Why in the News

India registered nearly 44,000 startups in 2025, the highest annual addition since the launch of Startup India in 2016, marking a decisive acceleration in entrepreneurial activity. The Prime Minister announced that India now hosts over 2 lakh startups and nearly 125 unicorns, reflecting a structural shift from a risk-averse economy to one driven by innovation, capital formation, and job creation. This scale-up positions India as the third-largest startup ecosystem globally, indicating a transformation in growth drivers over the past decade.

How has Startup India altered the scale of entrepreneurship in India?

1. Startup Proliferation: Expanded from fewer than 500 startups a decade ago to over 200,000 registered startups, indicating ecosystem maturity.
2. Annual Acceleration: Addition of 44,000 startups in 2025 alone, the largest single-year increase since inception.
3. Global Standing: Establishes India as the third-largest startup ecosystem, enhancing economic visibility and investor confidence.

What does the rise in unicorns indicate about ecosystem depth?

1. Unicorn Expansion: Growth from four unicorns in 2014 to nearly 125 active unicorns, reflecting scale viability.
2. Capital Maturity: Transition of unicorns towards initial public offerings (IPOs) signals capital market integration.
3. Employment Generation: Scaling startups contribute to job creation beyond traditional sectors, supporting inclusive growth.

How has societal perception of risk-taking changed?

1. Cultural Shift: Risk-taking normalised and respected, replacing preference for fixed-salary employment.
2. Entrepreneurial Aspiration: Acceptance of ideas previously considered fringe, strengthening innovation culture.
3. Labour Market Impact: Encourages self-employment and venture creation as mainstream career choices.

What role has state-backed risk capital played?

1. Fund of Funds (FoF): Over ₹25,000 crore invested through government-backed FoF mechanisms.
2. Capital Crowding-In: Public capital reduces early-stage risk, enabling private investment participation.
3. Policy Signalling: Demonstrates long-term state commitment to entrepreneurship.

Why is deep tech now a strategic priority?

1. FoF 2.0 Corpus: ₹10,000 crore approved in April 2025, with targeted deployment.
2. Sectoral Focus: Artificial Intelligence, Machine Learning, Quantum Technologies, Defence, Aerospace.
3. Gestation Support: Addresses long proof-of-concept cycles and capital intensity in frontier technologies.
4. Strategic Autonomy: Aligns startup policy with national security and technological self-reliance goals.

Conclusion:

A decade of Startup India demonstrates a decisive shift in India’s growth strategy from capital-scarce, risk-averse entrepreneurship to a scale-oriented, innovation-driven ecosystem. The record surge in startups, expansion of unicorns, and targeted deep-tech financing indicate that startups are increasingly complementing MSMEs and manufacturing, strengthening employment creation, capital formation, and India’s long-term economic resilience.

Value Addition

Startup India Mission

1. Launch Year: 2016
2. Nodal Ministry: Ministry of Commerce and Industry (DPIIT)
3. Core Objective: Enables innovation-led entrepreneurship through regulatory easing, funding access, and ecosystem support.
4. Policy Significance: Shifts India’s growth model from job-seeking to job-creating; strengthens formalisation and innovation capacity.

PYQ Relevance

[UPSC 2023] Faster economic growth requires increased share of the manufacturing sector in GDP, particularly of MSMEs. Comment on the present policies of the Government in this regard. 

Linkage: This question directly links to GS III (Economic Growth, Industrial Policy, MSMEs) by examining manufacturing-led growth as a driver of jobs and productivity. Government initiatives like Startup India, PLI schemes, and Fund of Funds strengthen MSME manufacturing, capital access, and scale-up, addressing this requirement.

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