Andhra Pradesh Innovation & Startup Policy 4.0 (2024-29)
Up to ₹20 L
Phase-Wise Grant for Special-Category-Led Startups
Up to ₹1 Cr
Need-Based Seed Funding — Deeptech & Advanced Tech
100%
SGST Reimbursement for Startups for 5 Years
20,000
New Startups Targeted, Creating 1 Lakh Jobs
Why the policy exists
Startup grants of up to ₹15 Lakh (₹20 Lakh for women/BC/SC/ST/minority/differently-abled-led startups), need-based deeptech seed funding up to ₹1 Crore, equity-based seed and go-to-market support of up to ₹50 Lakh each, 8% interest subsidy, 100% SGST reimbursement for 5 years, patent and accelerator cost support, and one-year rental subsidy — delivered through the Ratan Tata Innovation Hub (Amaravati) and 5 regional Spoke Centers, targeting 20,000 new startups and 1 Lakh jobs
Andhra Pradesh introduced India's first Startup and Innovation Policy in 2014. The earlier framework — startup support bundled inside the AP IT Policy 2021-24 — lapsed on 30 September 2024, and the AP Innovation & Startup Policy 4.0 (2024-29) is now the dedicated successor. The vision: position AP as a Global Startup Hub for Innovation, Incubation & Entrepreneurship, offering Visakhapatnam, Kakinada, Vijayawada, Tirupati, Anantapur and Kurnool as viable alternatives to the Bengaluru–Delhi–Mumbai concentration (which absorbed 89% of India's ~USD 150 Billion startup investment over 2014-24).
Quantified Targets (Policy Period)
| Parameter | Target |
|---|---|
| New startups | 20,000 in 5 years |
| Employment in the startup ecosystem | At least 1 Lakh |
| Scale-ups | 20 Soonicorns and 10 Unicorns |
| Centers of Excellence | Creation/expansion of 10 CoEs — Deeptech (AI/ML), Blockchain, XR (VR/AR), IoT, Quantum Computing, Climate Tech, Healthtech/Biotech/Lifesciences/MedTech, Advanced Manufacturing (3D printing, robotics, nanotech), Automotive/EV, Cybersecurity & Cloud |
| Government as first customer | 15 key departments to allocate ₹10–20 Crore budget per year each to work with startups and implement at least 25 Proof of Concepts per department per year via innovation challenges and hackathons |
The 15-department POC mandate — spanning IT, Industries, Agriculture, Civil Supplies, Panchayati Raj, Transport, Energy, Infrastructure, Health, MA&UD, Real Time Governance, Home, School Education, Higher Education and Environment — makes the Government of AP itself a recurring procurement channel for startups. For product startups, this is often more valuable than the grants.
Notified vide G.O.Ms.No.3, ITE&C (Promotion Wing) Department, dated 24.03.2025 | Nodal Agency: AP Innovation Society (APIS) | Valid for 5 years from policy notification, or till a new Policy is announced
Who qualifies, and what already exists
Definitions
- •Startup — as defined by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, Government of India.
- •Innovation — creation and implementation of new ideas to beget a product, service, process, or complete business model.
- •Incentives apply to both startups incubated in the hubs and individual startups; new startup founders, incubators and existing startup founders may all apply.
Existing Ecosystem Base
| Parameter | Status |
|---|---|
| Startups in AP | 6,658 — of which 2,400 DPIIT-recognised and 1,159 women-led |
| Incubators | 46 (9 in government institutes, 1 private-sector, rest in private universities/colleges) |
| Existing CoEs | 6 — IoT & AI (Andhra University, Visakhapatnam), Rural Innovation (SKD University, Anantapur), Maritime & Shipping (Ministry of Ports, Kakinada), Industry 4.0 (Kalpataru/STPI, Visakhapatnam), Biotech and Medical Devices (AMTZ, Visakhapatnam) |
| APIS incubation space | ~1 Lakh sq. ft. of subsidised facilities in Visakhapatnam, Kakinada, Tirupati and Vijayawada/Guntur |
| Sector concentration | IT Services 27%, Agriculture 16%, Healthcare & Lifesciences 14%, Education 12%, Construction 12%, Food & Beverages 10%, Professional & Commercial Services 8% |
DPIIT recognition is the gateway definition — a startup advisory file should begin with Startup India registration, then AP Startup One portal registration, before any State incentive claim.
