J&K startups receive Rs 19.35 cr collateral-free loans; seed funding dries up, 41 entities dissolve

Ziraat Times Team Report

New Delhi — Even as Jammu & Kashmir’s startup ecosystem is showing overall positive momentum in financial support, with collateral-free loan guarantees reaching ₹19.35 crore since the launch of the Credit Guarantee Scheme for Startups (CGSS) in April 2023, some areas of concern remain.

The national startup tally under the Department for Promotion of Industry and Internal Trade (DPIIT) has crossed 1.97 lakh, while J&K’s number remains relatively small.

J&K startup landscape & dissolutions

As of October 31, 2025, the Union Territory (UT) of Jammu & Kashmir reported 41 DPIIT-recognized startups categorized as dissolved or struck-off. This figure is part of the national total of 6,385 recognized startups categorized as closed across India.

The Union Minister of State for Commerce & Industry, Jitin Prasada, provided this data in a written reply in the Lok Sabha on Tuesday. The Ministry of Corporate Affairs (MCA) data suggests the government has not observed any overall increase in startup closures, attributing dissolutions primarily to factors such as business model viability, market alignment and the inability to attract funding.

Surge in loan guarantees (CGSS)

The Credit Guarantee Scheme for Startups (CGSS), operational since April 1, 2023, is designed to enable collateral-free loans for startups. Jammu and Kashmir has seen the following guarantee amounts disbursed under this scheme (in ₹ crore, as on October 31, 2025):

Seed Fund Support

The Union Territory also received initial financial assistance for its early-stage ventures through the Startup India Seed Fund Scheme (SISFS). In 2023, an amount of ₹5.25 crore was approved to incubators in Jammu & Kashmir, with ₹2.1 crore disbursed. No further approvals or disbursements were reported for the region in 2024 or 2025 (as of October 31).

National context

Nationally, the DPIIT has recognised a total of 1,97,692 entities as startups under the Startup India initiative as of October 31, 2025. This momentum is supported by three flagship Central Government schemes:

1. Fund of Funds for Startups (FFS): Provides capital to SEBI-registered Alternative Investment Funds (AIFs) to invest in startups, with a corpus of ₹10,000 crore.

2. Startup India Seed Fund Scheme (SISFS): Offers financial assistance to seed-stage startups through incubators.

3. Credit Guarantee Scheme for Startups (CGSS): Provides collateral-free loans via financial institutions.

An official said that the government continues its focus on strengthening the ecosystem, ensuring that recognized entities meet the eligibility criteria outlined in the G.S.R. Notification 127(E) dated February 19, 2019.