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Startup India Scheme: An Overview

November 28, 2023
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The Startup India Scheme, launched by the Government of India, marks a significant stride in nurturing the entrepreneurial spirit of the country.

This initiative is not just a policy; it’s a comprehensive program aimed at fostering innovation and facilitating business growth.

With a focus on simplifying business conduction, offering financial support, and ensuring ease of doing business, the scheme has been a catalyst for the entrepreneurial landscape in India.

This article delves into the intricacies of the Startup India Scheme, offering insights for both budding entrepreneurs and IP experts.

Background and Launch

The Genesis of Startup India

The Indian economy, brimming with potential, has always been a fertile ground for startups. However, prior to the inception of the Startup India Scheme, entrepreneurs faced numerous challenges – from bureaucratic hurdles to lack of financial backing.

Recognizing the need to empower these business ventures, the Government of India conceptualized the Startup India Scheme.

Official Rollout

Launched on January 16, 2016, by the Prime Minister of India, the scheme was a response to the growing need for a startup-friendly ecosystem.

Administered by the Department for Promotion of Industry and Internal Trade (DPIIT), the scheme was hailed as a game-changer, poised to revolutionize the way startups functioned in India.

Initial Expectations

The launch set high expectations among the business community. It promised not just financial support but also a commitment to reduce regulatory burdens, making it easier for startups to innovate and grow. The scheme was seen as a harbinger of a new era for the Indian entrepreneurial scene.

Key Features of the Scheme

The Startup India Scheme is a multifaceted program designed to bolster the startup ecosystem in India. Here’s a breakdown of its key features, elucidating how it serves as a springboard for entrepreneurial ventures.

Eligibility Criteria for Startups

  • Age of the Company: To qualify, a startup must be a new entity or not older than 10 years from the date of its incorporation.
  • Annual Turnover: The company’s turnover must not have exceeded INR 100 crores in any of the financial years since its inception.
  • Innovative and Scalable: The business must work towards innovation, development, or improvement of products or processes and should have the potential for wealth creation and employment.

Types of Support Provided

Financial Assistance

  • Funding Support: The scheme facilitates access to funds through a dedicated fund of INR 10,000 crores, managed by SIDBI (Small Industries Development Bank of India).
  • Tax Exemptions: Eligible startups can avail tax holiday for three consecutive financial years out of their first ten years since incorporation.

Simplifying Business Operations

  • Self-Certification Compliance: Startups are allowed to self-certify compliance with certain labor and environmental laws.
  • Ease of Patent Filing: Provision for fast-tracking patent applications at lower costs and rebates of up to 80% in patent costs. (Learn about regular patent costs in India)

Networking and Mentorship Opportunities

  • Incubator Support: Access to government-recognized incubators, providing mentorship, networking, and support services.
  • Startup Fests: Organization of national and international startup fests, offering platforms for showcasing innovations and networking with potential investors.

Benefits for Startups

The Startup India Scheme, with its comprehensive framework, offers a plethora of benefits that cater to various aspects of a startup’s growth and development. These benefits not only assist in the initial stages of setting up a business but also in scaling and sustaining growth.

Access to Funds

  • Seed Funding Support: Startups often struggle with initial capital requirements. The scheme addresses this by providing seed funding support, crucial for early-stage startups.
  • Venture Funding: Enhanced access to venture capital through the fund of funds helps startups scale their operations.

Tax Benefits

  • Income Tax Exemptions: Qualified startups can enjoy income tax exemptions for three years, which is a significant relief, allowing them to reinvest the savings back into the business.
  • Exemption on Capital Gains: Startups are also eligible for exemptions on capital gains if the proceeds are reinvested in specified funds.

Ease of Doing Business

  • Simplification of Procedures: The scheme simplifies procedures such as company registration, labor laws compliance, and environmental clearances.
  • Reduction in Regulatory Burden: With provisions like self-certification, startups can operate without the pressure of regulatory burdens in their formative years.

Intellectual Property Rights (IPR) Benefits

  • Fast-Track Patent Processing: Startups benefit from a streamlined patent application process, ensuring quicker protection of their intellectual property.
  • Rebate on Intellectual Property Costs: The scheme offers an 80% rebate on patent costs, making it more affordable for startups to protect their innovations. Professional fee is borne by the government and the Startup has to pay the government fees applicable for certain IP services like patents, trademark, etc.

