Daring more India
The government initiative "Startup India" was launched on January 16, 2016. It is the Indian government's largest and most important startup program, initiated to make India a "land of employers", as the Indian government wrote at the time.
In 2024, almost ten years later, it can be said that The programme is a success story: 121,726 recognized and blockchain-certified start-ups have emerged since then. And as Piyush Goyal, Minister for Industry and Commerce, stated in the daily newspaper "The Hindu": "The success rate for start-ups in India is higher than in any other country in the world."
While much has been written about the Chinese start-up scene in Europe, India has always remained in the blind spot of European attention, even though the Indian start-up scene is just as promising as the Chinese one, if not even more so.
The most important developments at a glance:
- India is witnessing a record number of start-ups, indicating a strong annual growth trend.
- The remarkable regional distribution across all states, including the Andaman Islands, indicates that the entrepreneurial spirit has spread throughout the country, not just to the metropolitan regions.
- Straits Research forecasts that the market for digital transformation will reach a volume of 2.1 trillion US dollars by 2030, which corresponds to an average annual growth rate of 23.72 percent.
- 5,020 patent applications have been filed by start-ups so far
- Around 12 jobs are created per start-up. That's more than 1.4 million jobs - and we're only talking about Startup India-certified startups here. In addition to their innovative strength, start-ups have become the job engine of the Indian economy and, after just ten years, are among the key players in the country's economic development.
- And 44% of start-ups were founded by women or have a female CEO. The engine of change - including social change - is the state of Maharashtra with its capital Mumbai: this is where the highest number of women-led start-ups can be found in the country. (These numbers refer to start-ups that were founded with the help of "Startup India").
How has India achieved this success?
German start-ups have to be very strong now, but the Indian government has paved this path to success with over 39 legislative initiatives in the last ten years. To summarize, there have been three fundamentally important pillars:
- Cutting red tape
- Tax relief for companies and employees
- subsidies.
In 2015, the "India Startup Action Plan" was introduced by the government, which then really took off in 2016 with the establishment of "Startup India". As part of this action plan, start-ups were able to take advantage of a range of benefits, such as
- Tax incentives, including exemption from capital gains tax,
- State support for financing
- Preferential treatment of start-ups for public contracts
- The possibility of a self-certification system for compliance with labor and environmental laws
- A common platform for interaction between all stakeholders
- Funding of partnerships with universities
- Entitlement to 80% discount on patent application fees and 50% discount on trademark application fees.
- Free support for the registration of intellectual property through patent and trademark agents
- Further improvements were introduced with the Finance Act 2020: Employees in eligible start-ups do not have to pay tax for five years, but only afterwards or when they leave the company or sell their shares.
With these and many other measures, the Indian government has succeeded in creating an attractive environment for entrepreneurs and players in the startup ecosystem, which has led to this boom. Conditions that European or German start-ups can only dream of.
As part of the national roll-out of the action plan, various "challenges" were also repeatedly carried out, i.e. focusing on specific subject areas in which new ideas and therefore start-ups are sought.
One focus was the "Grand Challenge Agriculture" carried out by "Startup India", in which 12 pre-identified problems were defined together with the Ministry of Agriculture, for which startups were to find solutions. The challenge received over
1,066 applications were received for the challenge and after conducting five mentoring workshops with over 400 recognized agritech startups, multiple screenings and interviews, 20 innovative ideas were selected for upscaling. The final solutions were implemented by senior scientists and commissioners from the Ministry of Agriculture with support from the Startup India team.
Also in Germany, there is a small hub of Indo-German cooperation. On November 1, 2019, a joint declaration of intent was signed between Indian Prime Minister Narendra Modi and German Chancellor Angela Merkel to strengthen and expand startup cooperation between India and Germany. This gave rise to GINSEP, the "German Indian Startup Exchange Program", which was co-initiated by the Bundesverband Deutsche Startups e.V. and the Federal Ministry for Economic Affairs and Energy (BMWi) to expand Indo-German cooperation alongside a few other collaborations.
Even if, of course, one in five start-ups in India has to close down again because it doesn't make the long-term leap, the figures are impressive.
Germany simply needs to "dare more India", as Christian Wagner from the German Institute for International and Security Affairs wrote in "Stiftung Wissenschaft und Politik aktuell". It is worth taking a look at the subcontinent.