The 2024 general elections saw a tough fight between the BJP-led NDA and the Congress-led India Alliance. The BJP-led NDA got 292 seats, while the Congress-led India bloc secured 234 seats. As per the trends, Narendra Modi is all set to be the Prime Minister for the third time.
One sector that both the Congress and BJP have eyed has been start-ups. The previous BJP-led NDA government promised many start-up policies.
One of them is the deep-tech start-up policy. This policy is nearly complete, and the commerce and industry ministry may include it in the full budget announcement, as per PTI.
Last July, a draft of the National Deep Tech Startup Policy (NDTSP) was released for stakeholder feedback. This policy aims to address the challenges faced by deep-tech start-ups through targeted interventions, fostering a supportive ecosystem. “With the NDTSP expected to be a key focus of the government's 100-day agenda after the elections, start-ups are looking forward to its finalization, recognizing its potential to stimulate innovation and provide crucial support for deep tech start-ups,” said Rohit Garg, co-founder and CEO of Olyv (formerly SmartCoin).
Read: Deep Tech Start-Up Policy Likely in Forthcoming Budget
The policy's emphasis on defining and assisting deep tech start-ups, coupled with initiatives to increase research and development spending, holds promise for start-ups operating in this domain, added Garg. Speaking about the importance of the policy, Swati Bhargava, Co-Founder, CashKaro & EarnKaro, said, “For digital businesses like ours, which rely on cutting-edge technology and robust digital infrastructure, these initiatives can pave the way for more advanced and scalable solutions.”
The Startup India Scheme was launched in January 2016. Through the Startup India initiative, qualifying companies can gain recognition as start-ups by the DPIIT, allowing them to access various tax benefits, simplified compliance, expedited IPR processes, and more. The government also launched the second phase of the Startup India programme in January this year, with deep tech as its focus. Artificial intelligence, cybersecurity, deep-tech, and quantum computing are the areas where these start-ups would work.
“The Startup India initiative by the current government has spurred the growth of the Indian start-up ecosystem, taking up the count of start-ups in the country from 340+ in 2016 to 1,15,000+ start-ups in 2023,” said Nirav Choksi, CEO and co-founder of CredAble. Talking about policies such as the Fund of Funds Scheme and Credit Guarantee Scheme for start-ups in the past, Choksi added that they are hopeful that the new government will provide supportive measures to widen the fundraising avenues for the start-up ecosystem.
The production-linked incentive (PLI) scheme is something that start-ups are eyeing keenly. Announced in 2021, the scheme covers fourteen sectors that include telecommunication, high-efficiency solar PV modules, advanced chemistry cell batteries, drones, and pharma. The aim of the scheme is to focus on cutting-edge technology and attract investment in the respective sector.
Speaking about the PLI scheme, Garg said, “Start-ups are keenly interested in the fate of the PLI scheme. Despite not being included in the immediate 100-day agenda, start-ups anticipate a broader five-year roadmap that encompasses measures to evaluate and enhance the PLI scheme.”
Artificial intelligence and the road ahead
With artificial intelligence being an integral part of our everyday lives, start-ups are no exception. In March 2024, the Union Cabinet approved the IndiaAI Mission for the next five years with an allocation of over Rs 10,300 crore.
The funding would help strengthen the IndiaAI Startup Financing mechanism, easing access to funds for AI start-ups and supporting their journey from development to commercialization. It also includes funding for industry-led AI projects to foster social impact, innovation, and entrepreneurship.
With several policies already in place, what other policies does the start-up sector want from the upcoming government? Start-ups expect government initiatives to address a wide range of challenges and opportunities faced by start-ups across different sectors, such as textiles and steel, said Garge.
Choksi highlighted that they are expecting a significant push for the digitization of trade finance, along with start-up subsidies, tax incentives, and infrastructural improvements, to enhance the global competitiveness of Indian start-ups.
