6,835 startups, out of the total recognised startups, have been termed closed as of 31 October 2025, the government told Rajya Sabha on Friday. The report also mentioned that, during the same period, 1,97,692 startups received the official startup recognition from DPIIT.
Maharashtra, Karnataka and Delhi record the highest shutdowns
The reply further categorised these shutdowns on the basis of geography. Maharashtra saw the highest number of closures with 1,200. Karnataka saw 845 closures while Delhi witnessed 737. Furthermore, Uttar Pradesh witnessed 598 shutdowns, Telangana saw 368, and Gujarat saw 348 closures.
Southern and western states together formed the bulk of the closures. Tamil Nadu witnessed 338 shutdowns, Haryana stood at 306, Kerala saw 241, and Rajasthan at 211. The report added that smaller states and Union Territories had a smaller number of startups closing, with Mizoram and Andaman & Nicobar Islands recording three shutdowns each.
Govt flags business viability as key factor
The government said that startup shutdowns are influenced by multiple business factors, including the viability of business models, alignment with market demand, domestic and global economic conditions, the nature of products and services, and the ability to raise funding. It also stated that no systemic spike in closures has been observed.
The response was given to questions on whether startup closures had risen by more than 30% in 2025 compared to 2024. The government did not provide year-wise closure data but maintained that the overall trend does not indicate abnormal distress.
Tamil Nadu, Karnataka, Maharashtra, Delhi and Telangana were among the leading recipients of seed funding across these years, according to the government data.
Credit guarantees rise sharply in 2024
Under the Credit Guarantee Scheme for Startups, loans worth Rs 220.78 crore were guaranteed in 2023, rising sharply to Rs 381.08 crore in 2024. From 2025 till 31 October, guaranteed loans stood at Rs 153.4 crore, the report noted.
Maharashtra, Karnataka, Haryana, Tamil Nadu and West Bengal were among the top states by value of guaranteed lending in recent years.
Despite the number of closures, the government maintained that India’s startup ecosystem remains structurally stable, supported by a mix of venture funding, seed capital and credit guarantees. It reiterated that business exits are influenced by market forces and company-specific dynamics rather than systemic failure of the startup framework.