Assessing the policy ecosystem for startups in India

Abstract

According to Startup India, a startup is defined as "an entity that is headquartered in India, which was opened less than ten years ago, and has an annual turnover less than ₹100 crores". A softer requirement is that the startup should be "working toward the innovation, development, or improvement of products or processes or services or it is a scalable business model with high potential for employment generation and wealth creation". India has the 3rd largest startup ecosystem globally, with ~60 unicorns and over 38,000 active and recognized startups. The number of incubators and accelerators also increased to 11% in 2018, while employment generation through startups was estimated to be 40,000 new jobs in 2019. Further, Indian startups have raised sizeable amounts of investment from various global and domestic funds. The industry has received support from established corporates in terms of investment, operations and R&D, growth acceleration initiatives, and advisory services. Over 26 states in India have dedicated startup policies, encompassing tax incentives, capital and credit assistance, sops, accelerator programs, and potential public-private partnerships.