NEW DELHI: Indian Prime Minister Narendra Modi said on Sunday that the rapid growth of startups across the country reflected the spirit of the “new India,” but some industry players still struggle for viability amid what they say is a lack of institutional support.
India is the third-largest startup ecosystem in the world, just behind the US and China. The South Asian country saw its 100th startup achieve the unicorn, or the $1 billion, status in early May, with Indian unicorns now valued at more than $330 billion, according to the Ministry of Commerce and Industry.
The Indian government established Startup India in 2016, an initiative aimed at empowering local startups by developing a stronger ecosystem for their growth. There are more than 65,000 Indian startups to date, according to official data.
“Our unicorns are diversifying and the world of startups is reflecting the spirit of new India, with entrepreneurs also coming from small cities and towns,” Modi said during his monthly radio talk.
“This shows that in India, the one who has an innovative idea, can create wealth. I am confident that in the coming future we will witness startups reaching new heights in India.”
Yet profitability remains a feat for many startups in the country. Only 18 of India’s 100 unicorns have attained profitability in the 2021 financial year, with more than half reportedly experiencing deep losses, according to data tracking by media platform Entrackr.
Delhi-based Pravash Pradhan, a managing partner of communication startup P2C Communications, is among those struggling for adequate support despite the apparent boom in India’s tech startups.
“Startup India is a good initiative and the government has developed an ecosystem, but the initiative is hyped,” Pradhan, who has been running his venture for four years, told Arab News.
“It’s advertised a lot but the kind of institutional support needed, the kind of ground support needed for new players is missing.”
Dr. Ramesh Chandra Biswal, who left his space scientist job in the US to start an agriculture startup called Villa Mart in his home village in the eastern Indian state of Odisha, said that it was still challenging to secure enough loans to run his company.
“Startup India is more (about) hype — the reality on the ground is different,” Biswal told Arab News.
Villa Mart runs a mobile market in the rural area, buying farmers’ produce for double the price before selling it to other villagers. Despite the struggle, the startup has created a network of 2,000 farmers across 40 villages in the last five years.
“We are not getting the support from the government and the ‘Startup India’ slogan was useful in the beginning to convince people. I am not getting any benefit as of now,” Biswal said.
“The government should allocate some funds to banks and instruct banks to provide loans, but getting loans from banks is not easy for startups … I hope that things will be better in the future.”