In just over a decade, India has built the world’s third-largest startup ecosystem. Super-charged by the nation’s world-class software services and consulting sector, as well as its pioneering Digital Public Infrastructure (DPI), the ecosystem is evolving into one of India’s top growth engines and innovation frontiers. With more than 190,000 Department for Promotion of Industry and Internal Trade (DPIIT)-recognised startups, supported by nearly 10,000 investors, and having produced over 120 unicorns, India’s startup landscape has built significant momentum. These ventures have collectively raised over US$164 billion (~INR14 lakh crore at INR85 to a dollar) since 2014, driving growth across a diverse range of sectors, including fintech, consumer and e-commerce, SaaS, logistics, mobility, and increasingly in deep tech and artificial intelligence (AI). Yet, the foundation of this success rests heavily on foreign capital, which constitutes approximately 83 percent of the total startup funding. Although overseas capital has undoubtedly catalysed the rise of India’s startup ecosystem, the nation’s technological and innovation future cannot remain hostage to global liquidity cycles, geopolitical tensions, and offshore decision-making. India must target a structural rebalancing of startup funding in the next decade by mobilising deep pools of indigenous capital, ensuring that the wealth created by Indian entrepreneurs ultimately accrues to Indian citizens and reinforces national techno-sovereignty.
Reclaiming Innovation: Financing India’s Startup Future from Within
