Startup Ecosystem in India – Figures and Facts
Startup Ecosystem in India – 2022 Figures and Facts
India is a rapidly growing startup ecosystem that has seen tremendous growth over the last few years. According to a recent report, India is the third-largest startup hub in the world with more than 50,000 startups as of 2021. This number is expected to grow significantly by 2022 as more investors are taking an interest in Indian startups. Apart from this, venture capital investments into Indian startups have grown exponentially since 2014, making it one of the most attractive investment destinations for global investors.
In 2020 alone, over $13 billion was invested into Indian startups with most of it coming from foreign investors such as SoftBank and Tiger Global Management. This trend looks set to continue in the near future given that there’s still plenty of untapped potential for growth within India’s burgeoning tech industry.
The government too has been taking steps to promote entrepreneurship through various initiatives like ‘Startup India’ and ‘Make In India’ which have helped attract both domestic and international funding into various sectors like eCommerce, healthcare technology etc. Moreover, several tax incentives have also been provided to encourage new business formation such as lower corporate income taxes on profits earned by start-ups up till five years after incorporation and exemptions from angel tax when raising funds via equity dilution up till INR 25 crores (approx USD 3 million).
The Union Budget 2021 proposed additional funding schemes for Startups including: -
- A seed fund of Rs 945 crore (USD 130 million) allocated under Department for Promotion of Industry & Internal Trade (DPIIT) aimed at providing early stage financial assistance to help Startups get off the ground;
- An Innovation Fund worth Rs 5000 crore (USD 690 million) established under National Research Development Corporation (NRDC);
- Tax incentives extended towards R&D activities conducted by Startups; - Relaxation on taxation norms for companies located outside major cities;
- 100% exemption from Income Tax imposed on profits earned during first three consecutive assessment years out of seven years once incorporated;
- Capital gains exemptions offered if money raised through sale or transfer is reinvested back into a qualifying Startup within six months time frame subject to certain conditions being met etc.
- All these measures taken together will go a long way in creating an enabling environment conducive to innovation while promoting entrepreneurial spirit amongst aspiring young Indians who dream big!
