STARTUP INDIA

Startup India

What is Startup India?

Startup India is a Flagship Initiative of the Government of India, intended to build a Strong Ecosystem that is conducive for the growth of startup businesses; to drive sustainable economic growth; and generate large scale employment opportunities.

The Government through this initiative aims to empower startups to Grow through innovation and design. Several programs have been undertaken since the launch of the initiative on 16th of January 2016 by Hon’ble Prime Minister Narendra Modi, to contribute to his vision of transforming India into a country of job creators instead of job seekers.

These programs have catalyzed the startup culture, with startups getting recognized through the Startup India initiative and many entrepreneurs availing the benefits of starting their own business in India.

Key Pillars of Support for Startups

Under the Startup India Initiative:

(1) Simplification and Handholding:

Easier compliance, easier exit process for failed startups, legal support, fast-tracking of patent applications and a website to reduce information asymmetry.

(2) Funding & Incentives:

Exemptions on Income Tax and Capital Gains Tax for eligible startups; a fund of funds to infuse more capital into the startup ecosystem and a credit guarantee scheme.

(3) Incubation & Industry-Academia Partnerships:

Creation of numerous incubators and innovation labs, events, competitions, and grants.

What are the Benefits Provided under Startup Scheme?

The benefits provided to recognized startups under the Startup India initiative are:

(1) Self-Certification: 

Self-certify and comply under 3 Environmental & 6 Labour Laws.

(2) Tax Exemption: 

Income Tax exemption for a period of 3 consecutive years and exemption on capital and investments above Fair Market Value.

(3) Easy Winding of Company: 

In 90 days under Insolvency & Bankruptcy Code, 2016.

(4) Startup Patent Application & IPR Protection: 

Fast track patent application with up to 80% rebate in filling patents.

(5) Easier Public Procurement Norms: 

Exemption from requirement of earnest money deposit, prior turnover, and experience requirements in government tenders.

(6) SIDBI Fund of Funds: 

Funds for investment into startups through Alternate Investment Funds.

Further, the Startup India portal www.startupindia.gov.in is a one-stop platform for all stakeholders in the startup ecosystem to interact amongst each other, exchange knowledge and form successful partnerships in a highly dynamic environment.

What qualifies as a "Startup" under the Startup India Scheme

An entity shall be considered as a Startup:

(1) If it is incorporated as a Private Limited Company or registered as a Partnership Firm or a Limited Liability Partnership in India.

(2) Up to Seven Years from the date of its incorporation/registration; however, in the case of startups in the biotechnology sector, the period shall be up to ten years from the date of its incorporation/registration.

(3) If its Turnover for any of the financial years since incorporation/registration has not exceeded INR 25 Crores.

(4) If it is working towards Innovation, Development or Improvement of Products or Processes or Services, or a Scalable Business Model with a high potential of employment generation or wealth creation.

Note: An entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘Startup’.

How Can I register a profile on the Startup India 

(Website- www.startupindia.gov.in)

Registering a profile on the Startup India website is a fairly simple process:

(1) Simply click on 'Register' and fill in the details as required in the registration form. An OTP will be sent to your registered email address, post submitting which your profile will get created.

(2) You will have an option to select your profile type. For 'Individuals', the profile goes live immediately, whereas for 'Startups', the profile goes under moderation for 24-48 Hrs, post which you will be able to avail all benefits on www.startupindia.gov.in.

What is an Enabler?

Anyone whose activities promote the growth of startups is an enabler of the startup ecosystem. This includes stakeholders such as:

(1) Investors

This can include Angel Investors, as well as Venture Capital Funds and other institutional investors.

(2) Mentors

These can be any experienced persons who wish to impart their knowledge to startups and guide them for success.

(3) Incubators

Organisations that provide entrepreneurs & early-stage startups with advice, resources and connections so as to help them turn their idea into a self-sustaining business.

(4) Accelerators

Organisations that help catalyse the growth of existing startups, sometimes to get them ready for an IPO.

(5) Government Bodies

These can be any government organisations that procure goods or services from startups or wish to host a challenge on the Portal.

Startup State Rankings

The result of first ever startup state ranking were announced in December 2018 by the Department of Industry and Internal Trade based on the criteria of policy, incubation hubs, seeding innovation, scaling innovation, regulatory change, procurement, communication, North-Eastern states, and hill states.

2018 Startup State Ranking are as follows:

Best Performer: Gujarat

Top Performers: Karnataka, Kerala, Odisha, and Rajasthan

Leader: Andhra Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, and Telangana

Aspiring Leaders: Haryana, Himachal Pradesh, Jharkhand, Uttar Pradesh, and West Bengal

Emerging States: Assam, Delhi, Goa, Jammu & Kashmir, Maharashtra, Punjab, Tamil Nadu, and Uttarakhand

Beginners: Chandigarh, Manipur, Mizoram, Nagaland, Puducherry, Sikkim, and Tripura.

Sources: www.startupindia.gov.in