Can Chandigarh Rise as India’s Next Big Startup Hub?

Chandigarh, a city brimming with talent and potential, has long been overlooked in India's startup ecosystem. Despite its vibrant youth, access to capital, and a strong academic foundation, it hasn't cracked the top 10 startup cities. This can be attributed to its unique status as a Union Territory, overshadowed by neighboring states like Punjab and Haryana, which boast established industrial hubs and robust startup policies.

However, a new dawn is on the horizon. After a two-year wait, the much-anticipated Chandigarh Startup Policy, approved by the UT Administrator in October, is set to transform the city's entrepreneurial landscape. Expected to be officially launched in early 2025, this comprehensive framework aims to nurture innovation, attract investment, and empower aspiring entrepreneurs.

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Can Chandigarh Become India’s Next Startup Hub?

According to Paviter Singh, Director-GM of DIC, UT, Chandigarh, “The updated Chandigarh Startup Policy, after incorporating all the suggestions, will be sent to the governor for secondary approval by December 31, 2024. Once approved, it will be notified and implemented in the new year.”

In October, senior officials and the governor recommended changes to enhance the policy’s implementation and impact on the startup ecosystem. Sources within the UT office suggest that the updated policy will take effect by the end of January 2025, with full rollout anticipated before March 31, 2025.

With this policy, Chandigarh aspires to position itself as a vibrant hub for innovation and knowledge-sharing. The overarching objective is to foster entrepreneurship, attract investments, and support sustainable growth by turning the aspirations of the city’s youth into successful ventures.

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Objectives of the Chandigarh Startup Policy

• Establish Chandigarh as a premier destination for high-value startups.
• Attract top entrepreneurial talent to create a dynamic startup ecosystem.
• Promote collaboration among educational institutions, government bodies, and corporate entities.
• Enhance global visibility of Chandigarh as a startup destination.
• Inculcate a culture of innovation among students, particularly in science and technology.
• Simplify regulatory processes to minimize compliance burdens for startups.

Chandigarh Startup Policy:Key Definitions 

• Startup: Recognized under the Central Government’s Startup India initiative and incorporated in Chandigarh.
• Accelerator and Incubator: Entities providing mentorship, resources, and networking opportunities for startup growth.
• Co-working Space: Shared office facilities with essential infrastructure.
• Eligible Entity: Private limited companies, registered partnerships, or LLPs complying with relevant legal frameworks.

Fiscal Support

• Seed Fund Scheme: Initial corpus of INR 10 crore, growing to INR 50 crore over five years, for incubation and early-stage financing.
• Fund of Funds: Managed by SIDBI with a corpus of INR 10,000 crore, partnering with SEBI-registered venture funds to double investments in startups.

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Ecosystem Mobilization Initiatives

• Incubation Support: Collaborations with higher education institutions to establish and upgrade state-of-the-art incubators.
• Co-working Spaces: Subsidized or free spaces for DPIIT-registered startups for up to three years.
• Workshops and Pitch Sessions: Regular sessions in partnership with incubators and investors to foster entrepreneurial growth.
• Exchange Programs: Financial assistance for startups to participate in national and international events.
• Legal Support: Subsidized patent filing, fast-track examinations, and intellectual property rebates.

Enhancing Market Access

• Public Procurement Relaxation: Exemptions from turnover and experience requirements for startups meeting quality and capability standards.
• Commercialization Support: Facilitation of research commercialization and support for national and international market linkages.
• Self-Certification: Simplified compliance under labor and environmental laws to reduce operational hurdles.

Mentorship and Academic Support

• Mentorship Network: Free access to domain experts in funding, scaling, legal, and marketing.
• Entrepreneurship Cells: Establishment of innovation-focused cells in colleges.
• Internships and Faculty Exchanges: Initiatives to expose students and educators to entrepreneurial skill-building.

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Non-Fiscal Incentives

• Reimbursements: Coverage for app development, incubation, and patent-related costs.
• Exhibition Participation: Free or subsidized stalls at national startup events.
• Sector-Specific Incentives: Tax exemptions and reimbursements, particularly for startups in priority sectors like bakeries, aligned with ODOP and PMFME initiatives.

Special Focus on Women-Led Startups

• Dedicated Funding: At least 33% of the Chandigarh Seed Fund allocated to women-led startups.
• Inclusivity Programs: Tailored incentives and mentorship for female entrepreneurs.

Policy Governance

• Executive Council: Oversight of operational guidelines, monitoring, and reviews.
• Nodal Agency: A dedicated team within the District Industries Center for implementation and grievance redressal.

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Additional Features

• Faster Exit for Startups: Simplified procedures to wind up operations within 90 days.
• Credit Guarantee Fund: Annual allocation of INR 500 crore to encourage debt funding.
• Tax Exemptions: Capital gains exemptions, tax holidays for startup profits, and relief on investments above FMV.
• Atal Innovation Mission (AIM): Support for greenfield and brownfield incubators.
• Private Sector Partnerships: Encouraging private expertise in government-supported incubators.
• Student Innovation Programs: Promoting a DIY culture through coding and science-focused innovation festivals.

The Chandigarh Startup Policy 2022 is a comprehensive and inclusive roadmap, addressing financial, infrastructural, and mentorship needs. By nurturing innovation and entrepreneurship, the policy seeks to transform Chandigarh into a premier destination for startups, driving sustainable economic growth and making 2025 a promising year for the city’s entrepreneurs.