The delivery architecture
Structure
- •Ratan Tata Innovation Hub (RTIH) at Amaravati — the State hub, supported by a Deeptech CoE, Global Leadership Center and Real Time Governance Society (RTGS).
- •5 Spoke Centers — Rajahmundry (Godavari), Vijayawada (Central Andhra), Visakhapatnam (Uttara Andhra), Tirupati (South Andhra) and Anantapur (Rayalaseema) — loosely affiliated to the Hub but fully independent in decision-making, focused on ground-level implementation for local sectors.
- •Governance: Board of Governors (promoter-president, co-promoters, independent experts, Government/academia/industry representatives; 2-3 year terms) with an Executive Committee (CEO/CFO/COO) and dedicated Investment, Incubation & Acceleration, Ecosystem Development, Finance and Marketing teams.
Government Funding to the Hub & Spokes
| Grant | RTIH | Each Spoke Center |
|---|---|---|
| Seed capital grant (kickstart) | ₹50 Cr | ₹30 Cr |
| Capital grant over 5 years (performance-based) | Up to ₹250 Cr | Up to ₹100 Cr |
Twin funding model — corporate (promoter/co-promoter contributions, CSR, donations) plus Government — with grant money usable for temporary facilities, permanent campuses, staffing/administration and direct funding support to startups. Centers are expected to become self-sustainable, including through equity earned on startup investments. Program fees may be charged for services.
What the Centers Offer
- •RTIH: incubation, VC funding handholding, CoEs for AI and emerging tech, high-performance computing, MSME facilitation centre, banking linkages, market linkages, raw-material sourcing support, prototyping centre, outdoor testing tracks, semiconductor cleanroom, robotics labs, EV/autonomous vehicle tracks, 5G testbeds, cybersecurity sandbox, and a global network of universities, IFIs, VC networks, corporates and research labs.
- •Spokes: sectoral incubation and funding, regional mentor networks, MSME help desks, fab labs and tinkering labs, banking/government-scheme linkages, feasibility and prototyping support for MSMEs, tech partnerships via trade agencies/IFIs (USTDA, KOTRA), and the “One Family – One AI Use Case” initiative.
Incentive quantum — exact figures
A. Grants for Students & Startups
| Incentive | Quantum | Conditions |
|---|---|---|
| Startup Grant (idea → PoC → product viability) | Upfront initial grant up to ₹2 Lakh; phase-wise grant up to ₹15 Lakh | Released phase-wise on performance at the previous stage, until product viability; total capped at ₹15 Lakh per startup |
| Grant for startups led by Women / BC / SC / ST / Minority / Differently Abled & Others | Up to ₹20 Lakh | Phase-wise on performance; total capped at ₹20 Lakh per startup |
| Grand challenges / hackathons | Prize money as announced per challenge | Launched by Spoke Centers or GoAP departments; Spokes facilitate participation |
B. Funding & Debt Support
| Incentive | Quantum |
|---|---|
| Interest subsidy | 8% on term loan, for 3 years |
| Seed funding with equity | Up to ₹50 Lakh, on an equity-sharing model |
| Go-to-market support | Up to ₹50 Lakh, on an equity-sharing model |
| Need-based seed funding — Deeptech & Advanced Tech startups | Up to ₹1 Crore |
C. Operational Reimbursements
| Incentive | Quantum | Limits |
|---|---|---|
| Events / fairs (registration, travel, lodging, boarding) | 75% of cost, up to ₹3 Lakh | Maximum 1 event per year per startup |
| Accelerator program fee reimbursement | 50% of fee, up to ₹2 Lakh per program | Maximum 2 programs per startup |
| Patent filing cost | 50% of expenses — up to ₹2 Lakh (India patent), ₹10 Lakh (foreign patent) | — |
| SGST reimbursement | 100% for startups | For 5 years |
| Rental subsidy for workstations | 100% rental subsidy in notified co-working / neighbourhood work / MSME Parks | For 30 employees, for one year |
D. Support for Incubators
| Beneficiary | Incentive |
|---|---|
| Select new or existing Incubators / CoEs / Accelerators in Government universities or educational institutes in the State | Up to 100% matching grant under any Government of India scheme, limited to ₹50 Lakh |
The seed funding and go-to-market support (₹50 Lakh each) are equity-sharing instruments, not grants — founders must model the dilution before applying. Cap tables, valuation workings and the grant-vs-equity trade-off are exactly where a CA-led advisory adds value at this stage.
