India’s startup ecosystem has experienced remarkable growth in recent years. The country now boasts the world’s third-largest startup ecosystem, with over 77,000 startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) as of December 2024. This represents a significant increase from just 502 startups in 2016.
Major hubs like Bengaluru, Hyderabad, Mumbai, and Delhi-NCR are leading this expansion. Interestingly, over 51% of startups now come from Tier II and III cities, reflecting nationwide entrepreneurial growth. The Indian government has launched several key schemes and initiatives to support this growth.
Startup India aims to foster innovation, create employment, and boost economic growth. Over 17.28 lakh jobs have been created, with key contributions from IT services, healthcare, and professional services. Notably, 75,935 startups have at least one woman director.
The Startup India Seed Fund Scheme (SISFS) was launched with a Rs 945 crore corpus to support early-stage startups. By 2024, 213 incubators have been approved, benefiting 2,622 startups. The Fund of Funds for Startups (FFS), managed by the Small Industries Development Bank of India (SIDBI), channels funds to SEBI-registered Alternative Investment Funds (AIFs), which then invest in startups.
By 2024, 1,173 startups have been funded through this initiative.
India’s thriving startup landscape
The Atal Innovation Mission (AIM), launched in 2016 to promote innovation and ecosystem-building, has set up numerous Atal Tinkering Labs and incubated 3,556 startups, creating 41,965 jobs.
The Credit Guarantee Scheme for Startups (CGSS) provides credit guarantees for loans to DPIIT-recognized startups. As of January 2025, Rs 604.16 crore in loans have been guaranteed, including Rs 27.04 crore for women-led startups. The MeitY Startup Hub (MSH), a central platform under the Ministry of Electronics and Information Technology (MeitY), supports over 5,310 tech startups.
Despite these initiatives, Indian startups face several challenges. Infrastructure deficiencies, particularly in smaller cities and rural areas, pose significant obstacles. Most Indian startups focus on consumer services, unlike China’s deep-tech ventures, reflecting structural economic trends.
There is also a shortage of domestic investors willing to invest in high-risk, long-term ventures, leading to funding challenges. India’s R&D investment is just 0.64% of GDP, limiting innovation in high-tech sectors. To boost the startup ecosystem, the government is fostering industry-institution-academia linkages, providing outcome-based grants, and supporting startups in scaling innovation for global reach.
Focusing on eco-friendly solutions and developing and retaining talent are also key priorities. India’s startup ecosystem is thriving, but to fully realize its potential, the country must reform its manufacturing sector and enable startups to drive industrial transformation and global competitiveness. With a clear roadmap, the ecosystem is poised for continued success.
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