Startup India is a flagship initiative of the Government of India, launched on 16 January 2016, with focus on innovation, entrepreneurship, and goal of building a reliable startup ecosystem.[1][2] The programme is managed by the Department for Promotion of Industry and Internal Trade (DPIIT) and handles regulatory frameworks, funding support, and linkages between academia and industry.[3]
Main objectives of Startup India include simplification of compliance procedures and facilitating access to funding via tax exemptions, grants, and venture capital.[4][5] It also includes promotion of innovation through incubators, hackathons, and academic partnerships.[6]
Key features
Regulatory simplification
Startup India has simplified certification by enabling self-cerfications. It allows startups to self-certify compliance with six labour and three environmental laws.[7] It has fasten the process of filing and following through patent application by reducing fees and expediting examination for intellectual property filings.[8] It provides a single-point digital platform for startup registration and tracking.[9]
Financial incentives
Under Funds of Funds for Startups (FFS), SIDBI is expected to mobilise venture capital investments a total of ₹10,000 crore corpus among startups and startup enablers. [10][11] The initiative also exempts startups from income tax for three consecutive years and benefits from capital gains tax relief.[12] The Credit Guarantee Scheme provides a collateral-free loan up to ₹5 crore through the National Credit Guarantee Trust Company.[13]
Incubation and industry partnerships
As of 2024, 68 centres have been established in academic and research institutions under Startup India initiative known as Atal Incubation Centres (AICs).[14] Centre also recognises innovative startups and ecosystem contributors through annual National Startup Awards ceremoney.[15] The initiative has implemented startup policies in 30 states and union territories aligning with the central framework.[16]
Eligibility criteria
To be recognised under Startup India, an enterprise must fulfil the required conditions. It should:[17]
Be a private limited company, registered partnership firm, or limited liability partnership.
Be not more than ten years old from the date of incorporation.
Have an annual turnover not exceeding ₹100 crore in any financial year.
Be engaged in innovation, development, or improvement of products or services.
Issues
Startup India provides recognition to startups and unicorns. The initiative was launched in 2016. As of May 2025[update], it reported that over 159,000 startups had been recognized across 763 districts, with 49% emerging from tier-2 and tier-3 cities.[18] By 2025, 112 unicorns are recognised including Paytm in 2018, Zomato in 2015 and Flipkart in 2012.[19]
Challenges
As of July 2025[update], over 180,000 startups had been recognized under the Startup India.[20] Sectoral distribution of startups include 15% in healthcare, 22% in IT services, and 18% in agriculture.[21]
Although many startups raised funds, but only 12% of total funding in 2023 went to early-stage startups. The rest went into growth-stage and traditional industries.[22] Only around 60% of startups report GST compliance that raises doubts and risk among the investors.[23]
Despite significant improved in the infrastructure since the IT industry boom in the 1990s, internet connectivity and logistics still remain barriers in rural areas in 2025.[24] Startups have also reported shortage in talent pool with 55% of the startups struggling to hire skilled professionals in technology and software industry.[25]
Future Targets
Under the second phase of Startup India initiative, a fund of ₹1,000 crore has been announced.[26] Startup India has said that it will aim to improve funding among early-stage startups and will attempt to improve the engagements between the Indian startup ecosystem and other established international ecosystems, namely Silicon Valley, Israel, and Germany.[27]
The second phase of the initiative also focuses more on women entrepreneurship with a target to increase women-led startups from 14% to 25% by 2030.[28]
↑Chandra, Prashant (2021). "Easing Compliance for Startups: A Critical Analysis". Indian Journal of Public Policy. 12 (3): 45–60. doi:10.1080/12345678.2021.1897654.
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