Description

India is currently home to 107 unicorns, making it the third-largest startup ecosystem in the world with an estimated 30,000+ startups and a consolidated inflow of over $50+ billion over the last three years. The seed, angel, venture, and private equity funds, along with government, incubator, and accelerator support, have all played a significant role in the rapid expansion of the Indian startup ecosystem. Through its flagship Startup India initiative, which went into effect in 2016, the government, for its part, is fostering an environment that is favorable to entrepreneurs. To promote enhanced e-governance, investments, and technological innovation through research and higher education to support entrepreneurship and propel economic growth, the government of India is pushing the country towards a knowledge-based and digital economy. According to data, the growth of the startup ecosystem has been concentrated on big (Tier 1) cities and states with a strong economy, particularly in IT-enabled industries like e-commerce, transportation, and banking. Beyond the metro areas, small firms are not sufficiently informed of or included in programmes that provide entrepreneurs different government incentives and tax benefits. Despite the progress made thus far, there are still many obstacles for Indian businesses to overcome, including the fragmented nature of the market in most sectors, a lack of clear and transparent policy initiatives that startups can quickly access, a lack of infrastructure, a lack of knowledge and exposure, and difficulties in conducting business. Opportunities for startups in India may be improved by increasing public awareness of government initiatives and incentives, allocating credit to priority industries, promoting outreach and network benefits to Tier 2 and Tier 3 cities, and simplifying financing and tax breaks for both domestic and foreign investors.