the initiative has expanded across all states and Union Territories, helping entrepreneurs establish ventures in sectors ranging from technology and healthcare to agriculture and manufacturing. The programme has emerged as a key pillar of India’s economic growth and job creation strategy.
Strong growth in startups and employment
The number of startups recognised under the initiative has grown steadily since its launch in 2016. In that year, only 502 startups were officially recognised. By 2025, the annual number of recognised startups had surged to nearly 49,429, demonstrating the accelerating pace of entrepreneurial activity in the country.
This expansion has translated into significant employment generation. Direct jobs created by recognised startups rose sharply over the years, reaching more than 21.9 lakh by the end of 2025. The surge highlights the growing role of startups in supporting India’s workforce and creating opportunities for skilled professionals, innovators, and young entrepreneurs.
The government has attributed this growth to targeted policies, improved access to funding, and regulatory reforms designed to make it easier for startups to launch and scale their operations.
Flagship funding schemes boost startup ecosystem
To strengthen financial support for startups, the government has introduced several flagship funding schemes, including the Fund of Funds for Startups (FFS), Startup India Seed Fund Scheme (SISFS), and Credit Guarantee Scheme for Startups (CGSS). These schemes provide capital support at different stages of a startup’s lifecycle.
The Fund of Funds for Startups, managed by the Small Industries Development Bank of India (SIDBI), has played a major role in enabling venture capital investments. As of December 2025, alternative investment funds supported under the scheme had invested ₹25,547.98 crore in 1,371 startups across 29 states and Union Territories. These startups alone have created over 2 lakh jobs.
The Startup India Seed Fund Scheme, launched in April 2021, focuses on early-stage startups by providing grants, debt, and convertible instruments through incubators. So far, incubators have approved ₹590.93 crore in funding for 3,271 startups, supporting the creation of over 22,600 jobs.
Meanwhile, the Credit Guarantee Scheme for Startups, introduced in 2023, enables startups to access debt funding by providing credit guarantees. As of December 2025, the scheme had supported 334 loans worth ₹808.18 crore, helping startups generate over 23,700 jobs.
Government expands tax relief and compliance reforms
In addition to financial support, the government has implemented several regulatory and tax reforms to reduce the compliance burden on startups. These measures are part of broader ease of doing business initiatives, including the Business Reform Action Plan, Jan Vishwas programme, and compliance reduction exercises.
Tax benefits have been expanded under Section 80-IAC of the Income Tax Act, which allows eligible startups to claim profit-linked deductions. The government has also introduced relief measures related to Employee Stock Option Plans (ESOPs), including deferred tax payments, making it easier for startups to attract and retain talent.
Further compliance relaxations under the Companies Act, 2013, allow startups to operate with fewer procedural requirements. For example, startups are permitted to hold fewer board meetings, issue stock options more flexibly, and accept convertible notes without stringent restrictions.
Goods and Services Tax (GST) reforms have also simplified registration, improved refund mechanisms, and reduced litigation burdens. These steps have helped startups improve cash flow, reduce administrative delays, and focus more on growth and innovation.
Impact studies highlight economic and innovation benefits
Impact assessment studies of major startup schemes have reported improvements in revenue growth, job creation, and investor participation. The Fund of Funds and Seed Fund schemes have helped strengthen venture capital capacity and support startups across diverse sectors.
The initiative has also encouraged innovation in emerging areas such as artificial intelligence, fintech, renewable energy, and healthcare technology. By providing financial support and policy backing, the government has enabled startups to scale faster and compete globally.
More information about startup policies and programmes is available on the official Startup India portal, which offers resources, funding opportunities, and support services for entrepreneurs.
India emerging as global startup hub
India has emerged as one of the world’s leading startup ecosystems, driven by strong digital infrastructure, skilled talent, and supportive government policies. The growth of startups has contributed significantly to innovation, economic diversification, and employment generation.
The government’s continued focus on funding support, regulatory simplification, and tax incentives is expected to further accelerate the growth of the startup ecosystem. With increasing investor participation and expanding global opportunities, Indian startups are poised to play a crucial role in shaping the country’s economic future.
The recognition of over 2.07 lakh startups and the creation of millions of jobs underscore the transformative impact of Startup India. The initiative continues to empower entrepreneurs, drive innovation, and strengthen India’s position as a global centre for entrepreneurship and technological advancement.
