Business EconomyPosted at: Oct 6 2026 6:27PM


Cabinet approves Rs 10,000 crore fund to help SMEs scale up, go global

New Delhi, Oct 6 (UNI) The union Cabinet on Tuesday approved a Rs 10,000 crore government commitment for the SME Growth Fund (SGF), aimed at providing long-term capital to small and medium enterprises (SMEs) and helping them expand into globally competitive businesses.
The initiative is part of the measures announced in the union Budget 2026-27 to strengthen India’s MSME ecosystem by improving access to equity, liquidity and professional support.
The government will commit Rs 10,000 crore to an Alternative Investment Fund (AIF) set up under the SGF framework. The fund will provide long-term equity capital to SMEs that have established business models and the potential to scale.
The scheme seeks to address a financing gap faced by businesses that have moved beyond the early stage but require substantial capital to expand further.
While several existing funding channels cater to startups, micro enterprises and early-stage businesses, established small and medium companies can find it difficult to raise the risk capital needed for their next phase of growth.
A significant portion of the fund will be directed towards manufacturing-oriented SMEs, with the government also looking at businesses operating from industrial clusters in Tier-II and Tier-III cities.
The funding is expected to help eligible companies increase production capacity, adopt new technologies and strengthen their operations.
The government also expects the initiative to support SMEs looking to pursue acquisitions, expand into international markets and become part of global supply chains.
The SME Growth Fund is designed not only to address the shortage of growth capital but also to encourage businesses to invest in productivity-enhancing technologies.
Greater access to equity funding could allow SMEs to undertake expansion projects without relying excessively on conventional debt.
The government expects the scheme to improve the productivity and export competitiveness of Indian businesses, while encouraging more companies to participate in global value chains.
The emphasis on industrial clusters outside major urban centres is expected to provide a further boost to regional manufacturing ecosystems.
By directing capital towards businesses in smaller cities, the scheme could help strengthen local supplier networks, support ancillary industries and generate employment closer to industrial clusters.
SMEs already play a major role in India’s employment generation, exports, manufacturing activity and innovation. However, limited access to patient, long-term risk capital has remained a hurdle for businesses seeking to move to a larger scale.
The government said the fund is aligned with its broader Viksit Bharat 2047 vision, with a focus on innovation-led industrialisation and the creation of globally competitive Indian enterprises.
The initiative is expected to give established SMEs access to capital at a stage where financing requirements are typically larger and longer term, helping them transition from domestic businesses into companies capable of competing in international markets.UNI VK AAB
Tags: #Cabinet approves Rs 10#000 crore fund to help SMEs scale up# go global
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