When I quit my job and became an entrepreneur in 1990, there was no policy framework for startups. No venture capital, no tax incentives, no regulatory support. We were simply small business people navigating an indifferent system.
Today, India has over 5,00,000 startups (of which 200,000 are registered with DPIIT) and more than 120 unicorns, a transformation driven significantly by deliberate policy interventions over the past decade.
As we complete 10 years of Startup India, it is a good moment to take stock of how far we have come.
Why startups matter
Startups are central to India’s growth strategy. Consider Infosys and HCL; both were startups in the early 1980s. Look at them today: in terms of industry and employment creation, market capitalisation, and building the Indian brand globally. I started my working career in 1984, and there has been a massive difference in the landscape between then and now. Most of the growth and employment has come from new companies and sectors that didn’t even exist in the eighties.
IT services didn’t exist. The internet didn’t exist. Private sector banks barely existed. E-commerce didn’t exist. Company after company and industry after industry have been created, often led by startups. HCL, Infosys, Wipro: these were once small ventures started by ambitious entrepreneurs. Today, they employ thousands and have become symbols of India’s capabilities on the world stage.
Therefore, we believe the giant companies of tomorrow are the startups of today. This is precisely why the government’s recognition of startups as engines of growth was so consequential. Startups had been happening anyway. The policy push accelerated the pace.
The Startup India mission
The Startup India Initiative was launched on 16 January 2016 at Vigyan Bhawan, which marked a watershed moment. I did not attend because my father had passed away earlier that month and the family was in mourning. However, for someone who had spent two decades building an internet business, seeing entrepreneurship receive focused policy attention was significant. The recognition that startups would be crucial for New India’s economy positioned entrepreneurship as central to the nation’s growth strategy.
The initiative introduced a comprehensive Action Plan addressing regulatory burden, funding access, and ecosystem development. Company incorporation, which once took months, now happens in days through online portals. The concept of self-certification replaced cumbersome inspection processes. These weren’t mere procedural changes; they signalled that the government viewed startups as partners in nation-building.
Fund of Funds revolution
One of the most significant policy contributions has been the government’s Fund of Funds for Startups, which is managed by Small Industries Development Bank of India (SIDBI). Having served on the Venture Capital Investment Committee, I’ve witnessed its transformative impact firsthand. The Fund, with its corpus of Rs 10,000 crore, didn’t just provide capital—it kickstarted an entire ecosystem of Indian venture capital funds.
When the government commits as an anchor investor, it provides validation that helps funds raise capital from other limited partners. By November 2023, the scheme had facilitated investments totalling Rs 17,534 crore in 938 distinct startups. The requirement for Alternative Investment Funds to invest at least twice the amount received from the Fund of Funds in eligible startups has channelled considerably more capital into the ecosystem. This multiplier effect has been instrumental in addressing the funding gap that once constrained Indian entrepreneurship.
Tax reforms and regulatory evolution
The three-year tax holiday for eligible startups helped young companies preserve precious capital for growth. More significantly, the eventual exemption from angel tax, achieved through sustained advocacy from the ecosystem and government responsiveness, removed a major impediment to early-stage funding. The reduction in corporate tax rates further improved the operating environment.
The introduction of regulatory sandboxes by the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and Insurance Regulatory and Development Authority of India (IRDAI) marked an evolution in how India approached financial innovation. These controlled environments, where startups could experiment, enabled small finance banks and payment banks to emerge. Rather than stifling innovation with rigid regulations, policymakers created space for experimentation while maintaining oversight.
Digital public infrastructure
The government’s investment in digital public infrastructure has been foundational. The India Stack, combining Aadhaar for identity, UPI for payments, and affordable data connectivity, created platforms that enable innovation at scale. Customer onboarding used to take days, but now happens in minutes.
The Unified Payments Interface, launched in April 2016, exemplifies successful public digital infrastructure. By 2024, UPI was processing over 12 billion transactions monthly, more than the US, UK, Germany, and France combined. The vegetable vendor, the autorickshaw driver, the small kirana store owner: all became part of the digital economy. This wasn’t just financial inclusion; it was economic transformation at its most fundamental level.
The JAM trinity (Jan Dhan, Aadhaar, Mobile) proved its worth during COVID-19, enabling direct benefit transfers to bank accounts during the crisis. The ability to reach citizens directly, bypassing intermediaries, demonstrated the value of building robust digital infrastructure.
Telecommunications and connectivity
The policy environment that enabled Reliance Jio’s launch in September 2016 deserves recognition. Data that once cost Rs 250 per GB became virtually free. At Info Edge—an Indian technology company—we saw immediate impact: traffic shifted dramatically to mobile, with tier 2 and tier 3 cities suddenly becoming major growth contributors. Auto drivers began using navigation apps, farmers started watching agricultural tutorials online, and small shop owners discovered direct sourcing from wholesalers.
Fostering innovation culture
The Atal Innovation Mission has established over 10,000 Atal Tinkering Labs in schools, introducing entrepreneurial thinking to children. This investment in grassroots innovation will yield returns for decades. When young Indians see entrepreneurship celebrated at the highest levels, when the Prime Minister Narendra Modi speaks about startups at major forums and entrepreneurs are invited to national events, it sends a powerful signal to society.
The geographic democratisation of startups owes much to these policies. Previously concentrated in Bengaluru, Delhi-NCR, and Mumbai, incredible companies now emerge from Jaipur, Indore, Kochi, and smaller cities. Digital infrastructure and policy support have made location less determinative of entrepreneurial success.
Government responsiveness
What distinguishes this policy era is the government’s willingness to engage with the startup community and respond to concerns. The resolution of angel tax issues, the streamlining of compliance requirements, and the continuous refinement of startup recognition criteria all demonstrate dialogue between policymakers and entrepreneurs, leading to positive outcomes.
The National Startup Advisory Council provides a formal mechanism for ecosystem feedback. This institutionalised engagement ensures policies remain relevant and responsive to ground realities.
Also read: The Budget faces a precarious illusion. Low inflation masks a deeper fragility
The path forward
No government’s work is ever complete. Continued attention to innovation in AI and deep-tech, intellectual property protection, and ease of doing business remains important. But the framework and momentum established in this decade provide a strong foundation.
The normalisation of entrepreneurship as a legitimate career path owes much to the visibility and emphasis that policy has given to startups. This cultural shift may prove as valuable as any specific intervention. When middle-class parents now support their children’s entrepreneurial ambitions—a dramatic change from my generation—it reflects a transformation in national consciousness that policy helped catalyse.
India’s startup revolution gained momentum through deliberate policy choices. The combination of regulatory reform, funding support, digital infrastructure, and cultural celebration of entrepreneurship has created unprecedented opportunity. The best is yet to come.
As told to Rishabh Katiyar, who is part of the investment team at Info Edge Ventures.
Sanjeev Bikhchandani is the Founder and Executive Vice Chairman of Info Edge, and a member of the National Startup Advisory Council. He tweets @sbikh. Views are personal.
(Edited by Ratan Priya)