On National Startup Day (16 January 2026), the Prime Minister highlighted the completion of ten years of the Startup India Initiative, underscoring India’s journey from a policy-driven push for entrepreneurship in 2016 to one of the largest startup ecosystems globally, aligned with the vision of Viksit Bharat 2047.

Launched on 16 January 2016, the Startup India Initiative seeks to promote entrepreneurship, strengthen innovation ecosystems, and transition India from a job-seeking to a job-creating economy. The programme is implemented by a dedicated Startup India team under the Department for Promotion of Industry and Internal Trade (DPIIT).

A startup, under the initiative, refers to a young enterprise engaged in innovation, development, or improvement of products, services, or processes, often with scalable business models and employment potential.

Core Objectives

• Create a conducive environment for innovation-led growth
• Simplify regulatory compliance for startups
• Improve access to capital and credit
• Generate large-scale employment
• Support sustainable and inclusive economic development

Key Schemes and Institutional Pillars

Fund of Funds for Startups (FFS)

A flagship initiative under the Startup India Action Plan, with a ₹10,000 crore corpus, managed by SIDBI. Instead of direct funding, it invests in SEBI-registered Alternative Investment Funds, thereby expanding domestic risk capital and strengthening venture financing.

Credit Guarantee Scheme for Startups (CGSS)

Facilitates collateral-free loans for startups through eligible lending institutions, operationalised by the National Credit Guarantee Trustee Company.

Startup India Seed Fund Scheme (SISFS)

Provides early-stage financial support for proof of concept, prototyping, product trials, and market entry, with a ₹945 crore corpus.

Startup India Hub

A single-window digital platform connecting startups with investors, mentors, incubators, academia, corporates, and government bodies, enabling nationwide collaboration.

States’ Startup Ranking Framework

Evaluates States and Union Territories on startup policy formulation and implementation, promoting competitive federalism and decentralised entrepreneurship.

Mentorship and Networking Platforms

Initiatives such as the MAARG Portal and Startup India Investor Connect facilitate structured mentorship, resilience building, and capital access.

Impact and Achievements (As of December 2025)

• Over 2 lakh DPIIT-recognised startups, placing India among the world’s largest startup ecosystems
• Nearly 44,000 startups added in 2025 alone, the highest annual addition since 2016
• About 50% of new startups emerging from Tier-II and Tier-III cities, indicating geographical decentralisation
• Unicorn count increased from 4 in 2014 to over 120, with a combined valuation exceeding USD 350 billion
• Major hubs remain Bengaluru, Hyderabad, Mumbai, and Delhi-NCR, while non-metro ecosystems are rapidly expanding

Complementary Schemes Strengthening the Ecosystem

• Atal Innovation Mission (AIM): Fosters innovation culture through Atal Tinkering Labs, incubators, and mission-oriented programmes; AIM 2.0 focuses on deep-tech scale-up and vernacular innovation
• GENESIS (MeitY): Supports deep-tech startups, particularly in Tier-II and Tier-III cities
• TIDE 2.0: Promotes ICT and emerging technology startups in AI, IoT, blockchain, robotics, and health tech
• NIDHI (DST): Converts ideas into scalable startups through incubators and seed funding
• SVEP and ASPIRE: Promote rural entrepreneurship and livelihood-based innovation
• PMEGP: Credit-linked subsidy scheme supporting micro-enterprise creation and self-employment

Structural Challenges in India’s Startup Ecosystem

• Infrastructure Gaps
  High operating costs, inadequate logistics, unreliable power supply, and weak digital connectivity outside metropolitan regions constrain startup scalability, especially in Tier-II, Tier-III, and rural areas.
  
• Shallow Deep-Tech Penetration
  India’s startup ecosystem remains consumer-centric, dominated by fintech, e-commerce, and delivery platforms, while deep-tech sectors such as semiconductors, electric vehicles, artificial intelligence, and advanced manufacturing remain underdeveloped.
  
• Segmented Demand Structure
  Uneven income distribution shapes startup business models, with capital supplied by affluent groups, consumption driven by price-sensitive middle classes, and the poor largely excluded from monetisable markets, limiting the scope for breakthrough innovation.
  
• Limited Domestic Risk Capital
  A risk-averse investment culture and regulatory constraints restrict the flow of long-term patient capital into high-risk, innovation-intensive sectors, increasing dependence on foreign funding.
  
• Funding Slowdown and Startup Attrition
  Recent funding contraction has resulted in over 5,000 startup closures, declining seed and D2C investments, and a growing investor preference for low-risk, quick-return business models.
  
• Low R&D Intensity
  India’s research and development expenditure remains around 0.64% of GDP, with limited emphasis on applied and commercially viable research, constraining the growth of deep-tech startups.
  
• Weak Exit Ecosystem
  Underperforming IPOs, valuation concerns, and limited acquisition opportunities have weakened exit pathways, reducing investor confidence and slowing capital recycling within the startup ecosystem.
  

Measures to Strengthen the Ecosystem

• Enable pension funds, insurance funds, and sovereign capital to invest in startups
• Strengthen industry–academia collaboration with institutions like ISRO, DRDO, IITs, and IISc
• Align Skill India and Atal Tinkering Labs with advanced deep-tech skill development
• Promote mission-mode, outcome-based funding under IndiaAI, Semiconductor, and Quantum missions
• Create patient capital and testing infrastructure for deep-tech scale-up
• Improve digital, logistics, and energy infrastructure beyond metropolitan regions
• Simplify tax, IPR, and exit regulations to ensure predictability and investor confidence
• Encourage green, climate-tech, and sustainability-focused startups aligned with Mission LiFE

Conclusion

After a decade, Startup India is transitioning from rapid expansion to sustainable scaling. Supported by demographic dividends, digital public infrastructure, and policy reforms, startups have emerged as key drivers of innovation, employment, and global integration. Addressing structural constraints and fostering deep-tech innovation will be critical for ensuring that startups remain central to India’s journey towards a USD 7+ trillion economy and the vision of Viksit Bharat 2047.