India tech funding drops 23 per cent to $10.9 bn in FY26: Tracxn report

India's technology sector saw funding decline in FY26, but investor sentiment signals a gradual recovery as the market stabilises with disciplined investment and focus on fundamentals

India's technology sector raised $10.9 billion in FY26, a drop of 23 per cent compared in FY25 (and a rise of 13 per cent compared to $9.7 billion in FY24), according to Tracxn 'India Tech 2025-26’ report. Funding grew from $11.9 billion in FY19 to $45.8 billion FY22, marking the peak of investment flow in the country's tech ecosystem. This moderated from $17.1 billion in FY23 to $9.7 billion in FY24 as global venture markets tightened and focused investing rose. It again rebounded to $14.2 billion in FY25 before moderating to $10.9 billion in FY26, reflecting disciplined funding allocation.

 

According to the data intelligence platform, investor sentiment for is currently tilted toward improvement, with nearly 74 per cent of respondents expecting conditions to be either slightly better (41 per cent) or much better (33 per cent), indicating a broad-based recovery in confidence. The higher share of “slightly better” responses suggests that this recovery is expected to be gradual, as investors factor in improving sectoral momentum alongside ongoing market adjustments. Overall, the distribution reflects a market entering a more stable phase, where improving sentiment is balanced by disciplined investment behaviour and a continued focus on fundamentals.