Business · Companies · 3 hrs ago
Investment in India’s manufacturing startups rises as demand grows
India’s manufacturing startups are attracting more investment and seeing higher demand.
Funding rose from $164 million in 2020 to $1.92 billion so far in 2026, while the number of deals increased from 31 to 127.
The shift follows Covid-related supply disruptions and rising trade tensions, which led businesses to look for alternatives to existing supply chains.
India’s government has also introduced incentives, including the production-linked incentive scheme, to expand domestic manufacturing.
Startups such as Scimplify, which makes specialty chemicals and advanced materials, are seeing demand from sectors including aerospace, defence, solar energy, semiconductors, batteries and electric vehicles.
Its revenue rose from ₹18.3 crore in FY24 to ₹204.3 crore in FY25, according to company filings.
The growth matters because investors and businesses are increasingly treating manufacturing expertise and proprietary technology as valuable, not just factory assets.
Funding for India’s manufacturing startups rose from $164 million in 2020 to $1.92 billion so far in 2026, according to Venture Intelligence.
The number of deals increased from 31 in 2020 to 127 in 2026.
Startups including medical equipment maker Pulse and specialty chemicals manufacturer Scimplify are seeing rising domestic demand.
Investors and companies point to supply-chain shifts, growing demand and government manufacturing policies as factors behind the trend.
Scimplify’s revenue rose from ₹18.3 crore in FY24 to ₹204.3 crore in FY25, according to corporate filings cited in the article.
- Who
- India’s manufacturing startups, investors and companies including Pulse and Scimplify.
- What
- Investor funding and deal numbers have risen, alongside demand for manufacturing startups’ products.
- When
- Funding reached $1.92 billion so far in 2026; the article compares it with 2020.
- Where
- India.
- Why
- Supply-chain disruptions, protectionism, domestic demand and government manufacturing policies are supporting the sector.
This story does not have two clearly opposing sides.
Covid made people realise that having a hedge on the supply side makes a lot of sense.
If you do not have proprietary IP, I will not invest in you.
Now, given the kind of demand we are seeing from investors, I could even do 8 to 10 deals in manufacturing in a quarter compared to 3 to 4 in a quarter earlier.
The US-China trade war began with tariffs targeting Chinese imports.
The pandemic arrived, and funding for manufacturing startups stood at $164 million across 31 deals.
The government introduced the production-linked incentive scheme, covering 14 sectors.
The Trump administration’s reciprocal tariff policy extended tariffs to other trading partners, including India.
Funding reached $1.92 billion across 127 deals, according to Venture Intelligence.
- Startup funding
- $164 million in 2020; $1.92 billion so far in 2026
- Number of deals
- 31 in 2020; 127 in 2026
- Scimplify revenue
- ₹18.3 crore in FY24; ₹204.3 crore in FY25
- Production-linked incentive scheme
- Introduced in 2020; covers 14 sectors
- Scimplify growth claim
- 8X since FY25
Sources
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