The world appreciates India’s diversity, culture, traditions, and morals. The nation will soon celebrate 76 years of independence. India demonstrated its true power to the world by winning Gold and Silver in the Olympics and by creating cutting-edge smart cities. From a nation that spent a significant amount of time under British dominion, the nation that formerly imported quantities of wheat from other nations has now emerged as one of the largest exporters of the same.
The nation, which formerly imported all of its defense hardware, now produces its own high-tech weapons and ammunition. All of this demonstrates the resilience and bravery that this nation upholds within itself. In the midst of all of this, India just reached another milestone by moving up to third place in the global startup ecosystem. In recent years, startups have significantly impacted India’s economy. Startups have been able to produce some scalable jobs, and they are also having a significant impact on the socioeconomic evolution of the nation.
Before continuing, we must first understand what a startup is.
Startups are regarded as entities that are still in the early stages of business and are just beginning to set up their processes for the development, deployment, and commercialization of new products. Both technologically driven and unrelated to technology, these products have potential. The number of different types of startups in India has increased significantly in recent years. This country’s actual potential was demonstrated by the emergence of the startup sector, which gave rise to a number of incredibly creative business ideas.
Indian Startup System in the years
Bill Gates, the former CEO of Microsoft, once remarked on India’s business prospects. India has seen a rise in the number of startups ever since the early 2000s. Beginning in the early 2000s, the nation lacked a strong ecosystem. Supporters, as opposed to incubators and accelerators, were scarce, and it was difficult to get information and understanding about the difficulties and problems that would arise along the way. Apart from that, there weren’t many investors, so for the average person who wanted to operate their own business, taking a risk and beginning a business was always a big issue. But in recent years The IT City Bangalore has emerged as one of the prominent destinations for startups, Apart from Bangalore, Mumbai, Delhi and NCR Noida also have emerged as prominent destinations for the same.
Characteristics of the Indian Market
Since the beginning of time, India has been a center for commerce, exporting everything from textiles to precious metals, cotton, and spices. India left its mark on the world, however, the oppressive British Rule weakened the country and caused us to lose a lot of personnel to starvation, droughts, and the seductive British Rule. However, since Independence, things have been getting better every day.
India has frequently been referred to as the “Poster Child” of emerging markets in recent years. The central government’s 2016 introduction of a new startup strategy transformed the Indian markets’ dynamics significantly and did so for the benefit of the entire nation. We must never lose sight of the reality that with 1.3 billion people, we are a nation where everything has the potential to be sold in the marketplaces. Due to reforms made in the 1990s, India has been able to realize its potential. India’s economy is now more based on the market thanks to these reforms. Since this liberalization, India’s economy has experienced rapid growth, reaching a GDP of US$2.726 trillion in 2017. These are the factors that have led to India’s recent emergence as an ideal location for investments and entrepreneurs. The growth of purchasing power has also risen to another level along with this growth. It should be remembered that youth make up more than half of the population of the nation. These young people have greater materialistic needs than those of those from earlier eras, as well as their ambitions and dreams are much more different too.
India is a country that has different cultures, languages, ways of living, and religions. This diversity is both a bane and a boon for startups. A business might work exceptionally well in a particular area but that same might fail in other regions because of language differences, development differences, or understanding of products. This is one of the prominent features that affect startups on a large scale. Given the situation in the country, there is a huge need for a low-cost solution with more innovation in the products that can be easily sold to Pan India. In delivering solutions for the same India is finding answers to such of its questions with the help of Technology.
India;’s remarkable development in technology has made the work of companies much easier, as startups totally rely on market access and the possibility of target customers. This issue has been resolved by the introduction of various schemes by the government sector If we look back we can see that in the early days companies were required to set up physical offices for interacting with their customers but this technology and growth of the Internet have solved this problem as well. The schemes such as Digital Sakarsta Abhiyan played a crucial role in increasing Digital LIteracy among all the citizens of the country. The country now offers the facility of the Internet at good rates which has brought a revolution to everyone’s standard of living. Startup India Initiative is another applauding scheme bought by the government to change the dynamics of the business. Aadhar card, which is UIDAI, the special identity granted by the government to each and every citizen of India acts as another plus point for businesses. These businesses can easily identify their customers’ information. The recent growth of digital money transfer and services like Paytm, and Bharatpe have made the roads of small startups and businesses much easier to grow and succeed as it was ever before.
