India's Thriving Start-up Ecosystem: Opportunities for S&T Innovation
National Startup Day, January 16
Nimish Kapoor
India's startup ecosystem has evolved dramatically over the past decade. From just 350 start-ups in 2014, the country is now home to over 1.39 lakh startups as of May 2024. This growth has been accompanied by significant investment, particularly in high- tech sectors like space exploration and Web 3.0. Notably, India has seen over Rs.1,000 crore (approximately US $ 120.21 million) invested in space startups between April and December 2023. India's tech landscape raised US $ 11.3 billion from investors in 2024, marking a modest 6 percent increase from US $ 10.7 billion raised in the previous year. Today, India is home to more than 110 unicorns, with startups making notable strides even in critical and emerging sectors such as space technology.
India's rise as a global hub for technological innovation is reflected in its impressive leap in the Global Innovation Index, moving from 81st in 2015 to 40th in 2023. This surge underscores the country's growing prowess in research and development, especially in space exploration, artificial intelligence, and deep- tech. The nation's government, along with private research institutions, incubators, and accelerators, has created a robust support network to encourage the growth of science and technology entrepreneurs.
Indian entrepreneurs are increasingly focusing on solving pressing societal challenges through innovative solutions in healthcare, education, and environmental sustainability. A key feature of Indian innovation is the emphasis on low- cost, frugal technology solutions that have high functional impact, often addressing the needs of underserved populations.
India's tech ecosystem is poised for even more growth. The nation ranks third globally as a desirable location for technological investments, reflecting its significance in the global innovation landscape. In particular, India's AI market is growing rapidly, with a Compound Annual Growth Rate (CAGR) of 25-35%, and is expected to reach approximately US$ 17 billion by 2027. Additionally, the adoption of AI in key industries across India reached about 48% in FY 2024, with expectations for further growth of 5-7% in FY 25.
The Indian DeepTech startup sector has also seen a surge in funding, with US$ 586 million raised in 2023, primarily at the seed stage. Alongside this, India's information technology sector is projected to reach US$ 138.9 billion in 2024, growing at a rate of 13.2% from the previous year. The engineering research and development (R&D) and product development market is also poised for significant growth, projected to expand at a CAGR of 13% from 2019 to 2025, reaching US$ 63 billion.
The Government of India is actively driving innovation through initiatives such as research parks, technology business incubators, and funding support for startups in high- tech fields. In the Interim Budget 2024-25, the government allocated Rs. 1 lakh crore (US$ 12 billion) to foster innovation and startups, with a special focus on DeepTech startups in defence. This investment will help bridge gaps in research and product development across various sectors, including agriculture, healthcare, space research, and nuclear power.
The private sector is also making major strides, with Tata Electronics partnering with Powerchip Semiconductor Manufacturing Corp (PSMC) Taiwan to establish a US$ 11 billion semiconductor unit in Gujarat, generating 20,000 skilled jobs. Tata's TSAT, along with two large American conglomerates, will invest
US$ 3.3 billion in a semiconductor plant in Assam, creating 27,000 jobs. Similarly, CG Power has teamed up with Renesas Electronics Corporation, Japan, and Stars Microelectronics, Thailand, to set up a semiconductor unit in Gujarat, with an investment of approximately US$ 915 million (Rs. 7,600 crore).
India's start- up ecosystem is not only thriving but is also playing a crucial role in addressing global challenges through innovation. With continued government support and private sector investment, the country is poised to continue its upward trajectory as a global leader in science and technology entrepreneurship. Following agencies and schemes are providing financial support to S&T startups:
Department of Science and Technology (DST) Fosters Innovation and Startups
The Department of Science and Technology (DST), Government of India plays a crucial role in supporting leading academic institutions to establish Technical Research Centres. One such centre, located at the Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR), Bengaluru focusses on nurturing startups with high- risk technologies that have significant potential in global markets.
In addition, a robust innovation and incubation ecosystem is thriving at various higher education institutions across the country. For instance, the IIT Madras Research Park acts as a key incubator, supporting early- stage research startups by providing access to state- of- the- art infrastructure, mentorship, scale- up strategies, and seed funding. Similarly, institutions like the Manipal Academy of Higher Education (MAHE) have established Technology Transfer Offices. These offices aim to enhance the commercialisation potential of internal research projects, transforming them into viable business models and securing relevant intellectual property rights.
