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 initative 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.
Reception
Achievements
As of May 2025, over 159,000 startups have been recognised across 763 districts, with 49% emerging from tier-2 and tier-3 cities.[18] The initiative has generated 1.7 million direct jobs, with 40% in technology-related sectors.[19] Since the advent of the initiative, India has immproved her rank to be ranked 3rd globally in the 2023 Startup Ecosystem Index by StartupBlink.[20]
A total of 112 unicorns were recorded by 2025 in India, including Flipkart, Paytm, and Zomato.[21] Sectoral distribution includes 15% in healthcare, 22% in IT services, and 18% in agriculture.[22]
Challenges
Although many startups raised funds, but only 12% of total funding in 2023 went to early-stage startups. Rest went into growth state and traditional industries.[23] Only around 60% of startups report GST compliance that raises doubts and risk among the investors.[24]
Despite significant improved in the infrastructure, internet connectivity and logistics still remain barriers in rural areas in 2025.[25] Startups have also reports shortage in talend poor, with 55% of the startups struggling to hire skilled professionals in technology and software industry.[26]
Future initiatives
Under the second phase of Startup India initiative, a fund of ₹1,000 crore allocated for early-stage funding.[27] It seeks to improve funding among early-stage startups as compared to growth-stage startups. Initiative also attempts to increase strategic engagements between Indian startup ecosystem and other established international ecosystems, namely Silicon Valley, Israel, and Germany.[28]
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.[29]
↑ 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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