May 11, 2023

Benefits from the Government of India for Gaming Startups – Part II

Gaming is one of the fastest-growing sunrise industries in India, clocking 25- 30% growth in the last few years. Internet affordability and growing smartphone penetration in the country is indicative of bright prospects for the gaming industry. With Industry being cusp of growth, in part I of this article, we spoke on the benefits the Government provides to startups.

We are elated by the response received on Part I and in this final part we try to capture what are the types of incentives offered by the GOI more specifically from a funding point of view, that a startup founder (especially in the gaming space) can explore for their business. This section captures the lesser-known benefits offered by the Government and how a founder can make the best use of this after evaluating applicable conditions.

Funding specific initiatives  

  • The GOI has permitted 100% Foreign Direct Investment (FDI) in gaming, and this is the basis of the automatic route under the Electronic System and IT & BPM sectors. This means that without any restrictions and subject to other conditions of the allied laws, foreign investors can also invest in the gaming space in India. This helps, gaming startup founders to raise funds not only from domestic investors but also from foreign investors.
  • Start-up India Seed Fund Scheme (SISFS) – The target of this scheme is to provide seed funding to 3600 start-ups through 300 incubators. The objective of this fund is to support companies for ideation, prototype development, trials, entry into the market and thereafter generating revenue. The Seed Fund will be disbursed to eligible startups through eligible incubators across India. The founders can keep a close watch on the website to see when the application is live and apply for the same.
  • Startup India Investor Connect- Startup India Investor Connect was launched in the sixth meeting of the National Startup Advisory Council (NSAC), convened on 11th March 2023 to serve as a dedicated platform that connects startups to investors, promotes entrepreneurship, and accelerates engagements across diverse sectors, functions, stages, geographies, and backgrounds, which is also the need of the ecosystem. The founder can also leave a pitch on the portal and accordingly investor connect will be established.
  • State Government Initiatives
    • Further, certain State governments like the Karnataka Government has launched the ‘Karnataka ELEVATE Fund.’ The objective of this is to identify the most innovative start-ups in the state who could be given government support to enhance their business and take it a step forward.
    • Yet another initiative is the ‘Kit-Ven fund’. Kit-Ven stands for Karnataka Information Technology Venture Fund and is a venture capital fund backed by the state and central government financial institutions operating out of Karnataka. It is an early-stage micro-VC fund that gaming founders can consider from an investment point of view and has been functioning for more than 20 years and has been pioneer in this space and acted as catalyst in growth of many companies.
    • Similar to this Kerala Startup Mission also has a seed fund for eligible startups, to foster the formation and development of innovative, technology-based business enterprises, in addition to the Innovation grants.
  • Low-interest rate loans by the GOI for start-ups- Startups can also explore the working capital loans provided by the Central and State Governments, especially to the startups at a lower interest rate. For example, one may refer to the seed loan assistance given by the Kerala Government at an ROI as low as 7.6%. Further, other schemes which can be explored by the founders include:
    1. Bank Credit Facilitation scheme
    2. Pradhan Mantri Mudra Yojana (PMMY)
    3. Credit Guarantee Scheme (CGS)
    4. Stand up India
    5. Sustainable Finance Scheme, etc.

Each of these schemes has its features and conditions and is available to be utilized by MSMEs and start-ups in India.

  • Generic initiatives 
  • Women Entrepreneurship 
    • Central Govt has laid out many schemes, inter alia,Women Entrepreneurship Programs (WEP) through which funding and financial assistance, mentorship, and incubation support will be provided to existing and aspiring entrepreneurs. Further Mudra Yogana for Women, grants loans up to INR 10Lakhs without any collateral and with low-interest rates and relaxed repayment tenure.
    • Several states in India like Andhra Pradesh, Goa, Gujarat, J&K, Ladakh, Puducherry, Karnataka, Maharashtra, and the like have policies that support women’s entrepreneurship.
    • One may refer to this space for all the host of initiatives Women Entrepreneurship ( apply for the relevant ones.
  • MAARG – Mentorship, Advisory, Assistance, Resilience, Growth 
    • MAARG is a portal that has been set up by Start-up India. The idea of this platform is to facilitate start-ups across functions, sectors, geographies, stages, and backgrounds to reach out to professionals for Mentorship, Advisory, Assistance, and Growth.
    • This platform enables start-ups to connect with investors, industry experts, academicians, etc, and seek input from them.
    • The objectives of the MAARG portal are three-fold – 1) To provide guidance and support to start-ups across their business cycles; 2) Establish a structured framework that will assist in connecting start-ups with mentors; 3) Establish a result-oriented platform to track the progress of mentor – start-ups engagements.
  • Startup India Yatra- The Startup India Yatra aims to reach each district of the country. Entrepreneurs will also get incubated to succeed in their journey from idea to enterprise. The camp in each city will include an Idea pitching session, Startup India facilitation & Speaker sessions, Ideation workshop with incubation managers & startup founders.


The Indian gaming industry is set to be on a high growth trajectory, with rapid digitalization and transformation, and an increasing number of benefits provided by the Government. While the earlier part of the article spoke on policy-level initiatives to strengthen the AVGC space and the benefits of the DPIIT in general. Through this article, we have tried to create awareness of the funding benefits which founders can refer to for their entrepreneurial journey. While this is not an exhaustive list, a gaming founder may refer to this as a good starting point along with the pages of Startup India and Invest India websites, to get a good idea of schemes that apply to them.


Poornima Nayak