Under the DST, the National Mission on Interdisciplinary Cyber- Physical Systems (NM- ICPS) has made significant strides in advancing India's technological land- scape. The mission, aimed at fostering innovation and development in emerging technologies, has successfully established 25 Technology Innovation Hubs (TIHs) across India. These hubs operate in diverse areas of advanced technology and focus on four key areas: Technology Development, Human Resource Development, Entrepreneurship Development, and Industrial Collaborations.
As of December 2023, the mission has made remarkable progress, developed 311 technologies and created 549 technology products. It has also trained over 63,000 human resources and generated 1,200 jobs, contributing to the country's growing technological work- force. Additionally, NM-ICPS has facilitated 124 international collaborations, further strengthening India's position in the global tech arena.
DST has announced plans to establish 75 Science, Technology, and Innovation Hubs across the country, specifically aimed at empowering Scheduled Castes (SCs) and Scheduled Tribes (STs). These hubs will provide opportunities for SC and ST communities to actively contribute to the socio- economic development of the nation, enhancing their participation in science and technology sectors.
NIDHI Programme - Empowering India's Startup Ecosystem
National Initiative for Developing and Harnessing Innovations (NIDHI) programme of DST, Government of India aims to transform knowledge- based and technology- driven ideas into successful startups. The programme is designed to support budding entrepreneurs in the fields of science and technology, fostering innovation across the country.
Since its inception, the government has invested approximately Rs. 900 crore into NIDHI, which has significantly contributed to the development of India's startup ecosystem. The programme has played a pivotal role in nurturing and scaling up science and technology- based ventures.
To broaden its reach and impact, NIDHI has expanded its infrastructure and presence in Tier II and Tier III cities. This includes the establishment of 8 new Inclusive Technology Business Incubators (iTBI) and 10 NIDHI Entrepreneur- In- Residence (EIR) Centres, designed to support early- stage startups with mentorship, funding, and resources.
Further strengthening the ecosystem, the DST- GDC IITM I- NCUBATE Programme (Department of Science and Technology - Grand Challenges Division, Indian Institute of Technology Madras, Innovation and Incubation Programme for Advancing Technology Entrepreneurship) was launched to build a robust pipeline of deep- tech startups across India, encouraging innovation in cutting- edge technologies.
Additionally, the NIDHI initiative has supported 11 new projects under the Advanced Manufacturing Technologies (AMT) programme. These projects focus on developing technologies for surface engineering and precision manufacturing, further promoting technological advance-ments and innovation in critical sectors.
Technology Development Board: Driving Innovation and Technological Advancement in India
The Technology Development Board (TDB), functioning under the Department of Science & Technology (DST), Government of India, plays a critical role in advancing technological innovation across diverse sectors. TDB supports Indian industries and agencies in the development and commercialisation of indigenous technologies, as well as in adapting imported technologies for broader domestic use. Its primary objective is to accelerate technological progress, making India a global leader in various high- tech industries.
One of TDB's significant missions is to encourage the development of socially relevant and profitable technologies. By providing financial assistance in the form of equity, soft loans, and grants, TDB aims to support projects that can contribute to India's industrial growth and global competitiveness. The board also fosters innovation in small enterprises, even at the risk of failure, to nurture novel ideas and technologies that may not otherwise receive the required financial backing.
In 2024, TDB made considerable strides in advancing technology. It signed seven loan agreements supporting projects worth Rs. 435.94 crore, of which Rs. 220.73 crore was provided by TDB. These projects span critical sectors such as healthcare, space, energy, agriculture, and engineering. This initiative reflects the board's commitment to supporting technological advancements that will drive economic and social progress in India.
In line with the government's vision of a 'Garbage- Free' India under the Swachh Bharat Mission-Urban 2.0, TDB called for proposals from Indian companies working on indigenous technologies for waste management, encouraging the development of 'Waste to Wealth' technologies. These initiatives aim to address urban waste challenges while generating economic value through sustainable technology interventions.
TDB also supports the startup ecosystem in India through its Seed Fund initiative. In collaboration with the Entrepreneurship Development Center (Venture Center), TDB launched a Seed Support System for Start- ups in Incubators, with a Rs. 1 crore corpus. The fund is designed to provide early- stage financial support to technology- driven startups, enabling them to scale and commercialise their innovations. Seed Fund assistance can go up to Rs. 25 lakh, ensuring that promising ideas and technologies are nurtured and brought to market. Additionally, the SEED Fund helps post- Proof of Concept (PoC) startups by offering equity assistance of up to Rs. 30 lakh, bridging the gap between initial funding and venture capital.
