Startups got 3.8 times funding from private sector than from govt schemes: DPIIT

Secretary with the Department of Promotion of Industry and Internal Trade (DPIIT) Amardeep Singh Bhatia has said that start-ups got over 3.8 times funding from the private sector, compared to funds disbursed by existing government schemes.

Speaking to the media ahead of the 10th anniversary of the Startup India initiative, Bhatia said the number of start-ups has grown from around 400 in 2016 to over 2 lakh. He attributed this growth to the expanding Alternate Investment Fund (AIF) ecosystem, supported by the Fund of Funds scheme for recognised start-ups and incentives such as income tax benefits under Startup India.

Prime Minister Narendra Modi is scheduled to inaugurate National Startup Day on January 16 in New Delhi. The Secretary said several e-commerce companies are marking the occasion on a large scale this year.

Stating that R&D from laboratories is increasingly percolating into incubators, Bhatia said he was “wary” of using the term “unicorn” for successful start-ups, noting that valuations can change over time. He said the focus remains on deep-tech to boost manufacturing by leveraging the domestic market. The DPIIT expects new manufacturing facilities as supply chains deepen, leading to the production of new products in India.

The Secretary said start-ups are being encouraged to innovate, provide access to shared facilities, lower costs, and build components for large companies.

Over the past few months, DPIIT is learnt to have held discussions with several funds interested in providing long-term patient capital to Indian start-ups, in addition to the ₹1 lakh crore earmarked for direct R&D funding, private investment, and support from other schemes. With DPIIT linking R&D labs to the start-up ecosystem, measures have been announced to promote deep-tech start-ups engaged in advanced research aimed at developing commercial products.

Bhatia said $51 billion has flowed into India through the foreign direct investment (FDI) route over the past six months, and that DPIIT will facilitate 75 grand challenges this year, sponsored by corporate houses.

Launched in January 2016, the Startup India Action Plan is implemented through three flagship schemes—the Fund of Funds for Startups, the Startup India Seed Fund Scheme, and the Credit Guarantee Scheme for Startups—aimed at supporting start-ups across sectors and stages.

Calling innovation synonymous with risk, Bhatia said 100% success cannot be expected from new businesses and stressed the need for greater societal acceptance of risk and failure. He noted that less than 3% of start-ups—around 6,400 companies—have shut down in India, which is in line with normal business trends. He added that disruption in the services sector could lead to the creation of large research facilities with incubation centres. The DPIIT Secretary also said ease has improved for investors to bring capital into India and exit, alongside clearer pathways for long-term investment.