The state government plans to encourage innovation and accelerate digital infrastructure development through its latest policy initiatives.
New startup and data center policies aim to strengthen AI, deep-tech, entrepreneurship, and digital infrastructure across the state.
The Uttar Pradesh government has approved the Uttar Pradesh Startup Policy 2026 and the Uttar Pradesh Data Center Policy 2026, introducing a broad package of incentives designed to encourage innovation, attract investment, and generate employment across the state.
The decisions were approved during a Cabinet meeting chaired by Chief Minister Yogi Adityanath. Together, the two policies aim to position Uttar Pradesh as a leading destination for startups, artificial intelligence, deep technology, and digital infrastructure.
Startup Policy 2026 expands financial support.
The new startup policy significantly enhances financial assistance available to entrepreneurs at different stages of growth.
Eligible startups will now receive a monthly sustenance allowance of ₹20,000 for two years, compared with the previous support of ₹17,500 for one year.
The government has also increased prototype grants from ₹5 lakh to ₹10 lakh, while seed funding has doubled from ₹7.5 lakh to ₹15 lakh.
According to IT and Electronics Minister Sunil Sharma, startups may receive seed funding of up to ₹50 lakh under special circumstances.
In addition, the policy offers reimbursement of up to ₹2 crore for patent filing and quality certification, matching grants of up to ₹5 crore, a 4 percent interest subsidy on term loans of up to ₹2 crore, and reimbursement of Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI) contributions.
Strong focus on deep-tech startups
The government has introduced dedicated incentives to support startups working in advanced technology sectors.
Companies developing solutions in artificial intelligence, robotics, quantum technology, space technology, and other emerging fields will be eligible for:
- Prototype assistance of up to ₹20 lakh
- Seed funding of up to ₹30 lakh
- Patient capital support of up to ₹100 crore
- Financial assistance covering up to 40 percent of eligible research and development expenditure
The incentives are intended to encourage the commercialisation of advanced technologies while strengthening Uttar Pradesh’s innovation ecosystem.
More support for incubators and research
The policy also increases funding for startup incubators across the state.
Capital grants have risen from ₹1 crore to ₹1.25 crore, while incubators located in Purvanchal and Bundelkhand will be eligible for grants of up to ₹1.5 crore.
Annual operational support has also increased from ₹30 lakh to ₹40 lakh.
To strengthen research and innovation, the state plans to establish 20 new Centres of Excellence focusing on artificial intelligence, machine learning, robotics, space technology, healthcare, and agricultural technology.
Financial assistance for each Centre of Excellence has increased from ₹10 crore to ₹12 crore.
The government will also establish a Deep-Tech U-Hub, providing startups with access to incubation, investment opportunities, industry partnerships, mentoring, and laboratory infrastructure.
Startup mission to strengthen ecosystem
To improve coordination across the startup ecosystem, the government will establish a dedicated Startup Mission Directorate.
The Uttar Pradesh Startup Mission will operate under the Department of IT and Electronics after being registered under the Societies Registration Act.
The mission will coordinate collaboration among startups, investors, academic institutions, incubators, and Centres of Excellence while overseeing the implementation and monitoring of startup initiatives across the state.
According to the official StartInUP portal, Uttar Pradesh currently has 22,318 Startup India-recognised startups and 3,581 startups recognised under the state’s own StartInUP programme.
Data Center Policy 2026 targets AI-ready infrastructure.
Alongside the startup policy, the Cabinet approved the Uttar Pradesh Data Center Policy 2026, replacing the previous policy that expired in January.
The new framework aims to position Uttar Pradesh as a green, AI-ready, and globally competitive data center hub.
The government has set ambitious targets to develop 2 gigawatts (GW) of additional data center capacity while attracting investments exceeding ₹2 lakh crore.
According to Sunil Sharma, the policy places particular emphasis on GPU-based computing infrastructure, energy efficiency, and environmentally sustainable operations.
Additional incentives have been introduced for projects in Purvanchal and Bundelkhand, as well as for Tier-3 and Tier-4 data centers, AI computing facilities, and green infrastructure.
Building on previous investments
The new policy builds on the state’s earlier data center initiative introduced in 2021 and revised in 2022.
According to the government, seven projects have already become operational under the previous framework, including six data center parks and two standalone facilities, representing investments of approximately ₹21,343 crore.
The government expects the new policy to accelerate the development of Uttar Pradesh’s digital infrastructure while creating employment opportunities across information technology, cloud computing, artificial intelligence, and related sectors.
Driving long-term economic growth
With enhanced financial incentives for startups, expanded support for deep-tech innovation, and a renewed focus on AI-ready digital infrastructure, the Uttar Pradesh government is seeking to position the state as one of India’s leading technology and entrepreneurship hubs.
By strengthening its startup ecosystem and encouraging large-scale investment in data centers, the state aims to attract high-value industries, generate skilled employment, and support long-term economic growth driven by innovation and digital transformation.
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