Scaling India’s Startup Ecosystem

Fueling Startups and Innovations from going Local to Global with the help of the Ministry of Commerce and Industry

Over 2.12 lakh startups have been recognised and developed by DPIIT (Department for Promotion of Industry and Internal Trade), becoming one of the world’s largest startup ecosystems. However, there are only 5 multilateral engagements and 850+ startups which are scaling to go global. If DPIIT has been able to help grow so many startups locally, have they done enough to be able to help those startups grow globally?

This blog argues that even though entrepreneurs can build Startups with the help of DPIIT, through funding, recognition and policy support, they have been less successful in scaling internationally. Startups alone cannot guarantee greater economic impact, but once the firms enter the larger markets, and attract foreign investors, it can help grow India’s economy. Hence, there should be a shift in focus, to support startups to go global.

Since the launch of Startup India in 2016, the number of DPIIT-recognised startups has crossed 2 lakhs, where in the last year itself, 4000+ startups benefited from central government support programmes out of 55,200 startups recognised. This shows that roughly 7.25% of DPIIT-recognised startups, for the year 2025-26 have benefited. Some of the prominent features were tax exemptions, legal support for patent filing, and industry or academia support (building infrastructure for scaling up). This shows how there is lower cost and assistance in starting a business, allowing the entrepreneurs to focus on innovation over compliance. However, while DPIIT has built a support system for creation within the boundaries of the country, the number of startups successfully going global remains small.

Initiating a startup to go global is often for long-term and sustainable growth, being challenging but also possible. Going from local to global gives startups access to larger customer bases, new revenue streams, and the chance to make a mark on the global stage. DPIIT has then introduced initiatives like Startup India Seed Fund Scheme (SISFS - financial assistance to startups for proof of concept, prototype, development, product trial, market entry and commercialisation), international bridge programmes, and tax incentives to support entrepreneurial growth. SISFS has been allocated Rs. 945 crores for the period 2021-25, aiming to support 3,600 startups through Proof of Concept, prototype development, product trials, market entry, and commercialisation. Still, many firms end up staying local because of limited access to global networks, guidance in foreign markets, and other resources for cross-border expansion. Since there are only a few schemes aiming to provide help to go global, the government investment is hence concentrated on creation and early-stage support.

With over 90% of the startups failing to grow in the local markets themselves, it shows that providing funds is not the only solution. Giving startups mentorship or other resources that will help them grow and is one of the simpler solutions to be successful. The growth of India’s startup ecosystem shows how policy decisions can influence the economic opportunities at the basic level. An example to illustrate this is the story of Paytm and Byju’s. Paytm, founded by Vijay Shekhar Sharma, is not only benefitted from major investment firms like SoftBank and Alibaba, but also from acceleration of digital payments in India. He argues that Indian entrepreneurs must work on domestic technology, rather than allowing India’s digital market to become “another colony of America” (quoted from the BBC website). This story shows how infrastructure, timing, investor confidence, and policy support can help a startup become successful.

Byju’s, despite being one of India’s highest-valued startups, struggled to keep up with the expansion, debt pressure and reduction in trust among customers and investors. Here, we see that capital can help grow a company, but not sustain the consumer trust, business practises, accountability and trust. Hence, DPIIT should help startups focus beyond creation.

Expanding globally attracts foreign investors, generation of high-skilled jobs and strengthening our country’s position in the economy. Over 17 lakh direct jobs have been generated, but this can be drastically increased if Indian startups could successfully enter the international markets and go from local to global. The Swedish music-streaming company Spotify shows how it went from a small startup to over 761 million users. Spotify expanded by strategically adapting to the environment in every country, so that it could become like what it is now. Similarly, India’s startup ecosystem, which is already building on this, should challenge itself to create a supportive system to help local enterprises go global. 

By initiating a Global Startup Scaling Fund, in the ‘Make in India’ scheme and allocating 5% of the scheme’s total (Rs. 3,324.54 crores), which is approximately Rs. 166 crores could help aid startups with mentorship related to foreign businesses, networking, and export grants, applicable for the potential startups. This can also be done by helping startups partner with private companies, which started as startups. This will bridge the gap between startup creation and expansion, increasing the number of startups that complete internationally with government support. It will be feasible, as the allocation is being made from the budget given to the ‘Make in India’ scheme, with no additional costs incurred. 

A startup is something that cannot be forgotten, but through the art of growing those startups, is how you can make the startups count.