What makes India a magnet for start-ups and unicorns

The 2022 Global Entrepreneurship Monitor report, for instance, rates India among the top-five easiest places to start a business

India magnet for startups and unicorns

Iconic monuments, a heritage trade route that once fuelled the world’s economic corridors, and a country that gave the world jugaad – the most important lesson on entrepreneurship. That perhaps may not be the perfect summary to introduce India, the world’s seventh biggest country by geography and the second largest one by population. India has been fascinating geography since time immemorial. The country was on the bucket list of Vasco-de-Gama, the Portuguese seafarer who took a 132-day arduous sea journey. Unlike de-Gama, the country attracts scores of VCs, entrepreneurs and start-ups thanks to a flourishing economic boom and access to several resources.

The India start-up story is compelling in terms of economic viability as well as people aspirations. On the economic front, India has a well-balanced economic outlook and performance. The country has managed to stay afloat on the top indices of the world’s fastest-growing economies and is on course to pip several developed economies by 2030. A stable government, access to capital and unparalleled ease in doing business makes it a destination of choice for many businesses. The 2022 Global Entrepreneurship Monitor report, for instance, rates India among the top-five easiest places to start a business. As many as 82 per cent respondents believe it was far too easy to start a business thanks to favourable policies, access to finance, taxes, and bureaucracy.

The world’s second-largest country by population also provides access to affordable yet quality labour. The land of legendary scientists like Aryabhata and CV Raman has produced quality engineers and CEOs. In fact, India produces a fourth of the world’s engineers and has a rich BPO/IteS industry which at its peak accounted for 60 per cent of the world’s offshoring markets.

India startup ecosystem

India also has been the country of birth for a large chunk of Fortune500 top management. Besides, the country is also the birthplace of the keyword jugaad which connotes a flexible approach in solving complex business problems.

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With 105 start-ups valued over US$ 1 billion each, India ranks third in the world when it comes to number of unicorns. The country has witnessed an unprecedented pace in adding unicorns – 100 between 2019-21. And, the number is likely to double to 250 unicorns according to a report by investment fund Iron Pillar.

A motivating factor for start-ups is government schemes such as Pradhan Mantri Mudra Yojana (PMJY), credit guarantee trust fund for micro and small enterprises (CGTSME), credit linked capital subsidy for technology upgradation (CLCSS). Besides, programms such as Make in India, Atmanirbhar Bharat, alongside the potential in sectors such as manufacturing, retail, FMCG, foreign trade, and new technologies should be seen as encouraging the VCs. For start-ups, an Indian sojourn is a smooth experience – one full of promise and potential.

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