India Budget 2025: New changes for foreign startups? Here’s what to expect

The India Union Budget 2025 is expected to introduce several measures aimed at bolstering India's startup ecosystem, with particular attention to foreign startups and international collaborations.

Expected Key initiatives include:

Abolition of the 'Angel Tax': The government has repealed the 'angel tax,' which previously taxed investments exceeding a startup's fair market value.

This move is anticipated to stimulate innovation and attract increased foreign investment into India's burgeoning startup landscape, as mentioned in a report by Reuters.


Support for Cross-Border Collaborations: Recognizing the global nature of modern startups, the budget emphasizes support for cross-border partnerships and access to international markets.

This initiative aims to provide startups with greater opportunities to scale globally, as per a report by KPMG.

Tax Reforms and Policy Support: The budget outlines tax reforms designed to attract foreign investments, including a clear tax policy framework to encourage international funding in startups.

Additionally, there is a focus on simplifying regulatory processes to enhance the ease of doing business for foreign entities, as mentioned in a report by ET Now.

Incentives for AI and Deep Tech: The government plans to introduce targeted R&D tax incentives and grants for AI startups, along with public-sector investments in AI-driven initiatives.

This strategy aims to position India as a global hub for AI and deep tech innovation, as per a report by Firstpost.

These measures can help to create an enabling environment for both domestic and foreign startups, fostering innovation, and facilitating global expansion.

FAQs

What do you mean by Union Budget?

The Union Budget serves as a comprehensive financial blueprint, detailing the Indian government's projected revenue and expenditures for the fiscal year. Officially referred to as the Annual Financial Statement, it plays a crucial role in shaping economic policies and fiscal planning.

Who started Union Budget?

India's inaugural Union Budget was delivered on April 7, 1860, by James Wilson, a finance member of the Indian Council and the founder of The Economist newspaper.