India’s Modi Launches $1.5 Billion Fund for Startups
Indian Prime Minister Narendra Modi launched a number of initiatives on Saturday to support the country’s start-ups, including a 100 billion rupee ($1.5 billion) fund and a string of tax breaks for both the companies and their investors.
However, the push by Modi’s government is the first time Indian policymakers have announced an agenda directly aimed at promoting start-ups and entrepreneurship. Modi unveiled plans for a new 100 billion rupee fund: a structured fund of funds that will invest in venture capital funds over a period of four years, financed by the government and the state-owned Life Insurance Corp.(LIC). He also said start-up companies would benefit from cheaper and faster patent applications, enjoying 80% rebates on the cost of patents. A mobile app would allow companies to be set up within a day, he promised.
Moreover, they will be exempt from income tax for the first three years in which they make a profit. Their investors could also benefit: recognized funds of funds could see exemptions from capital gains tax, Modi said.
India, with a rapidly expanding population of Internet users, is seen as one of the world’s fastest growing start-up hotspots. Venture capital funds including Sequoia and Tiger Global have raised multi-billion dollar funds for their Indian investments in recent years.
the Article first appeared in Fortune.com
Photograph by Jonathan Brady — Reuters