Q.What is Startup India?

Startup India is the Central Government's umbrella initiative, launched on 16 January 2016 and administered by the Department for Promotion of Industry and Internal Trade (DPIIT), to build a strong ecosystem for innovation-driven new enterprises in the country.

An eligible enterprise can apply for DPIIT recognition as a 'startup', and recognition is what unlocks the scheme's main benefits. The first is a tax exemption for three consecutive financial years out of the first ten years since incorporation, available under Section 80-IAC of the Income Tax Act, which gives a young company more retained earnings to reinvest during its most cash-constrained years. The second is access to capital through the Fund of Funds for Startups, a corpus that the government operates through SIDBI; rather than investing directly in individual startups, this fund invests in registered venture capital funds, which then invest in startups — an indirect route meant to draw in much larger amounts of private venture capital alongside the government's own contribution. The third benefit is simplified, self-certification-based compliance under specified labour and environment laws, which reduces the time and cost a new company spends on routine regulatory filings in its early years.

Startup India works alongside two other Central Government initiatives that widen the same ecosystem: Make in India (launched 2014), which improves the broader manufacturing and investment climate that startups also operate in, and the Atal Innovation Mission run by NITI Aayog (launched 2016), which builds an innovation pipeline starting from school-level Atal Tinkering Labs through to Atal Incubation Centres that support early-stage startups directly. Together, these efforts aim to make starting and scaling a new enterprise in India less dependent on personal wealth or connections and more dependent on the quality of the idea itself.