"Make in India" is a graveyard for startups.
An opinion piece published by The Print on May 12, titled "Make in India is a graveyard for startups," argues that Indian startups face cumbersome registration compliance procedures, difficulty accessing funding through credit, insufficient government incentives, and psychological pressure from societal culture. To revitalize entrepreneurship, the Indian government should simplify compliance, resolve regulatory dilemmas, and provide fair and transparent credit avenues. The author of this article, Karti P Chidambaram, is a member of the Indian National Congress.
Enterprises are the foundation of a prosperous economy, as they promote innovation, create jobs, and drive economic growth. In the case of India, with a population exceeding 1.4 billion, there is immense potential for entrepreneurship. If India's large youth population turns to entrepreneurship, it could have revolutionary effects.
However, the current state of Indian entrepreneurship is poor, with the failure of startups becoming common, and the number of new businesses declining. In terms of startup numbers, data shows that over 28,000 startups failed in the 2023-2024 period, an increase of 12 times compared to the previous three years. Additionally, the number of newly established businesses has decreased; only 5,264 new enterprises were founded in 2024, and only 125 new businesses were registered in early 2025. In terms of industries, many startups in agriculture technology, fintech, edtech, and healthtech—once considered "revolutionary sectors"—have collapsed due to high burn rates, lagging regulations, low customer retention, and lack of institutional support. Recently, Commerce Minister Piyush Goyal criticized Indian startup companies for being fixated on "low-end innovations" like food delivery, ignoring the困境 startups face due to insufficient investment and lack of policy support.
The main problems with India's entrepreneurial environment are threefold: first, the cumbersome registration compliance procedures consume the energy and funds of startups. Indian startups must navigate complex processes such as Goods and Services Tax (GST) registration, environmental permits, approval from the Food Safety and Standards Authority, and municipal permits, among others. This not only consumes substantial funds but also dampens morale. Second, defects in the credit system prevent startups from obtaining financing. On one hand, outdated and opaque credit models like CIBIL currently used by Indian banks disadvantage young entrepreneurs who lack borrowing experience, collateral, and elite connections. On the other hand, venture capital tends to favor entrepreneurs from big cities, fluent in English, highly educated, and well-connected, leaving many without equal opportunities. Third, the incentive measures under "Make in India" are flawed and fail to strongly support startups. Although ambitious, "Make in India" suffers from frequent policy changes, fragmented governance, and inadequate infrastructure, leading to its ultimate failure to materialize as planned and reducing it to a hollow slogan.
In this entrepreneurial environment, many potentially successful startups are stifled by bureaucratic obstacles, dampening the enthusiasm of Indian entrepreneurs. Founders of businesses not only face economic pressures but also bear immense psychological burdens. For example, in 2019, entrepreneur VG Siddhartha died due to high debt and alleged "pressure from the tax authorities." Indian society views business failure as a "stigma" rather than an opportunity to learn. Pratyush Rai, founder of Merlin AI, once stated: "In the U.S., failure is a rest stop, while in India, it is a dead end."
To change the current state of entrepreneurship, the Indian government can take three measures: first, require regulatory agencies to process enterprise applications within 15 days, automatically approving them if overdue. Second, incentivize compliance by offering rewards and support to individuals or entities meeting standards, thereby alleviating regulatory burdens. Third, simplify compliance procedures, resolve regulatory dilemmas, and provide fair and transparent credit pathways for businesses. Most importantly, India needs to foster a social culture that encourages innovation.
Original source: https://www.toutiao.com/article/1832247725917196/
Disclaimer: The article solely represents the views of the author.