Steering Committee, Empowered Committee, Policy Implementation Unit and Startup Review Committee of Experts. A dedicated UP Startup Mission is also proposed as the single-window and nodal agency for implementing the policy.
For founders, the real test will now be execution, how quickly these incentives reach eligible startups, how effectively district-level infrastructure develops and whether the proposed funding and market-access mechanisms translate into sustained startup creation and scale.
If implemented as outlined, the policy could mark a significant shift in Uttar Pradesh’s startup strategy: from supporting individual ventures to building a wider innovation infrastructure capable of producing, funding and retaining startups across the state.
-By Shivani Solanki
