Uttar Pradesh state cabinet has approved the Uttar Pradesh Startup Policy 2026, the Uttar Pradesh Data Centre Policy 2026 and the creation of a dedicated Startup Mission Directorate.
The measures are aimed at attracting fresh investment, supporting startups in their early stages and building an AI-ready data centre ecosystem that also supports India’s expanding semiconductor value chain. The approvals came during a cabinet meeting chaired by Chief Minister Yogi Adityanath.
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Dedicated Startup Mission to lead the ecosystem
The new Startup Mission Directorate will operate as an independent body under the Department of IT and Electronics, replacing the existing arrangement under the UP Electronics Corporation. Headed by a Chief Executive Officer (CEO), it will serve as the state’s nodal agency to coordinate startups, incubators, Centres of Excellence (CoEs), investors and academic institutions while driving innovation-led growth.
The government believes the move will strengthen institutional support and contribute to its target of building a $1 trillion economy by 2030.
The Startup Policy 2026 significantly extends financial support. The incubation period has been extended from 1 year to 2 years, while the monthly sustenance allowance has been increased from ₹17,500 to ₹20,000 for the full 2-year period.
Prototype grants have doubled to ₹10 lakh, seed funding has risen from ₹7.5 lakh to ₹15 lakh and may reach ₹50 lakh in exceptional cases.
Also Read: Uttar Pradesh Moves Ahead on ‘Startup Goals’ With New Excellence Centres
Stronger incentives for deep-tech and emerging sectors
The policy places greater emphasis on deep-tech ventures, including startups working in artificial intelligence, advanced electronics and semiconductor-related technologies.
These firms will be eligible for prototype assistance of up to ₹20 lakh, seed funding of ₹30 lakh, patient capital support of up to ₹100 crore, and research and development matching grants of up to 40%.
Additional incentives have also been announced for startups led by women, economically weaker sections and transgender entrepreneurs holding at least a 51% stake.
Businesses operating in Bundelkhand and Purvanchal, or working in agritech, circular economy, waste management, sustainability, renewable energy and climate technologies, will receive enhanced benefits.
The policy further provides up to ₹2 crore for patent filing and quality certification, matching grants of up to ₹5 crore, a 4% interest subsidy on term loans up to ₹2 crore, and reimbursement of EPF and ESI contributions.
Also Read: Uttar Pradesh Approves ₹70 Crore U-Hub to Boost Startup Ecosystem
New data centre policy targets ₹2 lakh crore investment
The cabinet also approved the Uttar Pradesh Data Centre Policy 2026, replacing the previous framework with a sharper focus on AI infrastructure, sustainability and large-scale investment. The state aims to add 2 GW of data centre capacity while attracting more than ₹2 lakh crore in investment.
The policy offers incentives across data centre parks, standalone data centre units and edge data centres, including concessions on land, capital subsidies, interest subsidies, stamp duty rebates and electricity charges.
Projects exceeding 500 MW may receive customised incentive packages. The government has also introduced measures to encourage GPU-based AI computing infrastructure, green operations and energy-efficient facilities, with additional incentives for projects in Bundelkhand and Purvanchal.
Also Read: HCL-Foxconn Picks CTCI as EPC Partner for Uttar Pradesh Semiconductor Plant
Why the announcement matters?
The twin policies underline Uttar Pradesh’s ambition to become a major destination for AI, cloud computing, digital infrastructure and semiconductor-linked investments.
As demand for high-performance computing and local data storage grows, stronger startup support alongside expanded data centre capacity could help attract technology companies, create skilled jobs and reinforce India’s wider digital economy ambitions.
The approvals signal a more coordinated approach to startup funding and digital infrastructure in one of India’s fastest-growing states. If implemented on schedule, the policies could strengthen Uttar Pradesh’s position in AI, cloud services, semiconductor-enabled innovation and next-generation enterprise technology.
Samarjit Kaur is a journalist and communications professional covering technology & emerging digital trends. With a focus on clarity and context, she reports on developments shaping industries and governance. When not reporting, she chooses to plug-in and relax on her playlists and plan her next bucket-list trips!
