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The opportunities for start-ups in India are immense, but so are the challenges. Discuss.
In the past few years, the Indian startup ecosystem has witnessed an immense growth. According to NASSCOM, the startups in India saw a 108 percent growth in total funding from USD 2 billion in 2017 to USD 4.2 billion in 2018. More than 1,200 startups came up in 2018, including eight unicorns, taking the total number to 7,200 startups. Opportunities for startups in India: The population of India makes India a big consumer market, which has the capacity to sustain the growth of startups in the country. India has the largest youth population, which is the largest driver for innovation, workforce, talent and future leaders. India has its own challenges of education, health, infrastructure and inequality. This presents a big opportunity for start-ups to solve a variety of problems. The fast growing number of internet users and falling internet prices has played a catalytic role in expanding the startup ecosystem, with almost 500 million Indians now using internet services across the country. India also boasts of being home to the 3rd largest unicorn community, with over 16 high valued startups. These unicorns have made a huge difference by changing the outlook of global investors, VC & PE Firms, and global corporates towards the massive opportunity presented by the growing Indian consumer market. Startup business challenges Market structure: Indian markets are largely unorganized and fragmented that create a roadblock for a startup to succeed. Financial Issues: Flawed business models and lack of innovative revenue strategies have led to the failure of many startups and they are forced to shut down operations. In the initial phase of operations, startups do not get funding from banks, given no credit history of the firm. Regulatory Issues: Budding entrepreneurs have to make multiple trips to government offices to register and seek clearances. Taxation : The taxation structure has not been conducive for growth of startups especially the ones in early years of their inception, which are in desperate need for capital to fund their growth and other business requirements. Socio-culture challenge: The Indian culture has conditioned people to look down upon failure. But entrepreneurship is often associated with failing and learning from those failures and starting all over again. Cyber security: Tech-startups that collect user information to drive business insights are particularly vulnerable to cyber threats. Recognizing the opportunities, the government has taken many proactive measures like Startup India, Standup India, Startup exchange etc. to promote entrepreneurship and develop the eco-system in India. Today, Indian economy is undergoing an immense makeover with new strategies rolling into the market emphasizing and enhancing the role and contribution of startups. Besides streamlining various business processes and regulations, there is an urgent need to create a single online clearance system for new entrepreneurs, which would allow them to apply for and track the status of their applications/license permits online.
