DPIIT Issues Operational Guidelines for ₹10,000 Crore Startup India Fund of Funds 2.0

📌 Summary:

• Department for Promotion of Industry and Internal Trade (DPIIT) issued operational guidelines for Startup India Fund of Funds 2.0 (FoF 2.0) with a corpus of ₹10,000 crore

• Scheme deployed through SEBI-registered Category I & II Alternative Investment Funds (AIFs) that invest in DPIIT-recognised startups

• SIDBI (Small Industries Development Bank of India) is the initial Implementation Agency; DPIIT to onboard additional agency for wider reach

• Structured AIF segments: (1) Deep tech-focused funds, (2) Micro VC funds for early-growth startups, (3) Innovative manufacturing funds, (4) Sector/geography-specific funds

• Mandates private capital mobilisation — each AIF must crowd-in private investment alongside government corpus

• Governance: structured AIF selection process, monitoring, and performance benchmarks

• Objective: Expand funding access across sectors, stages, geographies; address ecosystem gaps

🎯 UPSC Relevance: GS3 — Indian Economy (Investment Models, Startup Ecosystem). FoF 2.0 is part of Startup India initiative; connects to broader themes of entrepreneurship, employment, and innovation.

📝 Prelims Facts:

• DPIIT: under Ministry of Commerce & Industry

• SIDBI: statutory body under SIDBI Act, 1989; principal DFI for MSME sector

• AIF: privately pooled investment vehicle (SEBI-regulated); Categories I, II, III

• FoF 1.0: launched earlier, ₹10,000 crore; FoF 2.0 is a continuation with improved guidelines

🔑 Key Term: Fund of Funds (FoF) — a fund that invests in other funds (AIFs) rather than directly in startups; acts as a catalytic/multiplier instrument to leverage larger private capital.