How Tier 2 and 3 Towns Are Powering India's 200% Growth Revolution
Prime Minister Narendra Modi on Sunday celebrated the exponential growth of India’s startup ecosystem during his 118th Mann Ki Baat address. He spotlighted an over 200% surge in startup registrations in Nagaland last year, attributing this growth to sectors like waste management, biotechnology, and logistics.
"In Nagaland, startup registrations increased by more than 200% last year. Waste management, non-renewable energy, biotechnology, and logistics are the leading sectors," PM Modi said.
Exponential Growth of Startups
India’s startup ecosystem has seen exponential growth, with DPIIT-recognized startups rising from 500 in 2016 to 1,59,157 by January 15, 2025. Marking nine years of the Startup India initiative, PM Modi highlighted how entrepreneurship is now thriving in Tier 2 and Tier 3 cities. Over half of these startups have emerged from smaller towns, showcasing the nation’s growing innovation potential.
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"This is a moment of pride for every Indian," he remarked. "Small towns are becoming startup hubs, showcasing talent and innovation at the grassroots level."
Women Entrepreneurs and Employment Impact
PM Modi expressed joy at the rising inclusivity in India’s startup revolution. Over 73,151 startups feature at least one woman director, reflecting increased diversity in the ecosystem.
"Startup India has fueled the dreams of many young minds. It’s inspiring to see women take charge, leading startups across the country," he added.
The employment impact of this growth has been significant, with 16.6 lakh direct jobs created between 2016 and October 31, 2024.
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Financial Growth and Sectoral Investments
The financial growth of India’s startup ecosystem has been remarkable, attracting $131 billion in funding since 2016. Annual funding has consistently surpassed $10 billion, barring the pandemic year. Notable recent funding milestones include $157 million raised across 27 deals in the third week of January 2025, signaling renewed investor confidence.
Sectoral investments are robust, focusing on areas like D2C, EV, space, fintech, and SaaS. Noteworthy funding rounds include Netradyne’s $90 million, Ecozen’s $23 million, and Foxtale’s $30 million.
StartUp India has given wings to the aspirations of so many youngsters. The good news is - small towns are increasingly becoming StartUp Centres. Equally gladdening is to see women take the lead in so many StartUps. #MannKiBaat pic.twitter.com/2FI7TZ6LUK
— Narendra Modi (@narendramodi) January 19, 2025
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Transformative Initiatives and Reforms
Launched in 2016 under PM Modi, the Startup India initiative introduced key programs like the ₹10,000 crore Fund of Funds, Atal Innovation Mission, and National Startup Awards. Recent reforms, such as the abolition of the angel tax, eased reverse flipping norms, and the 2024 Bharat Startup Knowledge Access Registry, have further bolstered the ecosystem.
India’s Space-Tech Breakthrough
PM Modi also celebrated Bengaluru-based startup Pixxel for launching India’s first private satellite constellation, Firefly, known for its world-class hyperspectral resolution.
"This is a proud moment for India. Our scientists recently achieved another milestone by successfully executing satellite space docking," he shared.
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A Global Startup Hub
The Prime Minister’s address underscored the vitality of India’s entrepreneurial ecosystem, its growing inclusivity, and its expanding impact across sectors. With a strong foundation and transformative innovations, India is positioned to become a global startup hub in the next decade.