When Startups Fall Silent: What 41 Shutdowns in Jammu & Kashmir Reveal About India’s Uneven Startup Journey

For nearly a decade now, India’s startup story has been told in the language of scale—unicorn counts, funding rounds, IPO bell-rings, and global ambition. But away from the spotlight of Bengaluru, Mumbai and Delhi, a quieter, more fragile version of this story has been unfolding. One that speaks not just of innovation and opportunity, but also of survival, constraints, and closures.

Official data presented in the Lok Sabha this week offers a sobering glimpse into that reality. Since 2015, at least 41 startups recognised under the Startup India initiative have shut down in Jammu and Kashmir, according to figures shared by the Ministry of Commerce and Industry. While the number may appear small in a national context, it raises important questions about how India’s startup ecosystem is evolving beyond its major urban hubs—and what happens when young ventures fail in regions already grappling with economic uncertainty.

Jammu & Kashmir Startups: A Small Number, A Larger Context

Nationally, India’s startup ecosystem has expanded at a breakneck pace. As of October 31, 2025, the Department for Promotion of Industry and Internal Trade (DPIIT) has recognised 1,97,692 startups under the Startup India programme. Out of these, 6,385 startups have been categorised as closed, meaning they were either dissolved or struck off from official records, based on data from the Ministry of Corporate Affairs.

In that national pool, Jammu and Kashmir’s 41 closures account for a very small fraction. Yet the data is revealing not because of the absolute number, but because of what it represents: the vulnerabilities of emerging startup ecosystems operating far from deep capital pools, large consumer markets and mature support networks.

Among states and Union Territories, Maharashtra reported the highest number of startup closures at 1,200, followed by Karnataka (845), Delhi (737) and Uttar Pradesh (598). These are also the regions that host the largest number of startups overall, suggesting that higher shutdowns may partly mirror ecosystem size rather than systemic failure.

By contrast, Jammu and Kashmir’s figures align with those of smaller or hill states such as Himachal Pradesh and Sikkim, where startup activity itself remains limited in scale.

Why Startups Shut Down

Responding to questions in Parliament, the Centre attributed startup closures across the country to a mix of structural and market-driven challenges. These include:

• Weak or unviable business models

• Poor alignment with market demand

• Funding constraints

• Domestic and global economic pressures

These reasons may sound familiar to any founder, but in regions like Jammu and Kashmir, such challenges are often amplified. Entrepreneurs in the Union Territory frequently point to limited access to venture capital, smaller addressable markets, logistical bottlenecks, and regulatory uncertainty as persistent roadblocks to scaling their businesses.

Even promising ideas, founders say, struggle to sustain momentum when capital is scarce and customer acquisition is slow.

The Missing Jobs Question

Perhaps the most striking admission in the government’s response is not the number of closures—but what isn’t being tracked.

The Centre acknowledged that data on job losses resulting from startup shutdowns is not centrally maintained.

This gap matters. Startups, especially in smaller regions, often play an outsized role in local employment, offering alternatives to government jobs or migration-driven livelihoods. Without data on how many jobs are lost when ventures close, it becomes harder to assess the true economic impact of these failures—or design targeted interventions to soften the blow.

The figures also arrive at a time when policymakers have been actively promoting startup culture in Jammu and Kashmir. Over the past few years, the region has seen the rollout of central schemes, incentives, incubation centres and entrepreneurship programs aimed at encouraging local innovation and self-employment.

Yet the closure data suggests that policy intent and on-ground sustainability are not always aligned.

For founders operating in the region, the challenge is not just about starting up—but staying afloat. While incubation support may help early-stage ideas take shape, long-term survival often depends on follow-on funding, market access and operational stability—areas where regional startups continue to lag behind their metro counterparts.

A More Nuanced Startup Story

The shutdown of 41 startups in Jammu and Kashmir does not signal a collapse of entrepreneurial ambition. Instead, it underscores the uneven geography of India’s startup boom. Where ecosystems are deep, closures are absorbed as part of a high-risk, high-reward cycle. Where ecosystems are thin, every shutdown carries heavier economic and social weight.

As India continues to celebrate its startup milestones, this data is a reminder that the next phase of growth will require more than headline numbers. It will demand region-specific strategies, better tracking of outcomes like employment, and sustained support that goes beyond the launch stage.

Because for India’s startup story to be truly inclusive, it must also reckon honestly with where—and why—some dreams quietly come to an end.