IN NEWS: India’s Recognised Startups Cross 2.23 Lakh & Startup India Fund of Funds 2.0
Introduction
India’s startup ecosystem has reached a historic milestone, with over 2.23 lakh recognised startups as of 31 March 2026, reflecting strong growth under the Startup India Initiative (2016). The year 2025–26 recorded 55,200 new startups, marking a 51.6% annual increase, the highest ever. Simultaneously, the government has launched Startup India Fund of Funds 2.0 (₹10,000 crore) to deepen capital availability and strengthen innovation-led growth.
Growth Trends in Startup Ecosystem
India’s startup ecosystem has expanded significantly in terms of scale, employment, and inclusivity.
- Total recognised startups: Over 2.23 lakh
- New startups in FY 2025–26: 55,200 (51.6% growth)
- Employment generation: 23.36 lakh direct jobs
- Women participation:
- 1.07 lakh startups with at least one woman director/partner
- Nearly 48% representation
- Geographical spread:
- Present across all States & UTs
- Leading states:
- Maharashtra
- Karnataka
- Uttar Pradesh
- Delhi
- Gujarat
Government Support & Incentives for Startups
Startups recognised by DPIIT receive multi-dimensional support:
Fiscal Incentives
- 100% tax exemption on profits for 3 consecutive years (within 10 years)
- Angel Tax exemption
- Capital gains exemption for reinvestment
Operational Benefits
- Relaxed norms in:
- Public procurement
- Experience requirements
- Earnest money deposit (EMD)
Financial Support
- Seed funding grants up to ₹50 lakh
- Access to:
- Government e-Marketplace (GeM)
- Mentorship and incubation
Key Startup Schemes
1. Fund of Funds for Startups (FFS)
- Disbursement: ₹7,000+ crore to 135 AIFs
- Investment mobilised: ₹26,900+ crore
- Beneficiaries: 1,420+ startups
2. Startup India Seed Fund Scheme (SISFS)
- Corpus: ₹945 crore (fully committed)
- 219 incubators selected
- ₹605 crore approved to 3,400+ startups
- Extended for continued support
3. Credit Guarantee Scheme for Startups (CGSS)
- Guarantee cover increased:
- From ₹10 crore → ₹20 crore
- 410+ loans guaranteed
- Total value: ₹1,250+ crore
Startup India Fund of Funds 2.0
The government has introduced Fund of Funds 2.0 to enhance capital flow.
- Corpus: ₹10,000 crore
- Focus areas:
- Deep-tech startups
- Early-stage ventures
- Implementation agency: SIDBI
- Investment through:
- Alternative Investment Funds (AIFs)
Significance
- Strengthens innovation ecosystem
- Enhances capital accessibility
- Promotes high-quality job creation
- Boosts manufacturing and economic resilience
Role of Digital Platforms
- Government e-Marketplace (GeM):
- 38,600+ startups onboarded
- Facilitates public procurement participation
- Enhances market access
Implications for Indian Economy
- Drives innovation-led growth
- Strengthens MSME ecosystem
- Boosts employment generation
- Enhances women entrepreneurship
- Positions India as a global startup hub
- Supports Atmanirbhar Bharat & Make in India
STATIC PART
Startup India Initiative
- Launched: 2016
- Objective:
- Promote entrepreneurship
- Facilitate innovation and startups
- Provide financial and regulatory support
Department for Promotion of Industry and Internal Trade (DPIIT)
- Ministry: Ministry of Commerce and Industry
- Function:
- Startup recognition
- Industrial policy formulation
- Promotion of innovation ecosystem
SIDBI (Small Industries Development Bank of India)
- Role: Implementation agency for Fund of Funds 2.0
- Function:
- Financial support to startups via AIFs
Startup India Seed Fund Scheme (SISFS)
- Launched: 19 April 2021
- Outlay: ₹945 crore
- Objective:
- Support early-stage startupsfor:
- Proof of concept
- Prototype development
- Product trials
- Market entry
- Financial Assistance:
- Up to ₹20 lakh (grant)
- Up to ₹50 lakh (debt-linked instruments)
Credit Guarantee Scheme for Startups (CGSS)
- Objective:
- Provide collateral-free loans to DPIIT-recognised startups
- Reduce risk for banks and financial institutions
- Key Features:
- Loan support up to ₹20 crore
- Guarantee coverage:
- Up to 85% for loans up to ₹10 crore
- Facilitates credit access and capital mobilization
Conclusion
India’s startup ecosystem is transitioning into a mature, inclusive, and innovation-driven framework, supported by robust policy measures, financial schemes, and institutional backing. The expansion to 2.23 lakh startups and launch of Fund of Funds 2.0 signify a decisive step toward making India a global innovation powerhouse.
Updated – 17 April 2026 ; 06:47 PM |Financial Express, News On Air