Startups and the Indian Economy: Growth, Challenges, and Future Prospects
School of Commerce, Manav Rachna International Institute of Research & Studies, India
Abstract
India’s startup ecosystem has evolved from a niche community of technology ventures into a broad-based engine of innovation, jobs, and productivity. This paper examines how startups contribute to India’s economic growth; maps sectoral trends in funding and value creation; assesses enabling policies and digital public infrastructure; and identifies the key constraints that must be resolved for sustainable, inclusive scaling. Drawing on recent reports, official statistics, and industry sources, the article analyses the post-2021 “funding winter” and its gradual thaw, the changing mix of sectors attracting capital, and the implications of regulatory changes for venture formation and exits. Case studies of fintech/UPI, open networks (ONDC), SaaS, climate tech, and space tech illustrate India’s distinctive pathways to innovation. The paper concludes with scenario-based forecasts to 2030 and a set of policy and industry recommendations.
Highlights
Introduction: Over the past decade, India has emerged as one of the world’s most dynamic startup ecosystems. Started as a consumer internet movement, it has expande...
Background: Size and Scope of India’s Startup EcosystemIndia’s Department for Promotion of Industry and Internal Trade (DPIIT) has progressively expanded formal r...
Methodology: The present study adopts a descriptive and exploratory research design to examine the role of startups in shaping the Indian economy, their growth tra...
Results: For policymakers, the focus should be on creating a stable and principle-based digital regulatory environment while expanding domestic pools of ventur...
Discussion: For policymakers, the focus should be on creating a stable and principle-based digital regulatory environment while expanding domestic pools of ventur...
Conclusion: India’s startup ecosystem stands at a pivotal moment. Having matured from a growth‑at‑all‑costs model to a more disciplined and sustainable phase, sta...