Tamil Nadu, celebrated for its dynamic film industry and Thalaivas, is now rapidly gaining recognition in the startup arena too. With the recent overhaul of its startup policy, the state aims solidifying its position as a thriving hub for innovation and entrepreneurship.
In a significant move to bolster its burgeoning startup ecosystem, Tamil Nadu has unveiled a revamped Startup and Innovation Policy 2023 aiming to become a USD 1 trillion economy by 2030.The move comes at a time when the number of registered startups grew manifold times in the state.
Tamil Nadu Chief Minister M K Stalin introduced the policy equipped with 50 action points. In 2022, Tamil Nadu improved to 11th position in the department for promotion of industry and internal trade (DPIIT) startup rankings report.
What Are The Key Highlights of The Revamped Policy?
According to the policy, the state will contribute 40% (with a ceiling of Rs 10 crore) in regional, rural impact, women and climate action-focused funds and 20% (with a ceiling of Rs 5 crore) in other thematic funds promoted by the private sector. The fund size should be Rs 20 crore and above in case of a new fund.The government will bear 75% and 50% of the fund setup costs, respectively, for the above-mentioned categories.
The state is also creating TANFUND, a startup-investor aggregator platform to connect national and international investment agencies with Tamil Nadu startups, with structured back office facilitation.
Besides the policy also highlights establishing ‘Global Coordination Centres’ in potential countries across the globe to connect resources including funding, mentorship and market access with Tamil Nadu startups.
How Tamil Nadu plans to catalyse growth with 50 Action Points in the revamped Startup Policy?
The decision to upgrade the startup and innovation policy comes in response to a surge in the number of registered startups in Tamil Nadu. As of September 2023, the state boasts over 7,000 registered startups, drawing significant venture capital investments. The policy, applicable from 2023 to 2028, seeks to accelerate and amplify these startups' growth while increasing their contribution to the state's GDP.
How Will the Startup Policy Foster Innovation and Entrepreneurship?
At its core, this policy framework endeavours to create a democratized ecosystem that nurtures innovation and entrepreneurship, positioning Tamil Nadu as a land of boundless opportunities. Chennai and Coimbatore have already earned global recognition as two of the top 400 startup cities worldwide, as per the Blink Startup Ecosystem Report 2022. Chennai also ranks fourth in the Indian Startup Ecosystem Report 2022, while Coimbatore, Madurai, Tiruchirappalli, Salem, and Vellore are emerging hubs.
Tamil Nadu Aims To Be One of The Top 20 Global Startup Destinations By 2032
The policy's visionary objective is to elevate Tamil Nadu to one of the top 20 global startup destinations by 2032, adhering to internationally accepted criteria. Simultaneously, it aims to facilitate the establishment of 15,000 startups across diverse sectors and regions, positioning the state as one of the top three startup ecosystems in India.
StartupTN – Advisory Board To Ensure Successful Execution of Policy
StartupTN, the nodal agency of Tamil Nadu, takes center stage in promoting startup and innovation activities. A dedicated team, led by a mission director, serves as the nodal officer entrusted with implementing the policy's various initiatives.
Additionally, an advisory board comprising leaders from prospective startups, investors, mentors, incubation managers, domain experts, government officials, media representatives, industry forums, and corporate entities is set to be formed to ensure the successful execution of the policy. This board will convene biannually to evaluate policy outcomes and suggest evolving strategies.
Tamil Nadu CM MK Stalin Empowers SC/ST Entrepreneurs
In a laudable move towards inclusivity, Chief Minister M K Stalin sanctioned investments worth Rs 10.85 crore for eight startups founded by entrepreneurs from the scheduled caste and scheduled tribe (SC/ST) communities. These startups, situated in Chennai, Coimbatore, Tiruppur, and Ramanathapuram districts, with two having women co-founders, will receive mentorship and post-investment support from the Tamil Nadu Startup and Innovation Mission (StartupTN).
Enhancing Credibility and Expansion Through Investments
The backing of the government through investments is expected to enhance the credibility of these startups, facilitating their acquisition of new clients and expansion into broader markets. The sectors represented by these budding entrepreneurs range from fast-moving consumer goods (FMCG) to drone technology, Internet of Things (IoT), e-commerce, media, and entertainment.
Tamil Nadu's comprehensive Startup and Innovation Policy 2023 paves the way for the state to become a formidable force on the global startup stage. Moreover, the government's support for SC/ST entrepreneurs underscores the commitment to inclusivity and diversity in the entrepreneurial landscape.
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