Startup India Initiative
Where there is a will there’s a way. Startup India initiative manifests these lines to reality. This initiative launched back in the year 2016 played a very important role in the rapid increase of Startups all over the country. From having a handful of tech companies to 55,000 different startups today. India’s position has strengthened at a vast scale over the past decade. Among these 55000 startups, there are 3200 startups that have raised $63 Billion in funding in the last five and half years alone. According to the official website of Startup every day, 2-3 startups are being born in the country.
The Startup India initiative brought revolutionary changes to the system. The Government provides easier compliance, an easier exit process for failed startups, legal support, fast tracking of patent applications, and a fully developed functional website to reduce information asymmetry. Exemptions on taxes are also provided by the government, a credit guarantee scheme as well is given to the government. The creation of various incubators is also provided by the government.
In 2018, the number of incubators and accelerators grew by 11%, while the rate of growth in the startup ecosystem jumped to 15% year over year. Significantly, the percentage of female business owners increased to 14% from 10% and 11% the prior two years. Over the course of the year, startups in the nation were able to add an estimated 40,000 new positions, bringing the overall number of jobs in the start-up ecosystem to 1.6–1.7 lakh. Over the country around 26 states have their own Startup policy that is making it easier for people to start their own businesses.
The 2019 Startup Genome Project ranking includes Bangalore among the top 20 startup cities worldwide.Bangalore, was also among top 5 cities that are booming startups all around the world in the year 2021. This immense growth has attracted many big international investors and has brought rapid progress in different sectors of the country. Moreover, this has been able to uplift the confidence of commoners to set up their own businesses. The sectors which have benefited the most are- Online Gaming, Edtech, Fintech, OTT Platforms, and E-commerce websites.
Factors that helped India to reach this milestone
There are many factors that are responsible for the growth of the startup sector so rapidly. Some of them are hereby mentioned-
1-Improvement of Infrastructural services and Technological Advancement
The country’s future has undergone some amazing transformations as a result of infrastructure upgrading during the previous few years. Another element that contributed to the nation’s continual growth was the development of the Internet. According to estimates, India will surpass the 400–500 incubator mark by 2024, up from barely 200 in 2017. The issue of the office and a particular space has been resolved by the growth of co-working spaces, which is occurring day by day. Since the Covid wave, working from home has become an option. Not only does it reduce travel expenses, but it also saves the staff a significant amount of time.
2- Political Will and Government Policies
The government’s role has been essential to startups and their development. Through the Atal Innovation Mission, Niti Aayog is creating a platform that will bring together all the resources, investors, sponsors, and incubators, making it easier than ever to register a company and run its business. 29 states in total, 26 of which have their own startup policies. AIM has embraced a more business-to-business strategy by assisting in the expansion of the current incubators, like NSRCEL, C-CAMP, and others. There are many ongoing schemes that provide special privileges and subsidies to women for starting a startup. These political schemes have not only increased the startup culture but it has also been helping many females to step out of their houses and do something and build an identity of their own.
3-The Buzzing Investment ScenarioDue to a lack of infrastructure and essential compliance solutions, there was some hesitation among inventors a few years ago when it came to investing in the Indian economy. However, since then, the situation has completely altered. International
investors increasingly frequently travel to India to make investments in the developing tech sector. Existing investors are participating more frequently overall. 2019 was not a fantastic year for venture capitalists, according to research from Datalabs by Inc42 analysis. However, in 2020 there will be about 4,640 active investors in India. Among them, 18.3% (or 849) are venture capital firms, and 59% (2,751) are angel investors.
As can be seen, India’s first ten years were marked by rapid infrastructure development, the construction of cities and other structures, the expansion of numerous industries, and the emergence of new businesses, but a sizable portion of the population remained uninterested in starting their own companies. However, the development of Internet technology has completely changed the situation. Since there are about 500 million Internet users in India, implementing blockchains, AI, IoT, AND doing data analytics and business analytics is made much simpler.
It will make up about 5% of the entire worldwide market. On the other side, it is anticipated that by 2030, AI will be worth up to $15.6 trillion.
However, by 2025, it is anticipated that there will be over 100,000 startups in India, producing more than 3.25 million jobs. At the same time, it is anticipated that over $150 billion will be invested in Indian entrepreneurs, with over $500 billion in value being created overall.
