UP govt approves Startup Policy 2026, targets Rs 2 lakh crore investment under new Data Centre Policy

The Uttar Pradesh cabinet has approved new startup and data centre policies as part of efforts to promote innovation, attract investment and create jobs in the state.

The decisions were taken at a cabinet meeting chaired by Chief Minister Yogi Adityanath on Monday.

The government said the Uttar Pradesh Startup Policy-2026 and the Uttar Pradesh Data Centre Policy-2026 would support its aim of developing the state as a major centre for entrepreneurship and digital infrastructure.

Under the startup policy, the monthly sustenance allowance for eligible startups has been increased from Rs 17,500 for one year to Rs 20,000 for two years.

IT and Electronics Minister Sunil Sharma said prototype grants had been doubled from Rs 5 lakh to Rs 10 lakh, while seed funding had been raised from Rs 7.5 lakh to Rs 15 lakh.

“Under special circumstances, seed funding may be enhanced up to Rs 50 lakh,” Sharma said.

The policy also provides reimbursement of up to Rs 2 crore for patents and quality certification, matching grants of up to Rs 5 crore, a 4% interest subsidy on term loans of up to Rs 2 crore, and reimbursement of EPF and ESI contributions.

Special incentives have been announced for deep-tech startups working in areas such as AI, robotics, quantum technology, space technology and other emerging sectors.

Such startups will be eligible for prototype assistance of up to Rs 20 lakh, seed funding of up to Rs 30 lakh, patient capital support of up to Rs 100 crore, and financial assistance of up to 40% for research and development.

The government has also increased support for incubators. Capital grants have been raised from Rs 1 crore to Rs 1.25 crore, while incubators in Purvanchal and Bundelkhand will be eligible for grants of up to Rs 1.5 crore. Annual operational support has been increased from Rs 30 lakh to Rs 40 lakh.

The state plans to establish 20 new Centres of Excellence focusing on areas including AI, machine learning, space technology, health technology, agricultural technology and robotics. Financial assistance for such centres has been increased from Rs 10 crore to Rs 12 crore.

A state-level Deep-Tech U-Hub will also be set up to provide startups with access to incubation, investment support, industry collaboration, mentorship and laboratory facilities.

The official StartInUP portal lists 22,318 Startup India-recognised startups and 3,581 StartInUP-recognised startups in Uttar Pradesh.

Sharma said a Startup Mission Directorate would be established to strengthen coordination among startups, incubators and Centres of Excellence.

The Uttar Pradesh Startup Mission will be constituted under the Societies Registration Act and will function under the administrative control of the Department of IT and Electronics.

The government said the Mission would coordinate investors, industry, academic institutions and startups, and oversee the implementation, monitoring and evaluation of startup-related initiatives.

The cabinet also approved the Uttar Pradesh Data Centre Policy-2026. The previous data centre policy had expired on 27 January.

The new policy aimed to make Uttar Pradesh a green, AI-ready and globally competitive data centre hub.

It has set a target of adding 2GW of data centre capacity and attracting investment of more than Rs 2 lakh crore.

“The new policy places special emphasis on GPU-based infrastructure, energy efficiency, and sustainable development,” Sharma said.

He said additional incentives had been proposed for Bundelkhand and Purvanchal, along with incentives for Tier-3 and Tier-4 data centres, AI compute infrastructure, and green and sustainable operations.

The policy would help develop a data centre ecosystem in the state and create employment opportunities in information technology and related sectors.

According to Sharma, the state first implemented its data centre policy in January 2021 and amended it in November 2022. Seven projects have become operational under the earlier policy, which covered six data centre parks and two standalone data centre units involving investment of about Rs 21,343 crore.