Budget 2025 is a big boon for startups and can drive up office space demand, claims report

With a slew of measures introduced in favour of micro, small and medium enterprises (MSMEs) in Budget 2025, access to capital and credit support for startups and MSMEs is set to expand significantly. Startups will be able to take up incremental Grade A office space, particularly flexible spaces, across major office markets in the country, according to a Colliers impact analysis report released on Sunday.

The report stated that this move will “thereby boost innovation and domestic manufacturing capabilities.”

In Budget 2025, Finance Minister Nirmala Sitharaman announced that Alternative Investment Funds (AIFs) for startups will receive a fresh contribution of ₹10,000 crore, in addition to the existing government contribution of ₹10,000 crore.

Additionally, the benefits provided under Section 80-IAC for startups have been extended for another five years, until 2030.

Sitharaman also announced an enhancement in credit guarantee covers for both micro-enterprises and startups. For micro-enterprises, the limit was increased from ₹5 crore to ₹10 crore, while for startups, it was raised from ₹10 crore to ₹20 crore. The guarantee fee for loans in 27 focus sectors has also been moderated.

Furthermore, customized credit cards with a limit of ₹5 lakh will be registered on the government’s UDYAM portal for micro-enterprises.

The Colliers report highlighted that the exemption on customs duty for 35 additional capital goods for Electric Vehicle (EV) manufacturing, along with nil customs duty on critical minerals like lithium, cobalt, and nickel for EV battery production, will lead to “improved domestic battery production capabilities, enhanced cost competitiveness for EV adoption, and manufacturing.”

“EV players, including automobile manufacturers, ancillary product manufacturers, and battery manufacturers, are set to complement the demand for Grade A warehouses,” the report added.