Indian Start Scenario: India Towards Its True Potential
Business

Indian Start Scenario: India Towards Its True Potential

India is among the top five countries in the world in terms of the number of new companies founded. India has had tremendous growth towards innovative startups and has become the third fastest growing hub for tech startups in the world.

The introduction of initiatives like GST and Make In India have given a boost to the startup economy. Indian startups are moving into the top line and are expected to increase in size and number in the coming year. India is measured to be home to around 4,200 new businesses, creating more than 85,000 job opportunities. With investment of more than $5 billion in 2015 and three to four new start-ups every day, the number of start-ups in India is projected to rise to more than 11,500 by 2020, and job creation from these entrepreneurs it will reach 250-300k. The number of investors has also multiplied in recent years.

recent developments

Indian startups have seen many developments in the second quarter of 2017. From being selected in Google’s accelerator program to raising funds from Chinese investors, the ecosystem of startups has been quite encouraging. Google selected six Indian startups for the accelerator program in July 2017. Startups using the latest technologies such as machine learning and artificial intelligence have been chosen for the same.

restrictions

Despite these promising statistics, only 9% of Start-Ups have female founders/co-founders. Delhi NCR, Bangalore and Mumbai, along with Hyderabad, Pune and Chennai account for more than 90% of the Start-Ups in India. The focus is largely limited to information technology-enabled products and services, including e-commerce, aggregators, analytics, health technology, and online payments. Amidst all of this, the product start-up sector has been largely ignored. A major factor behind India’s growth is software-enabled companies like Flipkart and Ola. Rarely have hardware product companies achieved such success. The reason for this can be attributed to a lack of funds. India’s ecosystem clearly has no shortage in terms of capital. However, only a very small amount of this capital reaches these startups. Furthermore, startups in India spend five times more effort to raise funds compared to American startups.

This is where government intervention is required. Through the provision of alternative sources of financing and through a partnership between industry and academia, the government can facilitate and accelerate the rate of growth. Alternative debt financing instruments will help start-ups and other small businesses overcome the problem of lack of adequate collateral, limited cash flow and the high risk involved. While direct support to start-ups and the right skills to start and run a business are important, the ease of doing business in the country is also very important. This includes the ease of starting a business, obtaining the corresponding permits, accessing credit, paying taxes, etc. Labor laws in India are also outdated. Therefore, appropriate government policies are required for the Indian startup ecosystem to reach its true potential.

However, the government and international organizations are investing in innovative ideas. Monetary and infrastructure support is accelerated. Start-ups are also making good use of the facilities available and are showing signs of good times. Certainly this cannot be dismissed as a passing trend and it will surely change the way the markets work today in India. Government initiatives are also expected to play a vital role in the bright future of the startup ecosystem. For example, the Indian government’s department of trade and industry plans to organize a meeting of start-ups from South Asian regions to exchange new ideas and increase interaction among them, thus showing confidence in start-ups.

Therefore, the latest quarter scenario suggests that investor interest in financing India’s startups remains strong. The coming quarter is likely to be more attractive due to economic reforms and their implementation. Startups are now focusing on cutting losses, increasing their overall valuation, and achieving operational excellence. These qualities, coupled with positive investor sentiments and government support, may see India’s startup ecosystem reach new heights in the near future.

Leave a Reply

Your email address will not be published. Required fields are marked *