Decade of the Startup India Initiative | 17 Jan 2026

Source: PIB 

Why in News?  

On the occasion of National Startup Day (16^th January 2026), Prime Minister highlighted a decade of the Startup India Initiative at Bharat Mandapam, New Delhi, marking India’s transformation from a policy-led push for entrepreneurship in 2016 to one of the world’s largest startup ecosystems, aligned with the vision of Viksit Bharat 2047. 

What is the Startup India Initiative? 

• About: Launched on 16th January 2016, the Startup India Initiative aims to support entrepreneurs, strengthen the startup ecosystem, and shift India from a job-seeking to a job-creating economy. 
  • A startup is a small, new, or young company founded by entrepreneurs to introduce a new product or service, disrupt an existing market, or even create a new one. 
  • The Startup India Initiative is implemented by a dedicated Startup India team under the Department for Promotion of Industry and Internal Trade (DPIIT). 
• Key Objectives: 
  • Nurture Innovation: To create a conducive environment for the development and scaling of innovative products and solutions. 
  • Promote Entrepreneurship: To simplify the regulatory burden and support entrepreneurs at every stage of their journey. 
  • Enable Investment: To facilitate access to funding and capital for startups. 
  • Economic Growth: To drive sustainable economic growth and generate large-scale employment opportunities. 
• Major Schemes & Support Pillars: 
  • Fund of Funds for Startups (FFS): A flagship initiative of DPIIT under the Startup India Action Plan, managed by Small Industries Development Bank of India (SIDBI), with a Rs 10,000 crore corpus to support SEBI-registered AIFs that invest in startups. 
    • This expands domestic risk capital and strengthens the entrepreneurial ecosystem. 
  • Credit Guarantee Scheme for Startups (CGSS): Enables collateral-free loans to startups through eligible financial institutions and is operationalised by National Credit Guarantee Trustee Company (NCGTC). 
  • Startup India Seed Fund Scheme (SISFS): A Rs 945 crore corpus providing financial assistance for early-stage requirements like proof of concept, prototyping, and market entry. 
  • Startup India Hub: A single-window digital platform that connects startups with investors, mentors, incubators, academic institutions, corporates, and government bodies, enabling collaboration across India’s entrepreneurial ecosystem. 
  • States’ Startup Ranking Framework (SRF): Assesses States and Union Territories on startup-friendly policies and implementation, promoting competitive federalism by classifying them as Best Performers, Top Performers, Leaders, Aspiring Leaders, and Emerging Startup Ecosystems. 
  • Mentorship & Networking: Initiatives like the Mentorship, Advisory, Assistance, Resilience, and Growth (MAARG) Portal and the Startup India Investor Connect Portal bridge the gap between founders, mentors, and investors. 
• Impact & Achievements (as of Dec 2025): India has over 2 lakh DPIIT-recognised startups, placing it among the largest startup ecosystems globally.  
  • Nearly 44,000 startups registered with the government in 2025, the highest annual addition since the launch of Startup India. 
  • While major hubs such as Bengaluru, Hyderabad, Mumbai, and Delhi-NCR continue to lead, nearly 50% of startups now originate from Tier II and Tier III cities, reflecting deepening decentralisation.  
  • The ecosystem has also seen sharp unicorn (a startup valued at USD 1 billion or more) growth, rising from 4 unicorns in 2014 to over 120, with a combined valuation exceeding USD 350 billion.

What are the Challenges Faced by Startups in India? 

• Infrastructure Constraints: High operational costs and inadequate infrastructure, particularly in Tier II, Tier III, and rural areas, hinder startup scalability.  
  • Poor internet connectivity, weak logistics, and unreliable power supply significantly raise costs and reduce competitiveness. 
• Consumer-Centric Bias over Deep-Tech Innovation: Most Indian startups focus on consumer-facing services like fintech and food delivery, while deep-tech sectors such as EVs, semiconductors, and AI remain underdeveloped.  
  • This reflects structural economic conditions rather than a lack of entrepreneurial ambition. 
• Segmented Demand Structure: India’s startup models reflect the country’s uneven demand structure, where the rich primarily provide capital, the middle-income group forms the main price-sensitive consumer base, and the poor largely remain unmonetisable while supplying labour.  
  • As a result, startups focus on scalable consumer models rather than breakthrough innovation, limiting progress in high-technology sectors. 
• Limited Domestic Venture Capital: A risk-averse policy and investment environment discourages long-term, high-capital investments in deep-tech sectors, increasing dependence on foreign capital and exposing startups to global financial volatility. 
• Funding Slowdown and Startup Closures: The ecosystem has witnessed a slowdown, with over 5,000 startup closures, particularly in Maharashtra, due to funding shortages and rising competition.  
  • Seed funding fell by 25% and D2C funding declined by 18% in 2024. 
  • Venture capitalists increasingly prefer low-risk, quick-return sectors like e-commerce, limiting funding for innovation-intensive ventures amid macroeconomic and political uncertainty. 
• Low R&D Intensity: India’s R&D expenditure remains low at about 0.64% of GDP, with greater emphasis on basic research than on applied, commercially viable innovation, constraining deep-tech development. 
• Exit and IPO Challenges: Underperforming startup IPOs, high valuations, and profitability concerns have weakened exit options, increasing investor caution and reducing capital inflows.

What Steps can Strengthen India’s Startup Ecosystem? 

• Deepen Domestic Risk Capital: Enable pension funds, insurance companies, and sovereign funds to invest in startups, especially in deep-tech and long-gestation sectors. 
• Strengthen Industry–academia Linkages: Promote structured collaboration between startups and institutions such as Indian Space Research Organisation, Defence Research and Development Organisation, Indian Institutes of Technology, and Indian Institute of Science for applied research and commercialisation. 
  • Align Skill India and Atal Tinkering Labs with advanced skills in AI, data analytics, and deep-tech while preventing brain drain. 
• Boost Applied R&D and Mission-mode Funding: Provide outcome-based grants under initiatives like IndiaAI Mission, India Semiconductor Mission, and National Quantum Mission to support high-risk innovation. 
• Support Deep-tech Scale-up: Create patient capital windows and testing infrastructure for AI, EVs, robotics, space, and clean energy startups. 
• Improve Infrastructure Beyond Metros: Strengthen digital connectivity, logistics, and power supply in Tier II, Tier III, and rural regions to reduce startup costs. 
• Simplify Regulations: Ensure predictable tax policies, faster IPR processing, and stronger exit mechanisms through IPOs, acquisitions, and secondary markets. 
• Promote Green and Sustainable Innovation: Encourage startups in electric mobility, clean energy, and climate technologies aligned with Mission LiFE.

Conclusion 

A decade into Startup India, the ecosystem is shifting from rapid growth to sustainable scaling. Built on demographic strength, digital public infrastructure, and sustained reforms, startups are driving innovation, employment, and global integration, and will remain central to India’s journey towards a USD 7.3 trillion economy by 2030 and Viksit Bharat 2047.