Indian startup funding lagged behind due to decrease, only 22,000 funds from 1,65,000 registered Startup got funds
Veteran industrialist And Erin Capital Chairman Mohandas Pai says that Indian startups are lagging behind due to decrease in funding. He called for policy reforms and investment in R&D to strengthen ecosystem. Pai warned that India is the third largest startup center in the world, yet if these challenges are not resolved, the country may lag behind in global innovation. Pai said that we have 1,65,000 registered startups, 22,000 have got funding. He has made a price of $ 600 billion. We found 121 unicorn and perhaps 250–300 sunnucorn.
The biggest problem lacks adequate capital
He said that the biggest problem for startups is the lack of adequate capital. For example, China invested $ 835 billion in startups and enterprises between 2014 and 2024, the US invested $ 2.32 million. We invested only $ 160 billion, of which 80 percent came from abroad. Therefore local capital is not coming. Pai reported that unlike the US, where insurance companies and university funds are major sources of startup funds, Indian funds are banned from investing in startups by government policy, and insurance companies are largely absent due to incomplete regulatory reforms. He advocated for the insurance companies to bring approval changes to allow them to participate in ‘fund-of-funds’ and called for more flexibility in their investment structure.
Suggestion to increase ‘Fund-of-Fund’ program
Pai also suggested the government’s ‘Fund-of-Fund’ program from Rs 10,000 crore to Rs 50,000 crore. He further stated that India’s pension funds with a fund of Rs 40-45 lakh crore are unable to invest in startups due to conservative approach and restrictive rules. Pai emphasized the importance of adequate increase in research and development funds in Indian universities and encouraged organizations such as DRDO to make their technologies accessible to the private sector.
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