Passport, portal and ecosystem access
- •AP Innovation Passport (APIP): any organisation receiving GoAP financial support for setting up or expanding facilities must provide unrestricted access to all startups registered on the AP Startup One portal — effectively opening every State-supported lab, CoE and facility to registered startups.
- •AP Startup One Portal: one-stop platform for startups, incubators, investors and mentors — sectoral policy information, single-window application for benefits under this and other State policies, events, procurement opportunities, and a dynamic grievance-redressal workflow escalating up to the CEO of APIS. Integrated with the Startup India portal for live data capture, with further central/state portal integrations planned.
- •Real-time application status tracking, notifications of new funding opportunities and policy changes, and direct contact channels (helpline, email) for authorities, mentors and support staff.
How a startup seeks State assistance
- •Route 1 — RTIH / Spoke Centers: approach the Hub or the regional Spoke for handholding across mentoring, financing, marketing, skilling and incubation at every growth stage.
- •Route 2 — AP Startup One portal (direct):
- •Route 2 — Assistance requests: funding applications (loans, equity investments), mentorship requests, incubation services (state-owned or private incubators), legal/marketing/technology support.
- •Route 2 — Government schemes: financial aid (grants, subsidies, low-interest loans), infrastructural support, regulatory/compliance guidance, and other innovation initiatives.
Grant amounts are released phase-wise against performance at the previous stage — the claim is not a one-time filing but a milestone-documentation exercise across the startup's life until product viability. Build the evidence trail (stage-gate reports, utilisation certificates, traction metrics) from the first tranche.
Bodies governing the policy
| Body | Role |
|---|---|
| AP Innovation Society (APIS) | State Nodal Agency (incorporated 2015 vide G.O.Ms.No.24 dated 08.12.2014, under ITE&C Department) — to be strengthened with regional units and city centres; assists departments and regional centres with POCs, hackathons and startup challenges; supports RTIH/Spokes in coordinating initiatives and incentive claims; submits AP's data for DPIIT State Startup Ranking and EoDB; identifies private operators to run state-owned incubators on PPP mode. |
| RTIH & Spoke Centers | Operational delivery arms for incubation, funding, mentorship and ecosystem programs (structure in Section 3). |
| IT, E&C Department | Administrative department; will notify the operational guidelines for availing incentives. |
Key dates and durations
| When | What |
|---|---|
| 2014 | AP introduces India's first Startup and Innovation Policy; APIS constituted vide G.O.Ms.No.24 dated 08.12.2014 (incorporated 2015). |
| 30/09/2024 | AP IT Policy 2021-24 — which carried the earlier startup support and incentives — lapses. |
| 24/03/2025 | AP Innovation & Startup Policy 4.0 (2024-29) notified vide G.O.Ms.No.3, ITE&C (Promotion Wing) Department, with Finance Department concurrence. |
| 5 years | Policy validity from notification, or till a new Policy is announced; extendable by the Government. Amendments apply prospectively and cannot curtail benefits already granted. |
| 3 years | Interest subsidy period on term loans (8%). |
| 5 years | SGST reimbursement window for startups (100%). |
| To be notified | Operational guidelines — definitions and procedures for availing incentives — to be issued separately by the IT, E&C Department. |
Operational guidelines are yet to be notified — application formats, disbursement mechanics, the equity-sharing terms for seed/go-to-market funding, and the selection criteria for the ₹1 Crore deeptech funding are all Indicative until then. Verify with APIS / AP Startup One portal before committing timelines or amounts to a founder client. The policy period is styled 2024-29 although the G.O. issued on 24.03.2025 — confirm the effective start date for any time-limited claim when guidelines arrive.