Networking and Market Exposure

  • National and International Events: Startups get opportunities to participate in national and international events, which enhances their market exposure and networking.
  • Collaboration Opportunities: Events and incubator programs under the scheme foster collaboration between startups, investors, and mentors.

Impact on the Indian Economy

The Startup India Scheme has had a noticeable impact on the Indian economy, fostering innovation and creating new job opportunities. This section assesses the scheme’s economic impact and its contribution to India’s position as a global startup hub.

Boost to Entrepreneurship and Innovation

  • Increase in Number of Startups: There has been a significant increase in the number of registered startups in India, indicating a thriving entrepreneurial spirit.
  • Innovation in Various Sectors: The scheme has encouraged innovation across diverse sectors, including technology, healthcare, agriculture, and more, contributing to the overall economic diversification.

Job Creation and Skill Development

  • Employment Opportunities: Startups under this scheme have created numerous job opportunities, contributing to the reduction of unemployment.
  • Skill Enhancement: These startups often focus on skill development, thereby enhancing the employability of the Indian workforce.

Contribution to GDP

  • Economic Growth: The startups supported by the scheme are contributing significantly to the Gross Domestic Product (GDP) of India, indicating the scheme’s role in economic growth.

Regional Development

  • Balanced Regional Growth: The scheme encourages startups in various parts of the country, promoting balanced regional economic development.
  • Rural Entrepreneurship: It also supports rural entrepreneurship, leading to rural economic development and diversification.

Global Recognition

  • India as a Startup Hub: The scheme has positioned India as a global startup hub, attracting international attention and collaboration.
  • Global Rankings: Improvement in global business and innovation rankings is a testament to the scheme’s success.

Challenges to Economic Impact

  • Sustainability of Startups: The long-term sustainability of startups remains a challenge, impacting the long-term economic benefits of the scheme.

How to Apply and Participate

For startups looking to leverage the benefits of the Startup India Scheme, understanding the application process is crucial. This section provides a detailed guide on how to apply and participate in the scheme.

Step-by-Step Application Guide

  1. Registration Process:
    • Start by registering your business as a startup on the official Startup India website.
    • Ensure that your business meets the eligibility criteria outlined in the scheme.
  2. Documentation and Details:
    • Prepare and upload necessary documents, including business plans, incorporation certificates, and details about the nature of the business.
    • Provide information on innovation, scalability, and potential impact.
  3. Compliance and Recognition:
    • Complete self-certification for compliance with environmental and labor laws.
    • Upon successful review, your startup will be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT).

If you need assistance, you can even avail the services of a professional to help you register as a Startup with DPIIT. Please fill the request form for assistance from experts.

Navigating Through the Official Portal

  • Official Website: The Startup India portal serves as the primary platform for all information and applications.
  • Support and Guidance: The portal also offers guidance and support for filling out the application and understanding the scheme’s benefits.

Utilizing Incubators and Startup Centers

  • Connect with Incubators: Many startups benefit from connecting with government-recognized incubators that offer mentorship and resources.
  • Utilize Startup Centers: These centers provide essential resources, networking opportunities, and guidance.

Seeking Legal and Professional Advice

  • Consulting Experts: It is advisable to consult legal and financial experts to navigate the application process effectively.
  • Understanding Legal Requirements: Ensure compliance with all legal requirements to avoid future complications.

Regular Updates and Compliance

  • Stay Updated: Keep track of any updates or changes in the scheme’s policies or requirements.
  • Maintain Compliance: Ensure ongoing compliance with the scheme’s guidelines to continue enjoying its benefits.


The Startup India Scheme stands as a robust testament to the Indian government’s commitment to fostering an environment conducive to entrepreneurial growth and innovation. This initiative has not only simplified the journey of starting and scaling a business in India but has also played a pivotal role in shaping the country’s economic landscape.

Summarizing the Key Takeaways

  • Comprehensive Support: From financial aid to easing regulatory burdens, the scheme provides a comprehensive support system for startups.
  • Encouraging Innovation: It has created a platform for innovative ideas to flourish, contributing significantly to various sectors of the economy.
  • Challenges and Room for Improvement: While the scheme has been successful in many aspects, it continues to face challenges in implementation and inclusivity, highlighting areas for further refinement.
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