Arunachal Pradesh Startup Policy 2022-23
Why the policy exists
Notified vide No. PD/INVEST-17/2021-22 (14107), Dept. of Finance, Planning & Investment, dated 20.06.2022, on recommendation of the State Cabinet meeting held 30.05.2022. Nodal: Investment Division. Effective for 5 years from date of notification, until modified.
The Vision: "To transform Arunachal Pradesh into a global hub for innovation and entrepreneurship by providing holistic support to local startups through proactive policy intervention and creation of a network of key ecosystem stakeholders." The Mission aligns with the Atmanirbhar Bharat Mission, unlocking innovation, employment generation and social transformation through entrepreneurship.
Mission Components
- •Create awareness of entrepreneurship as a career choice for youth.
- •Provide holistic fiscal and non-fiscal support to aspiring and seasoned entrepreneurs.
- •Facilitate a network of ecosystem stakeholders to support local entrepreneurs.
- •Form a dedicated nodal team to operationalize and keep the policy updated to evolving needs.
Policy Objectives
- •Develop a robust State startup ecosystem within the next five years.
- •Boost innovation and R&D capability of the State.
- •Institutionalize funding support, regulatory easing and public-procurement preference for startups.
- •Bolster entrepreneurship to support State development goals, including the SDGs.
- •Make startups a key component of the State's commercial fabric within five years.
Scope & Policy Period
The policy provides incentives over and above the Startup India Action Plan of the Government of India. Where the same benefit is listed in another State policy, it may be availed under only one policy. The policy is effective for 5 years from the date of notification, until modified.
Policy Targets (within the policy period)
| Target | Detail |
|---|---|
| Incubation Centres | Establish at least 1 Incubation Centre in the State; setup in at least 50% of districts within 5 financial years |
| Startups Facilitated | At least 250 startups in the State |
| Funding | Attract funding for State startups and incubators |
| Employment | Create significant direct and indirect employment through startups |
Who qualifies, and how the policy is administered
Definition of "Startup"
An entity is eligible to be recognized as a Startup under this policy if it is recognized under the Startup India initiative by the Central Government (DPIIT), AND is incorporated/registered in Arunachal Pradesh or registered with the GST Commissionerate in Arunachal Pradesh.
Other Key Definitions
| Term | Meaning (as per policy) |
|---|---|
| Accelerator | Organization/programme enabling rapid startup growth via mentoring, training, resources and networking |
| Co-working Space | Shared office space model with plug-and-play workstations, shared equipment, high-speed internet and meeting rooms |
| Incubator | Registered entity (Society under 1860 Act / Section 8 Company / Private or Public Company under Companies Act 2013 / LLP under 2008 Act) supporting early-stage startups |
| SISFS | Startup India Seed Fund Scheme, notified by DPIIT, Ministry of Commerce & Industry, on 21.01.2021 |
| University / HEI | Institution established under Central/State Act or recognized by UGC/equivalent Central body |
Four Pillars of the Policy
- •Ecosystem: Digital environment for licenses, permits, approvals, clearances and NOCs without physical touchpoints, plus a dedicated helpline.
- •Incubation: Incubation centres providing technological, management, administrative and marketing support, with access to SISFS seed funds via State-registered incubators.
- •Academia: Innovation kits, boot camps and skill-development tie-ups to build an entrepreneurship culture from an early stage.
- •Incentives: Fiscal and non-fiscal support to help entrepreneurs mature their ideas into full-fledged ventures.
