The present decade is likely to be remembered as the era of entrepreneurship in India, as the country is currently experiencing a startup boom, with highly favorable conditions for entrepreneurs, making the fastest-growing Indian Startup ecosystem. The Government sector and the private sector both are working together to make a reliable environment for entrepreneurs.
In 2023, India has become one of the fastest-growing startup hubs in the world, with lots of startups growing and developing in various industries.
People also read about 10 Successful Startups in India, 2023.
The Indian Startup ecosystem has been built upon various factors or we can say pillars. Pillars such as Growing Market Size, Strong technology infrastructure, Availability of funding, Government Support, Presence of experienced entrepreneurs, Awareness among youth and parents, Emerging talent and Diversity of Industries.
India has a huge population, which means there is a large market for startups to get into. Nowadays, the number of internet users and smartphone users in the country has led to a surge in demand for digital products and services.
The report cited that India-specific innovations have partially driven the surge in activity. These innovations have played a significant role in shaping the current landscape of the Indian market. For instance, the emergence of UPI (Unified Payments Interface) has revolutionized the way people transact money in India.
Similarly, the rapid adoption of low-cost mobile devices and affordable data plans has made the Internet accessible to millions of people, leading to an explosion in demand for online services.
Moreover, Indian startups have been able to leverage these innovations and create business models that cater specifically to the Indian market, leading to their success and growth. India-specific innovations have played a crucial role in creating a conducive environment for the growth of the Indian market.
Vicky Bahl, Partner, Growth, Grant Thornton Bharat, stated that investors have expressed greater confidence in India, and both domestic and international entities are directing their investments towards the Indian economy.
In the current fiscal year of 2021-22, India has received foreign direct investment (FDI) inflows of USD 82 billion, marking a 10% increase over the previous year. Bahl attributed this growth to the proactive approach taken by the government in implementing measures to ease business for startups.
Enterprises are realizing the Startup’s disruptive potential, and they are therefore partnering with or investing in them.
In a collaboration with Startup India, Facebook distributed cash grants worth $50,000 each to the top 5 selected startups. This initiative aimed to support the growth and development of promising startups in India by providing them with financial assistance and valuable resources.
The selected startups were evaluated based on various parameters, including their potential for impact, innovation, and scalability. The cash grants were intended to help these startups build their businesses and reach new heights. This partnership between Facebook and Startup India demonstrated the commitment of both organizations to supporting the startup ecosystem in India and fostering innovation and entrepreneurship.
Shark Tank India is also a great initiative to support and providing the Indian Startups a brand new platform to get reach and providing them with funding.
The Indian government has recognized the importance of collaborating with disruptive innovators who are working across various stages of the value chain. These innovators are developing cutting-edge solutions that have the potential to significantly improve the delivery of public services.
By partnering with these disruptors, the government can leverage their innovations to make its services more efficient, effective, and accessible to the citizens.
This approach also enables the government to tap into the creativity and expertise of these innovators to solve complex challenges and develop new solutions that were not previously possible.
In recent years, the Indian government has introduced a range of initiatives and funding schemes aimed at supporting startups in the country.
The objective behind these schemes is to create a favorable environment for entrepreneurs to start and grow their businesses. If you are a budding entrepreneur in India and are looking to launch a new venture, it is essential to be aware of these government schemes that are designed specifically for startups.
These schemes offer a range of benefits to startups, including financial support, mentorship, networking opportunities, and access to resources and facilities. They are aimed at providing the necessary support and resources to startups so that they can focus on developing their products and services without having to worry about the financial burden. Here are the Top12 Government schemes for Startups in India.
Challenges faced by Indian Startup ecosystem
Despite recording an increase in the number of startups to 84,012 in 2022 from 452 in 2016, the Indian startup ecosystem is facing several challenges. Funding, revenue generation struggles, and lack of access to supportive infrastructure are some of the obstacles. The regulatory environment and tax structures are also posing hurdles for startups.
The report stated that “with solution-oriented strategies, startups will continue to be the messengers of India’s entrepreneurial dynamism.”
According to the report, the Department for Promotion of Industry and Internal Trade (DPIIT) recognised that startups have created more than 900,000 direct jobs.
The report also highlighted that the country has recorded a 64 per cent increase in the average number of new jobs in 2022 relative to the last three years. Tier 2 and 3 cities are emerging as hotspots, as they are home to about 48 per cent of Indian startups.
The startup ecosystem in India - Quick facts
In 2018, India witnessed the presence of approximately 50,000 startups, out of which around 8,900-9,300 were led by technology.
Moreover, in 2019 alone, 1,300 new technology-led startups were born, which implies that 2-3 technology startups come into existence every day. It is expected that the Indian startup ecosystem, the 3rd largest in the world, will witness a consistent annual growth of 12-15% in the coming years.
Grant Thornton Bharat reported that startups based in India raised $39 billion in capital in 2021.
The report on the democratisation of the Indian startup ecosystem revealed a 255% increase in total funding, up from $11.8 billion in 2020.
Additionally, the startup mortality rate decreased to 1% in 2021, indicating a significant reduction in the number of failed businesses compared to 16% in 2016.