Yogi Adityanath government in Uttar Pradesh has approved the new 'Uttar Pradesh Startup Policy 2026', taking forward the 'Uttar Pradesh Startup Policy 2020' (Amendment-2022).
Incentives in UP Startup Policy
The Uttar Pradesh Startup Policy 2020 (First Amendment-2022) is an ambitious plan by the government to promote entrepreneurship and create an ecosystem for startups in the state. This policy replaced the startup-related provisions of the "Uttar Pradesh IT and Startup Policy, 2016" and the "Uttar Pradesh IT and Startup Policy, 2017-22."
Its sole purpose is to create a structured ecosystem that connects startups, incubators, educational institutions, mentors, investors, and government agencies. Now, in 2026, the Uttar Pradesh Startup Policy 2026 has been approved, replacing the Uttar Pradesh Startup Policy 2020 (First Amendment-2022). Under this policy, the government created a ₹1,000 crore startup fund, which is being operated through Alternative Investment Funds (AIFs) managed by SIDBI.
Government increased financial assistance
The Uttar Pradesh government formulated its independent Startup Policy in 2020. It underwent its first major revision in 2022. Under this policy, startups were provided with ₹17,500 per month for one year and a lump sum of up to ₹5 lakh for prototype development. This year, the government upgraded the old policy and approved the Uttar Pradesh Startup Policy 2026, further expanding these benefits.
How much more incentive is given now?
The new 2026 policy provides for eligible startups at the idea stage to receive ₹20,000 per month, up from the previous ₹17,500. This allowance will now be provided for a maximum of 2 years (from idea to prototype stage), instead of the previous 1 year. This means a startup will receive a total financial assistance of up to ₹4,800,000.
The old policy provided assistance of up to ₹7.5 lakh for the formal launch and marketing of a product. The new policy has increased this to ₹15 lakh. Similarly, the prototype grant has been increased from ₹5 lakh to ₹10 lakh.
Who will get 50% extra bonus?
If the startup is run by a woman, a person with a disability, a transgender person, or an EWS (economically weaker section), or if the founder is from the Purvanchal and Bundelkhand regions, they will receive a 50% additional bonus on the seed fund and prototype grant (i.e., up to 22.5 lakh rupees instead of 15 lakh rupees). Furthermore, under this new policy, startups working in sectors like AI and space-tech are also being provided with special access to grants twice the normal amount and long-term capital of up to 40 crore rupees.
