Indian Start-Ups: The Growth Story

The last few decades have transformed the entrepreneurial landscape of India—from the incubation of new start-ups to an ever-increasing interest of global investors in this segment and, most critically, reforms in policies and infrastructure to facilitate ease of doing business. Start-ups have played a significant role in strengthening developed and emerging economies and have become drivers of harnessing technology & innovation, creating job opportunities, and keeping India’s growth story alive amidst uncertainties. According to a 2022 report, India has emerged as the world’s third-largest start-up economy globally, with 77000+ DPIIT-recognized start-ups across 656 districts of the country.

The government of India has been quick to recognize the potential of start-ups and has responded with continuous industry dialogue to encourage the right growth environment.

A Glimpse at the Current State

India has been a hotspot for start-up evolution for a while now. In 2021, 33 Indian start-ups entered the coveted unicorn club, and the number grew to include 13 more in 2022. India is now positioned close to the likes of the US, China, and other top start-up ecosystems globally, and continues to witness rapid growth in the numbers. An industry report suggests a dramatic increase in the number of cumulative start-ups at a CAGR of 17% since 2012 and crossed a remarkable 1.12 lac.

What Factors were Instrumental in Getting us here?

While start-ups have existed for quite some time, soon India realized the need to foster an entrepreneurial and innovative mindset by developing incubation centers. A rising number of academic institutional programs and an aspiring young talent pool raring to start on their own propelled the start-up ecosystem in India.

Start-ups have the capability to take risks and move fast, pivoting to changing market circumstances to become India’s prized assets today. Old world business houses keen on acquiring a digital edge are fuelling the number of corporate-startup collaborations and are empowering early-stage ventures that lack cash and benefit corporates who often lack agility and innovation – a win-win for both.

The government, too, has taken various steps to simplify processes and facilitate ease of doing business for MSMEs. From setting up incubators to aggregate required inputs for start-ups to enabling necessary policy flexibility to provide necessary oversight for growth, central and various state governments are geared up to bring about the start-up revolution.

Government focus on Ease of Doing Business

From developing digital infrastructure like ONDC (Open Network for Digital Commerce), providing monetary incentives, and facilitating a marketplace for MSMEs, government initiatives meant to support the start-up ecosystem have steadily risen. The launch of the Jan Samarth Portal and the revision of guidelines to promote MSMEs in the Northeast are a step in this direction.

Union Minister of State for Commerce & Industry also launched the Indian Business Portal - An International Trade Hub for Indian Exporters and Foreign Buyers. Here, SME exporters, artisans, and farmers can tap into new markets for their products and grow sales globally. The government has also relaxed export norms under the Export Promotion Capital Goods (EPCG) scheme that allows duty-free capital goods imports subject to an export obligation.

Summing Up…

Policies and initiatives have been introduced for fee exemptions, EV infrastructure expansion, and ease from burdensome compliances enabling the start-up landscape in India. Fast adoption of global trends, an environment conducive to innovation and the availability of a trained young talent pool—all these factors are making India a conducive destination for next-generation Unicorns. New-age start-ups leveraging Artificial Intelligence (AI), Machine Learning (ML) and blockchain are not only developing new business opportunities but are also helping India Inc. stay competitive and updated to compete in international markets.