Governance Structure
| Body | Role | Chair / Key Members |
|---|---|---|
| Startup Advisory Body | Apex body — annual review, policy modification, appoints members of both bodies | Chairperson: Hon'ble Chief Minister; Vice-Chair: Hon'ble Minister, Planning & Investment; Member Secretary: Commissioner/Secretary, Planning & Investment |
| Startup Council | Monthly/bi-monthly review — empanelment of mentors/incubators, startup selection for seed fund, evaluation of partner incubators | Chairperson: Chief Secretary; Member Secretary: Director/Joint Director, Investment & State Nodal Officer-cum-CEO |
| Nodal Agency | Day-to-day implementation, Startup Portal, grievance redressal, incentive operationalization, SPI monitoring, incubator facilitation, IEC activities | Investment Division, Department of Finance, Planning & Investment |
| Nodal Officer | Single point of contact for all startup-related matters; administrative/financial powers on par with any head of office | Director/Joint Director, Investment Division |
Grant-based incentive quantum
| Incentive | Quantum | Cap / Cohort Target |
|---|---|---|
| Idea Support Grant (annual entrepreneurship challenge) | Top 10 winners: ₹5,00,000 + incubation offer; Next 40 winners: ₹4,00,000 + pre-incubation offer | 50 startups selected per year, 5 years |
| Proof of Concept (PoC) Support — via SISFS | Up to ₹20,00,000, milestone-based disbursement | Via State-registered incubators applying to SISFS |
| PoC Support — State fallback (non-SISFS) | Up to 100% of capital expenditure for PoC/prototype/product trials | Cap ₹10,00,000; target 100 startups over 5 years; recoverable if milestones unmet |
| R&D Incentive | Up to 50% of capital cost of research expenses | Cap ₹5,00,000; target 50 startups over 5 years |
| Patent Cost Reimbursement — Indian patent | Up to 100% of filing/prosecution cost | Cap ₹10,000 per patent; target 100 startups |
| Patent Cost Reimbursement — International patent | Up to 100% of filing/prosecution cost | Cap ₹1,00,000 per patent; target 50 startups |
| Quality Certification Reimbursement (BIS/ISO/CMMI/FSSAI/AGMARK/Hallmark/Silk Mark/ZED etc.) | One-time, up to 100% of certification cost | Cap ₹5,00,000 per startup; target 100 startups |
| Domicile Incentive (fully domicile startups — people, product, market, impact confined to State) | One-time grant, partial lease-rental reimbursement for 1 year (may include power/internet/software/cloud costs) | Cap ₹1,00,000; target 50 startups; strict evaluation-committee scrutiny |
| Recruitment Incentive (women & differently-abled, State-domicile employees) | One-time, up to 40% of 1-year salary cost, paid after 1 year of continuous employment | Cap ₹40,000 per hire; target 150 startups |
| Scale-Up Grant — via SISFS | Up to ₹50,00,000 as convertible debentures/debt/debt-linked instrument | Via State-registered incubators applying to SISFS |
| Scale-Up Grant — State fallback (non-SISFS, high employment-potential products) | Up to 75% of scale-up cost (raw material, marketing, commercialization) inclusive of PoC/Idea Support already availed | Cap ₹25,00,000; target 25 startups; recoverable if milestones unmet |
| Digital Up-scaling Subsidy (hardware/software, preference to AI/ML/blockchain) | One-time reimbursement | Cap ₹10,00,000 per startup; target 25 startups |
Arunachal Pradesh Innovation & Investment Park — equity-linked funding
APIIP is the umbrella organization of all State-sponsored incubators, set up under the Arunachal Pradesh Investment Agency (APIA) within the Investment Division. It facilitates the incubation framework and takes equity investments in selected, incubated startups — only for startups that have completed the full course of incubation support at a State-registered incubator.
Equity-Linked Incentives
| Fiscal Incentive | Value of Financial Assistance | Value Considered for Equity |
|---|---|---|
| Proof of Concept (PoC) | Up to ₹10 Lakh | Up to ₹15 Lakh |
| Scale Up Grant | Up to ₹25 Lakh | Up to ₹30 Lakh |
| Digital Upgradation Subsidy | Up to ₹10 Lakh | Up to ₹15 Lakh |
An additional lumpsum of ₹5 Lakh is added to the equity-value calculation (to compensate for incubation support received). Note: these APIIP-equity figures (₹10L/₹25L/₹10L financial assistance) differ from the fiscal-incentive figures in the Fiscal Incentives section (₹10L PoC / ₹25L Scale-Up / ₹10L Digital Upscaling) — read both together for a startup routed through APIIP incubation.
Equity Determination & Exit
- •Step 1: Startup valuation by a certified valuer.
- •Step 2: Incentive amount decided by the evaluation committee.
- •Step 3: APIIP share % = (Incentive + ₹5L) / (Incentive + ₹5L + Startup Valuation), capped at 10% regardless of incentive value — APIIP remains a minority shareholder with no management role and liability limited to the assistance amount paid (no loan guarantees).
- •Lock-in: Minimum 2 years — neither startup nor APIIP can buy out/liquidate shares during this period.
- •Buy-back: Startup may buy back APIIP shares at current value any time after 2 years, in one tranche or spread over up to 2 years.
- •Takeover/IPO: APIIP exits by encashing equity at current value.
Arunachal Pradesh Seed Fund — Structure
| Fund | Purpose |
|---|---|
| Idea Support Fund | Early-stage support via annual entrepreneurship challenges, grant-in-aid, incubation/acceleration arrangement |
| Innovation Fund | Intermediate-stage support — research, proof of concept |
| Infrastructure Fund | Final-stage support — infrastructure to scale up and launch, emphasis on digital infrastructure (cloud, internet) |
| Startup Fund of Funds | Investment into venture funds investing in startups across sectors — no direct State Government investment into this fund |
| CSR Fund | Channel for private/public corporation CSR funds to incubators, accelerators and startups — no State Government investment |
| Angel Investment Network | Mobilizes domestic capital via local HNI investors; Government conducts investor sensitization workshops |
Total corpus: ₹10 Crore initial, ₹50 Crore over 5 years, targeting 250+ entrepreneurs. All funds sit under the Investment Division, operated jointly by the Secretary (Planning & Investment) and Director/Joint Director (Investment Division), managed under Startup Council advisory, with a professional fund manager to be appointed via open bidding.
