Need innovation, not just incentives: Experts at Startup Mahakumbh

The government is listening to startup founders to bring out the next phase of India’s startup policy, said Arti Bhatnagar, additional secretary at the Department for Promotion of Industry and Internal Trade (DPIIT).

A panel discussion on simplifying regulatory processes for startups, moderated by Shweta Rajpal Kohli, president & CEO of the Startup Policy Forum, highlighted the challenges founders face in dealing with fragmented regulatory frameworks spread across different ministries.

“It’s time to go beyond subsidies and tax incentives. We need to build a strong innovation infrastructure,” said Abhishek Singh, additional secretary, MeitY. Singh emphasised the role of regulatory clarity, digital infrastructure, and ease of doing business as fundamental elements for startup growth.

Manmeet Kaur Nanda, joint secretary, Empowerment of Persons with Disabilities, reinforced this view, highlighting inclusivity as a crucial factor. “Policies should not just be about fostering unicorns but about broad-based participation, including startups that address social impact,” she said.

Arti Bhatnagar, additional secretary, DPIIT, pointed to ongoing efforts in simplifying regulations. “We are actively reducing compliance burdens and ensuring startups can focus on innovation rather than paperwork,” she shared, adding that DPIIT is working on a framework to streamline regulatory approvals.

One of the key takeaways from the discussion was the need to bridge the digital divide. While India’s startup ecosystem thrives in metro cities, smaller towns and rural areas lag due to infrastructural gaps. “A Bengaluru or Gurugram-based startup has access to resources that a Tier-2 city startup does not,” Singh admitted.

He pointed to the government’s work on expanding digital public goods, such as India Stack, and increasing high-speed internet penetration in smaller towns. “If we truly want grassroots innovation, we need to provide these startups with the same tools that urban entrepreneurs have,” he said.

However, the fact remains that nearly 45% of India’s startups are now emerging from Tier-2 and Tier-3 cities, but many struggle due to a lack of incubators and funding access. “We are working on strengthening the incubation network, and soon, we will roll out a dedicated startup fund for these regions,” Bhatnagar said.

A major point of agreement among the panelists was that the government should act as an enabler rather than a gatekeeper. Kohli emphasised that policy should be about “laying the foundation and stepping back.”

Bhatnagar cited DPIIT’s efforts to streamline startup recognition and regulatory approvals. “The Startup India initiative is evolving to be more than just an entry gate—it’s about continuous support,” she said.

Nanda added that accessibility for underrepresented entrepreneurs, including women and disabled founders, should be a critical policy focus. “We are working on making funding and incubator access more inclusive,” she said.

What’s the next frontier?

The discussion also turned to India’s need to invest in AI, deep-tech, and research-driven startups. “We cannot remain a service-driven startup economy forever. We need to bet big on AI, semiconductors, and biotech,” Kohli opined.

Singh highlighted the government’s AI initiatives, citing the recent ₹10,000 crore AI fund announced in the Union Budget. “AI is going to shape the next decade, and we must ensure Indian startups have a level playing field. We are working on ethical AI frameworks and talent development programs,” he said.

Bhatnagar echoed this sentiment, emphasising the role of AI in various sectors. “From healthcare to logistics, AI-led solutions will drive efficiencies. We are supporting startups in this space through funding and regulatory clarity,” she said.

Nanda pointed out the challenges AI startups face, particularly in accessing large datasets. “AI needs data, and while we have massive public datasets, we need policies that allow startups to leverage them responsibly,” she said.

India’s startup policies need to evolve beyond funding and incentives. It is clear that the focus needs to be on infrastructure, inclusivity, regulatory clarity, and deep-tech investments.