Why in News?

• On January 16, 2025 (National Startup Day), the Prime Minister of India addressed the startup ecosystem on the 10th anniversary of the Startup India scheme, launched on January 16, 2016.
• He highlighted record growth in startup registrations, changing attitudes towards risk-taking, and India’s ambition for global leadership in deep tech and indigenous AI.

What’s in Today’s Article?

• The Startup India Scheme
• Key Highlights of Startup India’s Decade-long Journey
• Challenges and Way Ahead
• Conclusion

The Startup India Scheme:

• It is a flagship Government of India initiative, launched in 2016, to foster a robust ecosystem for innovation and entrepreneurship, transforming India into a nation of job creators through support pillars:
  • Simplification & Handholding,
  • Funding Support, and
  • Incubation & Industry-Academia Partnership.
• It offers benefits like tax exemptions, easier compliance, seed funding, and mentorship to eligible startups, promoting economic growth and large-scale job creation.

Key Highlights of Startup India’s Decade-long Journey:

• Record growth in startup ecosystem:
  • Nearly 44,000 startups registered in 2025 — highest annual addition since inception. India is now the 3rd largest startup ecosystem globally.
  • Growth trajectory: Less than 500 startups, and 4 unicorns in 2014. Over 2 lakh DPIIT-recognised startups, and about 125 active unicorns in 2025.
  • Impact: Startups → Unicorns → IPOs → creates a virtuous cycle of job creation, and innovation-led growth.
• Cultural shift - Mainstreaming risk-taking:
  • Risk-taking is now socially accepted and respected, unlike earlier stigma. Shift from job-seeking mindset to job-creating mindset.
  • Expansion of entrepreneurship beyond elite families to middle class and poor - boosting entrepreneurial culture, risk capital, and demographic dividend.
• Government support and funding ecosystem:
  • ₹25,000 crore invested via Fund of Funds for Startups (FFS).
  • Fund of Funds 2.0 (₹10,000 crore) approved in April 2025 to focus on deep tech sectors (Artificial Intelligence (AI), Machine Learning, Quantum technologies, Defence & Aerospace).
  • Objective: To provide patient risk capital due to long gestation periods.
• Strategic focus on indigenous AI and manufacturing:
  • PM’s call for indigenous AI solutions developed by Indian talent and hosted on Indian servers (data sovereignty).
  • IndiaAI Mission: 38,000+ GPUs onboarded to democratise access to computing power.
  • Emphasis on: Manufacturing, global-standard products, and leadership in new technologies (not mere partnerships) - boosting strategic autonomy, economic security, and data sovereignty.
• Inclusivity in the startup revolution:
  • Women-led startups: For example, over 45% recognised startups have at least one woman director/partner. India is the 2nd largest ecosystem of women-led startups globally.
  • Geographical spread: Rapid rise in tier-2, tier-3 cities and rural areas. Focus on solving local and grassroots problems - promoting inclusive growth, women entrepreneurship, and regional balance.
• Regulatory reforms and ease of doing business:
  • Jan Vishwas Act: Decriminalised over 180 provisions - promoting Ease of Doing Business, and trust-based governance.
  • Key enablers: Self-certification under multiple laws, simplified mergers and exits, and reduction in Inspector Raj.
  • Innovation ecosystem strengthened through Atal Tinkering Labs, hackathons, and incubation support.
• Sectoral breakthroughs enabled by policy support:
  • Defence and space: iDEX enabled startup participation in defence procurement. The space sector opened to private players, with about 200 space startups gaining global approvals.
  • Drone sector: Removal of outdated rules unlocked innovation.
  • Government e-Marketplace (GeM): Nearly 35,000 startups and small businesses are onboarded on GeM, and have received more than 5 lakh orders worth over Rs 50,000 crore, highlighting public procurement reforms.

Challenges and Way Ahead:

• Sustaining funding: During global economic uncertainties. Expand access to risk capital and advanced infrastructure (GPUs, labs).
• Bridging deep tech talent and R&D gaps: Strengthen deep tech ecosystems through academia–industry collaboration. Integrate startups with national missions (AI, defence, space, climate tech).
• Ensuring quality scale-up: Enhance domestic manufacturing under startup-led innovation.
• Managing cybersecurity: Ensuring data governance in AI-driven growth.
• Avoiding regional and sectoral concentration: Focus on export-oriented and globally competitive startups.

Conclusion:

• As India marks a decade of the Startup India Initiative, the country’s startup ecosystem stands at an inflection point - moving decisively from rapid expansion to sustainable scale and deeper integration with the real economy.
• It represents not merely scale, but structural transformation built on demographic advantage, digital public infrastructure, and a sustained reform agenda.
• As India advances towards a $7.3 trillion economy by 2030 and the broader vision of Viksit Bharat 2047, startups are poised to remain central to the country’s development trajectory.