TDB's international collaborations also reflect its global outreach and commitment to fostering innovation on the world stage. In 2024, the board facilitated twelve bilateral projects with international partners, contributing Rs.29.64 crore. These projects cover diverse sectors, including healthcare, IT, energy, agriculture, and defence. The collaborations involve esteemed partners from countries like Israel, the United Kingdom, Spain, South Korea, Sweden, and Singapore, underscoring India's growing role in global technological innovation.
The partnership between TDB and the Small Industries Development Bank of India (SIDBI) further strengthens the support provided to Micro, Small, and Medium Enterprises (MSMEs). Through a Memorandum of Understanding (MoU), both organisations aim to streamline access to credit for MSMEs working on technological development, thus fostering increased innovation, job creation, and economic growth in this vital sector.
Recently, TDB awarded a grant to Agnikul Cosmos, a pioneering space technology startup. Incubated at IIT- Madras, the company is developing a Modular Configurable Launch Vehicle for 100 kg payloads. Supported by TDB, Agnikul Cosmos achieved a historic milestone with the successful launch of Agnibaan, the world's first rocket using a single- piece 3D- printed engine. This project aims to revolutionise satellite launches by making them more afford-able, efficient, and scalable.
BIRAC Boosts India's Biotech Startups with Strategic Financial Support
The Biotechnology Industry Research Assistance Council (BIRAC), funded by the Department of Biotechnology (DBT), Government of India has launched several initiatives to build and support India's biotech ecosystem across healthcare, agriculture, and industrial biotechnology. These include a range of funding programmes and a network of bio- incubators. BIRAC provides project- based funding to startups for product and technology development through schemes such as the Biotech Ignition Grant (BIG), Small Business Innovation Research Initiative (SBIRI), and Biotechnology Industry Partnership Programme (BIPP). With grants up to Rs.200 lakh, the fund targets incubators under BIRAC's Bio- NEST (Bio- incubators Nurturing Entrepreneurship for Scaling Technologies) programme and helps startups with equity investments, equipment purchases, and operational costs.
BIRAC's funding initiatives cover diverse biotech sectors, including clean energy and emerging technologies. Its support spans from product development to pre- commercialisation. However, there are additional financial needs once a technology or product is market- ready, such as validation in target markets and large- scale commercialisation. To address this, BIRAC introduced the Product Commercialisation Programme Fund (PCP Fund), providing crucial funding for post- validation stages.
The LEAP Fund (Launching Entrepreneurial Driven Affordable Products) is another key initiative aimed at helping biotech, med- tech, and life sciences startups pilot and commercialise innovative products. The fund offers up to Rs. 1 crore per startup, with Rs. 5 crore allocated to selected BioNEST incubators.
The BIRAC Incubator SEED Fund (Sustainable Entrepreneurship and Enterprise Development) provides financial support to biotech and life sciences startups in their early stages.
The BIRAC AcE (Accelerating Entrepreneurs) Fund, a "Fund of Funds," supports research and development in biotech sectors like healthcare, agriculture, and sanitation. Partnering with SEBI- registered Alternative Investment Funds (AIFs), the AcE Fund provides risk capital for high- priority innovations. With capital commitments up to Rs.30 crore per fund, it supports startups with equity investments up to Rs.7 crore. This initiative aligns with the Make in India vision and seeks to foster sustainable product development.
BIRAC has launched the 'Amrit- Grand Challenge Programme', named 'JANCARE', which aims to identify and support 75 start- ups in diverse sectors such as telemedicine, digital health, and mHealth. The programme will leverage Big Data, Artificial Intelligence, Block-chain, and other emerging technologies to drive innovation and address key challenges in healthcare and other sectors.
Over the last five years, BIRAC's efforts have significantly impacted India's biotech startup ecosystem. Programmes like the BIG (Biotech Ignition Grant) have become India's largest early- stage funding platform for biotech entrepreneurs, supporting nearly 500 startups in their journey toward cutting- edge product development.
