Nurturing Startups

Startup India
Startup India
Startup India

Startup India

Hindustan mein koi aisa zila na ho, aisa block na ho jaha koi startup na shuru ho. (There should not be any district, any block in India where there is no startup).'Start-up India, Stand up India' – Shri Narendra Modi, Prime Minister of India

On January 16, 2016, the inception of Startup India marked a significant milestone, representing the flagship initiative of the Government of India. This visionary program is designed to nurture entrepreneurship and fuel innovation by cultivating an environment conducive to the growth of startups, with the ultimate goal of transforming India into a nation of job creators rather than job seekers.

Startup India serves as a resounding testament to the Indian government's unwavering dedication to positioning India as a hub for innovation, design, and startups. This initiative is strategically positioned to drive sustainable economic growth and create extensive employment opportunities on a large scale.

The comprehensive action plan crafted by the Government of India for Startup India encompasses every facet of the startup ecosystem. With this well-structured Action Plan, the government aspires to expedite the proliferation of the Startup movement, extending its reach beyond the digital and technology sectors to encompass diverse fields such as agriculture, manufacturing, social services, healthcare, education, and more. Moreover, this expansion aims to encompass a wider geographical scope, stretching from established tier 1 cities to tier 2, tier 3 cities, semi-urban areas, and even rural regions.

Key Features

Startup India boasts several noteworthy features that set it apart

  • Streamlined Facilitation and Support: The initiative places a strong emphasis on simplifying procedures and providing essential guidance to startups, ensuring a smoother journey from inception to growth.

  • Financial Backing and Incentive Programs: Startup India offers robust financial support and a range of incentives, empowering startups with the resources they need to thrive.

  • Collaboration Between Industry and Academia: It fosters meaningful partnerships between industries and educational institutions, promoting knowledge exchange and innovation. Additionally, it encourages the establishment of incubation centers to nurture new ideas and startups.

Startup India's 19-Point Action Plan

Startup India's comprehensive 19-Point Action Plan encompasses the following key elements

  • Self-Certification Compliance: Streamlined compliance processes through self-certification for startups.

  • Startup India Hub: A single point of contact for startups to access information and support.

  • Mobile App and Portal: Simplified registration, compliance filing, and information access through a user-friendly mobile app and portal.

  • Legal Support: Fast-tracking and an 80% reduction in patent registration fees to encourage innovation.

  • Public Procurement Norms: Relaxed norms for public procurement to facilitate startup participation.

  • Exit Simplification: Easier and faster exit mechanisms for startups.

  • Funding Support: Access to funding through a Fund of Funds corpus of INR 10,000 crore.

  • Credit Guarantee Funding: Assistance with credit guarantees for startups.

  • Tax Benefits: Tax exemptions on capital gains, 3-year income tax exemptions, and exemptions on investments above Fair Market Value (FMV).

  • Startup Fests: Annual national and international startup festivals.

  • Innovation Hubs: Launch of world-class innovation hubs under the Atal Innovation Mission (AIM).

  • Incubator Network: Establishment of a countrywide incubator network.

  • Innovation Centers: Creation of innovation centres to bolster incubation and research and development (R&D).

  • Research Parks: Development of research parks to drive innovation.

  • Biotechnology Entrepreneurship: Promotion of entrepreneurship in the biotechnology sector.

  • Student-Focused Innovation: Innovative programs for students to encourage entrepreneurship.

  • Incubator Grand Challenge: An annual challenge to stimulate incubator innovation.


CPCB has granted industries categorized as "white" an exemption from all mandatory self-certifications required by the three environment-related Acts mentioned in the Startup India Action Plan: The Water (Prevention & Control of Pollution) Act, 1974; The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003; and The Air (Prevention & Control of Pollution) Act, 1981.

Start-up India Hub

A platform has been established to facilitate knowledge exchange and offer financial assistance, serving as a means to address inquiries and provide guidance and support to startups.

Mobile App and Portal

To streamline the process and enhance accessibility for startup registration, tracking registration status, compliance filing, and collaboration with various startup ecosystem partners such as venture capitalists and, incubators, an online platform has been established.

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The Start-up India Intellectual Property Protection

The Start-up India Intellectual Property Protection (SIPP) Scheme expedites the processing of startup patent applications, offering a panel of facilitators to aid in IP application submissions. The government covers the facilitation costs, and there's an 80% rebate on patent filing fees.

Breezy Procurement and Exits

Start-ups in the manufacturing sector are exempted from the criteria of "prior experience/ turnover", whenever a tender is floated by a government entity or a PSU, without any relaxation in quality standards or technical parameters.

In light of the Insolvency and Bankruptcy Code of 2016, startups can now be wound up within 90 days, making of an application for winding up on a fast-track basis.

Fund of Funds

A 'fund of funds of INR 10,000 crores for Start-ups has been established, which is managed by the Small Industries Development Bank of India. The fund invests in SEBI-registered Alternative Investment Funds, which, in turn, invest in startups.

The Fund of Funds can contribute to a maximum of 50% of the stated daughter fund size. To be able to receive the contribution, the daughter fund should have already raised the balance of 50% or more of the stated fund size, as the case may be.

Tax- Exemption  

Three years income tax exemption for the start-ups

Launch of Atal Innovation Mission ("AIM") with Self-Employment and Talent Utilization Program ("SETU")

Established under NITI, this mission will be a platform for the establishment of sector-specific Incubators, including in PPP mode, the establishment of 500 Tinkering Labs, providing pre-incubation training, seed-funding of start-ups, the institution of innovation awards, the launch of Grand Innovation Challenge Award to motivate start-ups. A sum of Rs.150 crore has been embarked already.

Harnessing Incubator Set-up

The government is encouraging already established incubation centers and is longing to scale up 31 more. The eligibility for the same is set out in the Guidelines for Scale-up Support to Established Incubation Centres under the Atal Innovation Mission issued by the government.

RBI Proposed Regulatory Relaxations

Facilitating startup enterprises, regardless of their industry, to attract foreign venture capital investments and allowing for the seamless transfer of shares from Foreign Venture Capital Investors to both residents and non-residents.

An Indian startup that has an overseas subsidiary can establish a foreign currency account with a foreign bank to receive foreign exchange earnings from exports/sales conducted by the startup or its overseas subsidiary. The amounts held in these accounts, corresponding to exports from India, should be remitted back to India within the stipulated timeframe for export realization.

Furthermore, foreign exchange payments received by an Indian startup as a result of sales/exports carried out by the startup or its overseas subsidiaries can be credited to the Exchange Earners Foreign Currency (EEFC) account maintained by the startup in India, as per the official notification.

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