India, at present, is home to more than 4200 start-ups and lags only marginally behind the UK. The rapid expansion that the country’s entrepreneurial landscape has witnessed has caused industry experts to estimate that more than 11500 Indian start-ups will be operational by the end of the decade. As the industry goes through a phase of consolidation, we can expect more robust business models and stronger support infrastructure to fuel start-up growth in 2016.
Amongst other changes that will impact the Indian start-up community, the emergence of more start-up hubs within the country seems to be one of the most promising. While Bangalore, Delhi-NCR, Mumbai and Chennai remain the chief entrepreneurial hotspots within India, other cities such as Hyderabad, Coimbatore, Bhubaneswar, Ahmedabad, Pune and Kochi are also staking their claims as viable start-up destinations.
It’s clear that these new-age startups are currently making impressions in India. And many hope the sector will continue to thrive, given the country’s relatively inexpensive labor and the size of the potential market in the world’s second-most populous country.
Challenges faced by entrepreneurs:
• Bulk of market is discount driven
• Lack of guidance with respect to funding
• Non friendly Govt Policies
• Lack of mentorship & start-up training
• Lack of collaboration among start up communities
Current scenario & initiatives for Indian start-ups:
1. Fast tracking of registration process: India’s ecosystem for new businesses is laced with red tape with an age old registration process which is one of the major hurdles aspiring business owners face. Proof of this is the fact that India ranks 130thout of 189 countries in the ease of doing business index. Now with the launch of Startup India, Standup India soon the registration process will be simplified to just one form, which can be filled out from the mobile app! Nevertheless as per the latest guideline, while registration the firm should give an estimate of the no of employment creation.
2. Easy exit strategy: All entrepreneurs know that starting your own venture is always a risky proposition no matter what. Now the government allows an unfortunate startup to complete formalities for exit within 90 days! So that entrepreneurs can move on to bigger and better things!
3. Tax exemptions for startup: For an initial period of three years, the government is waiving taxes for startups, which will help startups flourish!
4. Setting up of 7 new research parks: The government has announced the setting up of 7 research parks modeled on an existing research park in IIT Madras. The IITs are renowned for having world class facilities and producing talents of the highest order. So the setting up of 7 new research parks can mean nothing but good things for the Startup Landscape of India.
5. 80% Reduction in fees for the registration of Patents: One of the key milestones of this program, according to the PM, is not only to increase the number of startups, but to actually foster innovation at the grassroots level. Every corner of the country should be encouraged to produce startups, and the right environment should be provided to them so that they realize their potential.
6. Spotlight on the next generation for producing entrepreneurs of tomorrow!: The government is pulling out all the stops, and is taking it to the next level by involving the future generations of our nation by trying to instill entrepreneurship in their minds at an early stage. And it plans to go about the said initiative by holding annual competitions amongst schools and to promote unique thinking at a very early stage!
To conclude, let’s have a look at what all have worked for Indian entrepreneurs: acqui-Hiring, technology acquisition, market consolidation, and customer acquisition. With increase of momentum in M&A in India, investors are getting more exit opportunities.. Startups are adopting innovative approaches to attract and retain top talent. However Indian startups are often alleged to be copying foreign startups. Often they don’t have a proper scaling plan. There is a need for directional efforts to help increase supportive government policies (ease of doing business, tax incentives, participation in Government contracts, availability of risk capital, etc.)