MeitY Launches Initiatives to Foster Innovation and Support Startups
The Ministry of Electronics and Information Technology (MeitY), Govt. of India is spearheading efforts to drive technological self- sufficiency and innovation in India through various initiatives aimed at supporting startups and fostering the development of emerging technologies. MeitY has operationalised Centres of Excellence (CoEs) in several key areas of national interest to build capabilities that will position India as a global innovation hub.
One of the key initiatives launched by MeitY to further support the growth of startups is the SAMRIDH (Start- up Accelerator Programme of MeitY for Product Innovation, Development and Growth). This programme is designed to enhance the capabilities of existing and emerging accelerators in India by selecting and supporting high- potential software product- based startups. SAMRIDH provides the necessary resources and expertise to help these startups scale their operations, facilitating the development of innovative products that can cater to both domestic and international markets. SAMRIDH aims to support 300 software product startups over four years with an outlay of Rs. 99 crore, providing funding up to Rs. 40 lakh per startup through accelerators to scale their businesses.
MeitY has also introduced the Support for International Patent Protection in Electronics & Information Technology (SIP- EIT) scheme. This initiative aims to encourage Indian Micro, Small, and Medium Enterprises (MSMEs) and startups to file for international patents, enhancing the recognition of their innovations on a global scale. By promoting international patent filings, MeitY seeks to underscore the importance of Intellectual Property (IP) and encourage Indian startups and MSMEs to protect their innovations and expand their global footprint.
Department of Defence Production Launches iDEX to Foster Innovation and Self- Reliance in Defence Sector
The Department of Defence Production under the Ministry of Defence, Govt. of India has launched the iDEXinitiative (Innovations for Defence Excellence), aimed at achieving self- reliance and promoting technological innovation in the defence and aerospace sectors. The initiative focusses on engaging MSMEs, startups, research and development institutes, and academic institutions to drive advancements in defence technology.
iDEX offers grants to these entities to support and carry out R&D activities that are critical for developing cutting- edge solutions in defence. The initiative is designed to encourage collaboration between the government and the private sector, fostering a robust ecosystem for innovation that will enhance India's defence capabilities and reduce dependence on imports.
By promoting innovation and encouraging the participation of diverse stake-holders, iDEX aims to strengthen India's defence sector, making it more self- sufficient and globally competitive. The programme underscores the government's commitment to nurturing home- grown talent and fostering technological breakthroughs that can support the nation's defence needs.
India's thriving startup ecosystem is a testament to the nation's commitment to innovation and technological advancement, positioning it as a global leader in science and technology. With robust support from the government and private sector, India is making significant strides in sectors like space technology, AI, biotech, and defence. The collective efforts of institutions, research parks, funding bodies, and initiatives like iDEX, SAMRIDH, and NIDHI are paving the way for a future where India leads in innovation.
As India continues to nurture its startup ecosystem, the nation is moving closer to realising its vision of becoming a Viksit Bharat by 2047. This vision aims to build a self- reliant, technologically advanced, and globally competitive India, where innovation fuels sustainable growth and addresses societal challenges. Through collaboration, investment, and continued focus on entrepreneurship, India is poised to shape a brighter, more inclusive future for all.
Government's Efforts to Foster Startup Ecosystem in India
· As on December 25, 2024, 157,066 startups have been recognised by Department for Promotion of Industry and Internal Trade (DPIIT) and 759,303 users are registered on the portal.Startups have created over 1.6 million jobs across the country.
· India is home to more than 73,000 startups with at least one- woman director, all of which have been recognised under the Startup India Initiative. This represents nearly half of the 1,57,066 startups supported by the government.
· To support the growth of this vibrant ecosystem, the Government unveiled the Startup India Action Plan on January 16, 2016. The plan consists of 19 action items across key areas such as simplification, funding support, incentives, and industry- academia partner- ships.
· The Fund of Funds for Startups (FFS) initiative has allocated Rs. 10,000 crore to boost early- stage funding.
· Bharat Startup Knowledge Access Registry (BHASKAR) platform designed to centralise, streamline, and enhance collaboration among key stakeholders within the entrepreneurial ecosystem, including startups, investors, mentors, service providers, and government bodies.
· In addition to these initiatives, the Startup India Innovation Week is organised annually around National Startup Day (January 16) to bring together startups, investors, policy-makers, and other stakeholders to celebrate entrepreneurship and foster innovation.
(The author is a science communication specialist. Feedback can be sent to feedback.employment news@gmail.com)
Views expressed are personal.