Countdown 2047: Will startups find India to be a happy stomping ground where it’s easy to start up, scale up, or even shut shop?

(This story originally appeared in on Aug 15, 2022)

Even as Indian startups witnessed an unprecedented funding frenzy last year, raking in more than $36 billion in venture and private equity deals — four times that in 2015 — Indian domestic capital chasing them continues to be scarce.

The government needs to incentivise the flow of domestic capital to startups through Section 80 G-type incentives, allowing corporates to invest their mandatory corporate social responsibility (CSR) contribution in them. Also needed — specialised funds with co-participation from India Inc to invest in nation-building sectors of energy, infrastructure, healthcare and conservation, which otherwise don’t catch the eye of traditional venture capital investors.

With Indian family offices and angel investors making good exits through successful initial public offerings (IPOs) of Indian startups such as

and , the confidence to invest in India’s startup journey is increasing, as more domestic capital unlocks.

India’s startup industry will continue to attract capital as other major economies such as China look inward with tech crackdowns, and markets like Europe remain fragmented. India will be a one-stop shop for growth and investments.

The last decade of Indian entrepreneurship has resulted in over 100 unicorns with $100 billion being invested and more $300 billion in value creation by these startups. India’s startup ecosystem will be a market of more than 500 unicorns by 2030, by one estimate.

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In 2021, India surpassed China in terms of minting new unicorns for the first time. It was third place in terms of active, privately held unicorns, according to Bain & Co. However, more venture capital funding poured into China — 2.7 times that into India. Still, Indian startups are set to account for a big chunk of domestic stock indices by 2030. Likewise, as India aspires to the $5 trillion and $10 trillion GDP landmarks, the country’s technology sector could contribute as much as a third.

There will be a resurgence of the Indian startup ecosystem, which is expected to focus on building for global opportunities, not just solve domestic challenges. With Indian software startups already taking global peers head on, Indian fintech solutions are next in line to be major exporters. This can be seen through Indian-centric innovations such as the Unified Payments Interface (UPI) and RuPay gaining acceptance in markets such as Singapore and the UAE.