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The Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Amardeep Singh Bhatia said removing the ‘angel tax’ has strengthened India’s startup ecosystem at a press conference at the ninth anniversary of Startup India.
In the July 2024 union budget, Finance Minister Nirmala Sitharaman announced the removal of angel tax, which was introduced in 2012. Angel tax is the tax on capital raised beyond the fair market value.
He also shared that DPIIT is working to boost collaboration between top corporates and startups by creating manufacturing incubators with support from listed companies and launching grant-based challenges.
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Since the launch of the Startup India initiative in 2016, India’s startup ecosystem has grown rapidly, increasing from around 400 startups to over 158,000, according to DPIIT.
Startup funding has surged to $155 billion by 2024, up from just $8 billion in 2016. Additionally, 48% of startups now come from Tier II and III cities, noted DPIIT Joint Secretary Sanjiv Singh.
"We expect more products to come up from startups in the next five years. We have a large number of service providers, but products are something we're looking forward to. Especially, in the manufacturing space, we want to see more, " DPIIT Secretary Amardeep Singh Bhatia said at a press conference at the ninth anniversary of Startup India.
India's unicorns have grown from 8 in 2016 to 118 in 2024, creating over 1.7 million jobs, he added.
The department has contacted India’s top 100 listed companies to help set up incubators for manufacturing startups. It also plans to launch 75 corporate grant challenges to support startups with prototypes and pilot orders, as small startups often struggle to get initial orders.
He also said that many countries like Saudi Arabia, UAE, Qatar, Switzerland, and Japan are interested in working with Indian startups. They may invest in these startups through their sovereign wealth funds.
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