From Policy to Powerhouse: How Startup India Is Driving Jobs and Deep-Tech Growth

India’s start-up story has never really been about overnight success. It has been about slow, deliberate building—of ideas, of institutions, and of confidence. And nearly a decade after it was launched, the Government of India’s Start-up India initiative is increasingly emerging as one of the strongest pillars supporting that journey.

That message came through clearly in Parliament, where the government laid out how Start-up India has evolved from a policy push into a nationwide engine for innovation, employment, and deep-tech growth.

Launched on 16 January 2016, the initiative was designed to create an enabling ecosystem—one that nurtures innovation, supports young companies, and attracts long-term investment. Over the years, recognition under the programme has been granted by the Department for Promotion of Industry and Internal Trade (DPIIT), ensuring that start-ups meeting defined eligibility norms receive access to policy benefits, funding support, and institutional backing.

In a written reply to Parliament, Minister of State for Commerce and Industry Jitin Prasada highlighted the scale the ecosystem has reached. As of 31 December 2025, India has officially recognised 2,07,135 start-ups under the Start-up India framework. Together, these ventures have reported the creation of over 21.9 lakh direct jobs, underlining the role of start-ups not just as innovation hubs, but as serious contributors to employment generation.

Deep tech steps into the spotlight

What stands out in the government’s data is the growing weight of high-technology and strategic sectors. More than 14,400 recognised start-ups today operate in areas such as aeronautics, aerospace and defence (including space technology), artificial intelligence, and technology hardware such as semiconductors. These deep-tech ventures alone have generated over 1.25 lakh direct jobs, reflecting a shift from consumer-led start-ups to those building foundational technologies.

This transition has been backed by a layered funding architecture designed to support companies at different stages of growth.

One of the cornerstones of this architecture is the Fund of Funds for Start-ups (FFS), which is operationalised by Small Industries Development Bank of India. Rather than investing directly, the FFS channels capital into SEBI-registered Alternative Investment Funds, which then invest in start-ups. In cutting-edge sectors such as AI, robotics, and space technology, AIFs supported under this scheme have invested around Rs. 916.49 crore in 48 start-ups as of the end of 2025.

At the earliest stage of the journey, the Start-up India Seed Fund Scheme (SISFS) has played a crucial role. Implemented from 1 April 2021, the scheme provides funding through incubators to help start-ups validate ideas, build prototypes, and take their first steps towards market entry. In sectors including aerospace, defence, artificial intelligence, and semiconductor-linked hardware, incubators have approved about Rs. 73.4 crore for 406 start-ups.

Access to debt has also been eased through the Credit Guarantee Scheme for Start-ups (CGSS), which became operational in April 2023 and is implemented by the National Credit Guarantee Trustee Company. In the aerospace and defence segment alone, 14 loans worth approximately Rs. 68.30 crore have already been guaranteed, helping start-ups raise capital without being weighed down by collateral constraints.

A whole-of-government push for deep tech

Beyond funding, the government has adopted what it describes as a “whole-of-government” approach to building deep-tech capabilities. The focus areas are strategic and future-facing—semiconductors, artificial intelligence, batteries, defence, space, and quantum computing—sectors that are critical not just for economic growth, but for national resilience.

Under the National Quantum Mission, led by the Department of Science and Technology, four thematic hubs have been set up at premier institutions including the Indian Institute of Science and the Indian Institutes of Technology in Madras, Bombay, and Delhi. These hubs are now fully operational, driving research, building skilled talent, fostering industry partnerships, and supporting start-ups with access to advanced infrastructure, funding, and mentorship. The broader aim is clear: reduce India’s dependence on foreign technology supply chains.

A similar ambition underpins the IndiaAI Mission of the Ministry of Electronics and Information Technology. The programme is working to strengthen India’s AI leadership by expanding compute capacity, enabling indigenous foundation models, unlocking high-quality datasets, supporting AI solutions for India-specific challenges, and financing AI start-ups—all while promoting safe and trusted AI systems.

In semiconductors, the Design Linked Incentive (DLI) Scheme under the Semi-Con India Programme is helping domestic companies, start-ups, and MSMEs move up the value chain. Fiscal support has been approved for 24 chip design projects, while over 100 start-ups and MSMEs have gained access to advanced design tools. These efforts have already led to multiple tape-outs, chip fabrication on advanced nodes, patent filings, and the creation of reusable intellectual property cores.

Defence and aerospace innovation is also seeing fresh momentum. Initiatives from the Defence Research and Development Organisation and the Ministry of Defence—such as the Technology Development Fund, Dare to Dream Innovation Contest, and platforms like iDEX and ADITI—are drawing start-ups and MSMEs into defence R&D and indigenisation programmes.

From research to manufacturing

The ecosystem push does not stop at innovation alone. The Anusandhan National Research Foundation has launched mission-mode programmes focused on high-impact, solution-oriented research. In the space sector, the Department of Space, through Indian National Space Promotion and Authorization Center, has rolled out schemes spanning pre-incubation support, seed funding, technology adoption funds, and even a Rs. 1,000 crore venture capital fund.

Meanwhile, manufacturing capabilities are being strengthened through initiatives such as the Production Linked Incentive Scheme for Advanced Chemistry Cell Battery Storage, which carries an outlay of Rs. 18,100 crore to build a globally competitive domestic battery ecosystem.

Building the ecosystem, end to end

The government maintains that Start-up India is not just about funding or recognition. Policy, regulatory, and fiscal measures continue to focus on easing compliance, improving access to capital and markets, and encouraging collaboration across stakeholders. Programmes like States’ Start-up Ranking, National Start-up Awards, Innovation Week, and large ecosystem platforms such as Start-up Mahakumbh are helping spotlight innovation across regions and sectors.

Taken together, the numbers and initiatives paint a clear picture: India’s start-up ecosystem is maturing. It is creating jobs at scale, moving deeper into strategic technologies, and steadily positioning itself as a driver of innovation-led economic growth. Nearly ten years on, Start-up India is no longer just a flagship programme—it is becoming a foundation for India’s next phase of growth.