Ahead of the Union Budget for FY 2026-27, the Indian startup ecosystem is seeking policy measures to reduce compliance burdens, unlock greater private capital and strengthen India's strategic technology base, according to Medhansh Seth, Founder of AceCubing and author of Surrogate Entrepreneur.
Seth said Indian startups have shown strong resilience in 2025 despite global uncertainty, raising USD 10.5 billion in funding during the year.
"2025 has already been a phenomenal year for the Indian economy and the startup ecosystem. Startup ecosystem raised 10.5 billion dollars in fundraising. That's a lot, but here are two things I would keep in mind for this budget to make the next year even better," Seth told PTI.
Flagging operational hurdles, Seth said founders continue to face heavy tax and compliance pressures, which divert attention from innovation and business growth.
"First, we need to take some burden off the startup founder. Startup founders are already doing something extremely hard. They are managing marketing, logistics, and so many other things already. So the best we can do to help them is by taking some burden off the taxation or the GST filing,'" he said.
He added that easing compliance would also improve transparency and record-keeping, benefiting the government in the long run.
On funding, Seth stressed the need to mobilise more domestic private capital, particularly from high-net-worth individuals (HNIs), to support innovation-led growth."And second, what we need to do is we need to circulate the HNI money more and more in the economy. Because what matters right now is for innovation and for creativity, we need to make sure that startups have a lot of adequate funding,"," he said.
Seth noted that alongside the government's existing Rs 1 lakh crore startup fund, lowering long-term capital gains tax could further incentivise private investments in startups.
Looking beyond immediate fiscal measures, Seth said the Budget should also focus on building India's economic and technological self-reliance amid increasing global volatility.
"Going into 2026, I believe that we need to be an independent economy because the world is being extremely uncertain. We don't know what is going to happen,," he said.
Highlighting gaps in digital infrastructure, Seth pointed out that while India generates nearly 20 per cent of the world's data, it stores only about 2 per cent domestically.
"This makes it essential to invest in domestic data centre capacity," he said.
He also underlined the importance of strengthening domestic semiconductor manufacturing to support India's ambitions in artificial intelligence and advanced technologies.
"We need to make sure that our data centers are adequate because India generates 20 per cent of the world's data, but we only have 2 per cent of it,," he said.
Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget on February 1, her ninth Budget, one short of the record set by former finance minister Morarji Desai.
The Budget Session of Parliament will begin on January 28 with President Droupadi Murmu's address to both Houses, followed by the presentation of the Economic Survey.