Startup India: A Nurturing Force

3 Years agoThe Startup India initiative is nurturing growth and dynamism in the country's startup ecosystem. Read on to know how!

Prime Minister Narendra Modi announced the Startup India initiative on India’s 69th Independence Day with an aspiration to impart more “strength and inspiration to the talented young generation of India to do something new for India and humanity”. With a vision to create a platform where budding entrepreneurs could establish themselves without any hassles, the initiative was set up to provide funding support and incentives in areas such as patent filing and simplification of the startup process. Five months in, in January 2016, the Startup India Action Plan was launched. For a country that boasts of having the third- largest startup ecosystem in the world, this initiative provides a further boost to nurture innovation.

The startup movement has traversed a long distance since then. From being restricted to the digital/technology sector to growing into a wider range of sectors covering agriculture, manufacturing, education and healthcare; from being confined to Tier 1 cities to reaching Tier 2 and Tier 3 cities – Indian startups are spreading their wings far and wide. The initiative has managed to instil confidence in the youth, that that their idea is more than just an idea and that there are ready opportunities to help nurture it further. India is maturing as a startup hub with 8% growth registered in the number of funded startups in 2016.

The Startup India initiative revolves around three pillars: Simplification and Handholding, Funding Support and Incentives, and Industry – Academia Partnership and Incubation. 770 startups have been recognised by the Department of Industrial Policy and Promotion (DIPP) under the initiative so far.

Under the ambit of the aforementioned pillars, the following support was planned and provided. Here’s looking at what Startup India set out to do and what has been accomplished so far.




The Idea: To reduce compliance costs and ease compliance norms, so that startups can focus on their core business

The Story so Far: Startups that come under the 36 ‘White Category’ industries (practically non-polluting enterprises) have been exempt from environmental clearances and are permitted to self-certify. Additionally, self-certification under six labour laws has also been permitted, wherein no inspections will be conducted for a duration of three years.1




The idea: To create a single point of contact i.e. ‘Startup India Hub’, to facilitate exchange of knowledge and provide access to funding. The Hub works as a nodal agency to aggregate the fragmented startup community, create an integrated ecosystem, and reduce knowledge asymmetry.

Additionally the Startup India Learning Programme, a free four-week online course, provides guidance to aspiring as well as experienced entrepreneurs on how to formulate business plans and approach challenges. The programme helps entrepreneurs with assessment of the idea, building a legal foundation, understanding financial basics, introduction to business planning, fundraising and valuation. It can be accessed at

The story so far: Startup India Hub provides facilitation to all stakeholders of the startup ecosystem, including startups, investors, incubators, mentors, Govt. agencies, and industry partners. The team has addressed over 45,000 queries since their launch in April 2016 through a toll-free helpline, email and Twitter. The Hub has also taken up more than 350 bespoke, one-on- one facilitation cases to provide support related to financing, business advisory, regulatory advisory, etc. They are soon launching the Startup India Virtual Hub, a web portal that will act as a one-stop shop to bring together all stakeholders on one platform for streamlined knowledge-sharing and mutual connects.




The idea: To provide low-cost legal assistance to startups in filing Intellectual Proper applications and speed up the process for the same. A panel of 423 facilitators pertaining to patent and design applications and 596 facilitators for trademark applications has been established to assist entrepreneurs in the filing of Intellectual Property Rights (IP) applications.2

The story so far: As of now, 179 applications have been given a benefit of up to 80% rebate in patent fee along with free legal assistance. Additionally, 32 startups have received the benefit of fee rebate in quicker examination of patents. 50% rebate in trademarks filing fee for startups under Trademarks Rules 2017 has been extended to 52 startups.3




The idea: To relax norms of public procurement for micro and small enterprises

The story so far: Earlier, every time the government floated a tender, there was an eligibility condition either pertaining to prior experience or prior turnover. With these conditions now done away with, more startups are now eligible to be a part of the tendering process. The relaxation has been expanded to Central Public Sector Undertakings as well.




The idea: To provide tax exemptions to startups in a bid to encourage them further

The story so far: As per the Finance Act 2016, startups have been exempted from income tax for a period of three years in a block of five years, if they are registered between 1st April 2016 and 31st March 2019. In the Union Budget 2017-18, the Government announced an extension in the period of profit-linked deductions to seven years for all startups that are eligible. To avail this benefit, they have to procure a Certificate of Eligibility from the Inter Ministerial Board of DIPP.4

The introduction of a new section 54EE permits the exemption of investment of long term capital gains by an investor in a fund announced by the Central Government. The section 54GB has been amended to provide exemption of capital gains after the sale of a residential property, if the investment is made for the shares of a startup company. Tax exemptions on investments above Fair Market Value have been introduced for investments made in Startups.




The idea: To provide financial assistance to startups, a ‘Fund of Funds’ of USD 1.6 Billion has been introduced and is being managed by Small Industries Development Bank of India (SIDBI)

The story so far: This Funds of Funds invests in SEBI registered “Alternate Investment Funds (AIFs)” which in turn invest in Startups. USD 92 Million has been released to SIDBI with 62 startups having received funding from various AIFs5.




The idea: To educate startups and aspiring entrepreneurs through various stages of their entrepreneurial journey

The story so far: An interactive learning module has been launched for this purpose. Over 100,000 applications have received and 3,400 applicants have completed 100% of this course, which aims to help entrepreneurs get their ideas and ventures to the next level through structured learning. 

What else shines bright in the Startup India initiative?

  • Provision of support infrastructure: New incubation centres are being set up across India under the Atal Innovation Mission with an aim to provide the necessary infrastructure or any other assistance to startups, especially in their initial stage. Apart from the establishment of new centres, existing centres are being updated.

    Additionally, under the Scheme, research parks, startup centres, bio-clusters, bio-incubators, technology transfer offices and bio-connect offices are also being set up. In order to fuel innovation through incubation and successful collaboration between academia and industry through joint research projects, Research Parks are being set up across India. Huge funds have been allocated towards the same.

    Government initiatives undertaken, a spike in academic incubators, an increased interest among investors and growing digital consumers are likely to propel the startup landscape even further. Given the momentum at which the startup ecosystem is progressing in India, the country is likely to host 10,500 startups by 2020, employing over 210,000 people.6

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