In the past couple of years, startups and unicorns have become buzzwords in India. The year 2021 proved to be extremely wonderful for many Indian entrepreneurs. The contribution made by the entrepreneurs made India the third-largest ecosystem of the globe only after the U.S and China. For the past few years, the start-up ecosystem of India has been performing well and it is predicted that the growth will still exist in future. One might not help but wonder what is leading to the growth of Indian start-ups? Here are five reasons why India is seeing tremendous start-up growth.
1. Government support
Prime Minister Narendra Modi who came into power in 2014 has focused extremely on the digital transformation of the country and this has worked exceedingly well for the Indian start-ups. Both the central government and the state government have realized the importance of the start-ups in improving the economic growth of the country. The Indian start-ups are proving to be a pool of creating new jobs for the people, improving the unemployment rate in the county. The increased focus on start-ups by the government has also encouraged the students to focus on entrepreneurship by finally shifting their focus from appearing in multiple Sarkari Exam in order to prepare for government jobs and waiting for the tough Sarkari Result. The Government of India has launched initiatives and programs like “Startup India” and “Make In India” to encourage the startup business.
2. Young demography
The demography of India is such that it now belongs to the youth generation and hence, currently the country is enjoying a pool of talent. Every year, millions of students are graduating and contributing to the start-up ecosystem. The knowledge and skill gained by the students have made them confident enough to create their very own ventures. Further, the success of other start-ups has made millions of Indian people believe in the fact that achieving career success in career by working on their own start-up is totally possible.
3. The diverse Indian market
With a population of more than 1.3 billion, the Indian market is quite diverse. The diverse Indian market means that there is the market potential for all the niches. India is currently one of the largest growing economies of the globe and this makes it possible for the country to give plenty of opportunities to the start-ups to grow irrespective of the niche. In addition to that, the purchasing power of the Indian citizens are also increasing and this is giving rise to consumption, especially by the upper-middle and high-income population segments.
4. Technological advancement
The advent of technology has particularly contributed largely to the growth of start-ups. In fact, many tech start-ups are getting funded on a large scale. The use of technology makes it possible to run a business in an efficient but simple manner. Also, India saw increased digital connectivity in the last few years and this has helped in reducing the market barriers for Indian start-ups. With digital innovation, people are now comfortable in making digital payments and shopping online. Financial inclusion due to technological advancement has led to a bloom of fintech start-ups especially.
5. Availability of multiple funding opportunities
Before the start-up boom in the country, the entrepreneurs focused mostly on traditional methods to raise funds for their start-ups but now things have drastically changed. At the current time, there are numerous funding options available. An entrepreneur can approach seed funding, angel investors and venture capitalists for raising funds for the start-ups. The availability of raising funds in multiple ways has made it possible to run their start-ups in an easy manner.
In addition to that, a perception change towards entrepreneurship is seen in India. Previously, only government jobs were considered good but now, it is no longer the case. The youth of India is driven by passion and risk-taking ability and also, there is a strong desire in the youth to make a difference in society. As a result, the youth is increasingly tilting towards entrepreneurship. The media is also covering the success stories of the start-ups at an unprecedented scale and this is contributing to improving the belief system of the youth that even they can start their own venture to be successful.