UP Cabinet Approves Startup Policy 2026 with Doubled Grants and New Data Centre Policy
The Uttar Pradesh Cabinet, chaired by Chief Minister Yogi Adityanath, on Monday approved the Uttar Pradesh Startup Policy-2026 and the Uttar Pradesh Data Centre Policy-2026. These policies aim to promote innovation, entrepreneurship, and investment in the state, while creating employment opportunities for the youth.
The previous data centre policy expired on January 27 this year. The new policies are expected to contribute to the state's goal of achieving a $1 trillion economy.
Minister for IT & Electronics Sunil Sharma announced several financial incentives under the new startup policy. The sustenance allowance for startups has been increased from Rs 17,500 per month for one year to Rs 20,000 per month for two years. Prototype grants have been doubled from Rs 5 lakh to Rs 10 lakh, and seed funding has been raised from Rs 7.5 lakh to Rs 15 lakh. Under special circumstances, seed funding can be enhanced up to Rs 50 lakh.
Other incentives include reimbursement of up to Rs 2 crore for patents and quality certification, matching grants of up to Rs 5 crore, 4 percent interest subsidy on term loans up to Rs 2 crore, and reimbursement of EPF and ESI contributions. These measures are designed to ease early-stage financial challenges and help startups scale rapidly.
Special incentives have been introduced for deep-tech startups working in artificial intelligence, robotics, quantum technology, space technology, and other emerging fields. These startups will be eligible for prototype assistance up to Rs 20 lakh, seed funding up to Rs 30 lakh, patience capital support up to Rs 100 crore, and financial assistance of up to 40 percent for research and development.
The policy also enhances support for incubators. Capital grants for incubators have been increased from Rs 1 crore to Rs 1.25 crore, with incubators in Purvanchal and Bundelkhand eligible for up to Rs 1.50 crore. Operational expenditure grants have been raised from Rs 30 lakh to Rs 40 lakh per year. Additional incentives will go to high-performing incubators and startups that raise investments through them.
To promote cutting-edge research, the state will establish 20 new Centres of Excellence (CoEs) focusing on AI, machine learning, space technology, healthtech, agritech, robotics, and other emerging technologies. Financial assistance for each CoE has been increased from Rs 10 crore to Rs 12 crore. A state-level Deep-Tech U-Hub will provide startups with an integrated platform for incubation, investment, industry collaboration, mentorship, and advanced lab facilities.
Sharma noted that Uttar Pradesh currently has around 17,000 registered startups. A Startup Mission Directorate, to be constituted under the Societies Registration Act, will function under the Department of IT & Electronics as the nodal agency to improve coordination among startups, incubators, and CoEs.
