The Uttar Pradesh Cabinet has approved the Uttar Pradesh Startup Policy-2026 and the Uttar Pradesh Data Centre Policy-2026, marking a major step towards strengthening the state’s innovation ecosystem and attracting large-scale investments. The decisions were taken during a Cabinet meeting chaired by Chief Minister Yogi Adityanath.
The new policies aim to promote entrepreneurship, support emerging technologies, expand digital infrastructure, and create employment and self-employment opportunities for the youth while advancing Uttar Pradesh’s vision of becoming a USD 1 trillion economy.
Startup Policy Focuses on Stronger Financial Support
The Startup Policy-2026 introduces enhanced financial assistance for startups at every stage of growth, from ideation to scaling up.
Announcing the policy, IT and Electronics Minister Sunil Sharma said the government has substantially increased financial support for entrepreneurs. The monthly sustenance allowance has been raised from ₹17,500 for one year to ₹20,000 per month for two years. Prototype grants have been doubled from ₹5 lakh to ₹10 lakh, while seed funding has increased from ₹7.5 lakh to ₹15 lakh. In exceptional cases, seed funding can go up to ₹50 lakh.
The policy also offers reimbursement of up to ₹2 crore for patents and quality certifications, matching grants of up to ₹5 crore, an interest subsidy of 4% on term loans up to ₹2 crore, and reimbursement of EPF and ESI contributions to help startups overcome early-stage financial challenges.
Special Incentives for Deep-Tech Startups
To encourage innovation in advanced technologies, the government has announced dedicated incentives for startups working in sectors such as Artificial Intelligence (AI), robotics, quantum technology, space technology, and other emerging fields.
Eligible deep-tech startups can receive prototype assistance of up to ₹20 lakh, seed funding of up to ₹30 lakh, patient capital support of up to ₹100 crore, and financial assistance covering up to 40% of research and development costs.
The initiative is expected to position Uttar Pradesh as a preferred destination for next-generation technology ventures.
Boost for Incubators and Centres of Excellence
The government has also enhanced support for incubators to strengthen the startup ecosystem.
Capital grants for incubators have been increased from ₹1 crore to ₹1.25 crore, while incubators in Purvanchal and Bundelkhand will be eligible for grants of up to ₹1.5 crore. Annual operational grants have also been increased to ₹40 lakh.
In addition, Uttar Pradesh plans to establish 20 new Centres of Excellence (CoEs) focusing on AI, machine learning, robotics, agritech, healthtech, space technology, and other emerging sectors.
Financial assistance for each Centre of Excellence has been increased from ₹10 crore to ₹12 crore.
Startup Mission Directorate to Strengthen Ecosystem
To improve coordination among startups, incubators, investors, and academic institutions, the government will establish a Startup Mission Directorate under the Department of IT & Electronics.
The proposed Uttar Pradesh Startup Mission, to be registered under the Societies Registration Act, will function as the state’s nodal agency for implementing startup initiatives, facilitating industry partnerships, and monitoring policy execution.
According to the government, nearly 17,000 startups are currently registered in Uttar Pradesh, making it one of India’s fastest-growing startup ecosystems.
New Data Centre Policy Targets ₹2 Lakh Crore Investment
The Cabinet also approved the Uttar Pradesh Data Centre Policy-2026, aimed at transforming the state into a green, AI-ready, and globally competitive data centre hub.
The policy targets the creation of an additional 2 Gigawatts (GW) of data centre capacity while attracting investments exceeding ₹2 lakh crore.
The earlier data centre policy had expired in January 2026, making the new framework critical for sustaining momentum in the sector.
Focus on AI Infrastructure and Sustainable Growth
The new policy places special emphasis on GPU-based infrastructure, energy-efficient facilities, and environmentally sustainable operations.
It also introduces incentives for Tier III and Tier IV data centres, AI Compute Booster initiatives, and green data centre operations. Additional benefits have been proposed for projects located in Bundelkhand and Purvanchal to promote balanced regional development.
Officials believe the policy will encourage the growth of IT, cloud computing, artificial intelligence, and digital infrastructure while creating significant employment opportunities.
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Building a Digital and Innovation-Led Economy
The Uttar Pradesh government believes the two new policies will accelerate innovation, attract global technology investments, and strengthen the state’s digital economy. By supporting startups, expanding AI capabilities, and promoting world-class data centre infrastructure, the government aims to create a robust ecosystem that fosters entrepreneurship, drives economic growth, and positions Uttar Pradesh as a leading technology and innovation hub.
Key Highlights
- Uttar Pradesh Cabinet approved the Startup Policy-2026 and Data Centre Policy-2026.
- The decisions were taken in a Cabinet meeting chaired by Chief Minister Yogi Adityanath.
- Monthly startup sustenance allowance has been increased to ₹20,000 for two years.
- Prototype grants and seed funding have been significantly enhanced under the new policy.
- Deep-tech startups in AI, robotics, quantum technology, and space technology will receive special incentives.
- The state will establish 20 new Centres of Excellence focused on emerging technologies.
- A Startup Mission Directorate will be created to strengthen the startup ecosystem.
- The new Data Centre Policy aims to attract over ₹2 lakh crore in investments and add 2 GW of new capacity.
- The policy promotes AI-ready, energy-efficient, and green data centre infrastructure across Uttar Pradesh.