India’s journey towards Atmanirbhar Bharat (Self-Reliant India) places Micro, Small and Medium Enterprises (MSMEs) at the centre of economic growth. To support scalable and growth-oriented MSMEs, the Government of India launched the Self-Reliant India Fund (SRI Fund)—a unique equity support mechanism aimed at strengthening MSMEs with long-term capital.
Unlike traditional loan-based schemes, the SRI Fund focuses on equity infusion, helping MSMEs expand operations, improve competitiveness, and create employment.
What is the Self-Reliant India Fund?
The Self-Reliant India Fund (SRI Fund) is a ₹50,000 crore Fund of Funds (FoF) announced under the Atmanirbhar Bharat Package. It was created to provide equity funding to MSMEs through professionally managed daughter funds.
The fund aims to:
- Strengthen MSMEs’ capital structure
- Enable expansion and scaling
- Encourage MSMEs to list on stock exchanges
- Reduce over-dependence on debt financing
Why Was the Self-Reliant India Fund Launched?
Most MSMEs in India rely heavily on bank loans and credit, which often leads to:
- High debt burden
- Limited growth flexibility
- Difficulty in attracting investors
The SRI Fund addresses this gap by:
- Providing patient capital
- Supporting growth-stage MSMEs
- Helping businesses move from small to medium and medium to large enterprises
Key Features of the Self-Reliant India Fund
1. Fund of Funds Structure
- Total corpus: ₹50,000 crore
- Government contribution: ₹10,000 crore
- Additional funds mobilised from private investors
2. Managed by NSIC
The fund is managed by NSIC Venture Capital Fund Ltd. (NVCFL), a subsidiary of the National Small Industries Corporation (NSIC).
3. Equity-Based Support
- No collateral
- No EMI pressure
- Focus on long-term value creation
4. Growth-Oriented MSMEs
The fund targets MSMEs with:
- Proven business models
- Revenue traction
- High growth potential
How Does the Self-Reliant India Fund Work?
The SRI Fund does not invest directly in MSMEs.
Instead:
- The Mother Fund invests in multiple Daughter Funds
- Daughter Funds are managed by SEBI-registered Alternative Investment Funds (AIFs)
- These AIFs invest equity in eligible MSMEs
This professional fund management ensures:
- Better governance
- Strategic guidance
- Sustainable growth for MSMEs
Eligibility Criteria for MSMEs
An MSME may be considered for SRI Fund investment if it:
- Is Udyam registered
- Falls under Micro, Small or Medium Enterprise definition
- Has growth potential and scalability
- Demonstrates sound financial and governance practices
- Operates in manufacturing, services, or technology-enabled sectors
Note: Final eligibility depends on the investment criteria of the respective Daughter Fund.
Benefits of Self-Reliant India Fund for MSMEs
1. Strengthens Net Worth
Equity infusion improves balance sheets and creditworthiness.
2. Enables Expansion
Funds can be used for:
- Capacity expansion
- Technology upgrade
- Market penetration
- Product diversification
3. Reduces Debt Dependency
Unlike loans, equity funding:
- Has no repayment pressure
- Improves financial stability
4. Prepares MSMEs for Listing
The fund encourages MSMEs to:
- Improve compliance
- Adopt better governance
- Move towards IPO readiness
5. Employment Generation
Scaling MSMEs lead to job creation, aligning with national economic goals.
How Can MSMEs Access the SRI Fund?
MSMEs cannot apply directly to the Government.
Instead, they should:
- Identify Daughter Funds / AIFs supported by SRI Fund
- Prepare:
- Business plan
- Financial statements
- Growth roadmap
- Approach fund managers for equity investment
Strong documentation and scalability story significantly improve chances.
How to Apply for Funding
Since the SRI Fund does not invest directly in MSMEs, you must approach the Empanelled Daughter Funds. Here is the step-by-step process:
- Prepare a Pitch: Develop a detailed business plan, financial forecasts, and a clear “use of funds” strategy.
- Identify the Right Fund: Visit the NVCFL website to see the list of empanelled Daughter Funds (e.g., SBI Ventures, Tata Capital, etc.).
- Due Diligence: Once you approach a Daughter Fund, they will conduct rigorous business, legal, and financial due diligence.
- Equity Agreement: If approved, the Daughter Fund will infuse capital into your business in exchange for a minority equity stake.
Self-Reliant India Fund 2026 Update
In the Union Budget 2026-27, the government proposed an additional ₹2,000 crore (with some sources noting a broader ₹4,000 crore infusion for FY27) to the existing Self-Reliant India Fund.