Ecosystem-building infrastructure
Digital Infrastructure — Startup Portal
A one-stop Startup Portal will provide: information dissemination (policy, stakeholder details, approvals/clearances, incubator/accelerator/mentor lists, funding and procurement procedures), grievance redressal (dedicated email/helpline, 2-working-day turnaround from the Investment Division), online startup registration with API integration to the Startup India portal, and access to non-sensitive Government data (subject to ethical/institutional clearance).
Incubator & Co-working Networks
- •Arunachal Pradesh Incubator Network: Government partners with HEIs and private players for new/upgraded incubation centres, with capacity building and a common collaboration portal; free/subsidized incubation for State-registered startups.
- •Co-working Space Network: Target of at least one co-working space in every district within 3 years, prioritizing districts with limited startup infrastructure; free or subsidized access for registered startups.
- •Selection criteria and grant rules for both networks are defined by the Startup Council.
Mentorship
The Investment Division empanels startup mentors (via incubators and HEIs) across business model development, funding strategy, company registration, accounting & taxation, legal and digital marketing — hosted on the Startup Portal, available to startups free of cost. Mentors also run ideation workshops, especially for student entrepreneurs.
Academic Interventions
| Intervention | Detail |
|---|---|
| MOOC Credits | HEIs encouraged to award credits for certified entrepreneurship MOOCs as elective options |
| Entrepreneurship Cells (e-Cells) at HEIs | Funding support up to ₹25 Lakh per HEI per year for 5 selected HEIs — one-time setup grant plus annual activity reimbursements |
| Final Year Project Consideration | Attendance relaxation, grace marks, and option to count the startup as the final-year project towards degree completion |
| Deferred Placement | Student entrepreneurs taking a Gap Year may sit for University/College placements after one year |
| Startup Internships | HEIs tie up with startups, incubators and accelerators nationally for internship placements |
| Professional Training & Certification Support | Subsidized empanelled training with partial reimbursement — ₹70,000 per startup, covering 250 startups |
Procurement preference, compliance relief and inclusion
Public Procurement Support
| Incentive | Detail |
|---|---|
| Purchase Preference | Minimum 20% of goods/services procured by AP Ministries/Departments/PSUs (where available from startups) reserved for eligible State-registered startups, per the Public Procurement Policy for MSEs — startups get MSE-equivalent benefits |
| Relaxation of Procurement Norms | Exemption from prior-experience, prior-turnover, EMD and Bid Security criteria, per amendment to Rule 170(i) of the General Financial Rules (GFR), 2017 |
| GeM Startup Runway | DPIIT-recognized startups can register and sell directly to Government Departments via GeM; Departments/PSUs encouraged to procure through this channel |
| Trial Orders | Opportunity for a startup to fulfil a trial order, letting Government buyers test never-before-seen products before full procurement |
Self-Certification & Inspection Exemption
Eligible startups are exempted from routine inspection (barring complaint-driven inspections) under: Building & Other Construction Workers Act 1996 · Inter-State Migrant Workmen Act 1979 · Payment of Gratuity Act 1972 · Contract Labour (Regulation & Abolition) Act 1970 · EPF & Miscellaneous Provisions Act 1952 · ESI Act 1948 — self-certification in the prescribed format is permitted instead.
Support to Women-Led Startups
- •Entrepreneurship Centre for Women (ECW): Dedicated hub for mentorship, capacity building and a dedicated annual/bi-annual incubation-acceleration programme for women entrepreneurs.
- •Funding Reservation: Minimum 33% of the Arunachal Pradesh Seed Fund is dedicated to eligible women-led startups (women as Founder/Co-Founder/COO or equivalent).
Ecosystem Mobilization Activities
Networking events, Annual Entrepreneurship (Grand) Challenges, an Annual Startup Festival (investor pitching, masterclasses, panels, exhibitions), and financial support (travel/lodging) for selected startups to attend national and international startup events.
Key dates and durations
| Date / Duration | Milestone |
|---|---|
| 30/05/2022 | State Cabinet meeting recommends notification of the Arunachal Pradesh Startup Policy. |
| 20/06/2022 | Governor of Arunachal Pradesh notifies the Arunachal Pradesh Startup Policy 2022-23, vide No. PD/INVEST-17/2021-22 (14107), Department of Finance, Planning & Investment (Investment Division), Itanagar. Policy comes into force from date of issue. |
| 5 years | Policy period from date of notification, until modified — covers all quantified targets (incubation centres, 250 startups, seed fund deployment). |
| 3 years | Target for at least one co-working space operational in every district of the State. |
| 2 years | Minimum lock-in period for APIIP equity holdings in incubated startups before any buy-back or liquidation. |
| Annual | Idea Support Grant challenge (50 startups/year), Startup Advisory Body annual review, and the Annual Startup Festival recur on this cycle through the 5-year policy period. |