India is now home to the world’s third most vibrant startup ecosystem, with over 140,000 recognised startups, more than a hundred unicorns, and over $150 billion in funding raised, said Shaktikanta Das, Governor, Reserve Bank of India (RBI) on Monday. Das hailed the growth of the Indian startup ecosystem in the backdrop of India’s “world-class digital public infrastructure (DPI).”
Speaking at the central bank’s RBI@90 High-Level Conference titled Central Banking at Crossroads, the governor said the DPI developed by India has facilitated the development of high-quality digital financial products with enormous potential for cross-border payments.
“India’s experience in DPI can be leveraged by other countries to improve and usher in a global digital revolution,” said Das.
As of October 14, the number of started registered with the Department for Promotion of Industry and Internal Trade (DPIIT) had crossed the 1.5-lakh mark.
The government has also taken additional measures to boost startups’ growth. In September this year, Commerce Minister Piyush Goyal had launched a new digital platform Bharat Startup Knowledge Access Registry (BHASKAR) as a centralized platform for different stakeholders of the startup ecosystem including startups, investors, mentors, service providers, and government bodies to connect, exchange ideas and grow.
Goyal had also said that the government is coming up with a new not-for-profit company under Section 8 of the Companies Act to house all initiatives and bodies of the Startup India programme. This could be similar to Invest India – an investment promotion agency of the government run in a public-private partnership mode.
Indian technology startups during the first half of 2024 had raised $4.1 billion, declining by 13 per cent from $4.8 billion raised during the January-June period of 2023, according to the data from Tracxn. Deal count had also dropped 54 per cent to 540 during the period from 989 in the first half of last year.
Meanwhile, Das also noted that while the latest technological advancements such as AI and ML have opened new avenues of business and profit expansion for financial institutions, at the same time, these technologies also pose financial stability risks.
“The heavy reliance on AI can lead to concentration risks, especially when a small number of tech providers dominate the market. This could amplify systemic risks, as failures or disruptions in these systems may cascade across the entire financial sector,” he added.