In a bid to propel India into the forefront of global innovation, Amitabh Kant, India’s G20 Sherpa and former NITI Aayog CEO, is advocating for increased participation from domestic investors, including insurance companies, pension funds, and family businesses, in the country’s startup ecosystem. Kant highlights the current imbalance, with nearly 75-80% of startup funding originating from foreign investors, emphasizing the need for a substantial shift.
In a recent post, Kant underscored the imperative for Indian resources to fuel the momentum of the country’s startup movement. “Indian insurance companies, pension funds, and Indian family businesses need to fund and support India’s start-ups,” he stated. “All of them have vast investible surpluses. They need to commit resources in the Indian startup movement.”
Kant’s plea aligns with the ongoing trend of increasing interest from foreign investors in the Indian startup landscape. Despite the challenges posed by the conflict between Ukraine and Russia impacting foreign direct investment (FDI) in India, investments from countries like Singapore, Mauritius, the US, the UAE, and the Netherlands have continued to grow, aided by an improved regulatory environment.
The G20 Sherpa believes that for India to ascend as a leading startup nation, a significant focus on innovation and deep tech is crucial. “We must convert the winter into a spring season for Indian Startups,” Kant emphasized, alluding to the current funding winter that has adversely affected the Indian startup ecosystem, leading to layoffs and shutdowns.
Addressing the funding winter, Kant asserted that it could be a funding spring for high-potential startups with robust plans and goals. He has consistently stressed the importance of good governance and financial management for the success of startups.
‘Indian Tech Startup Funding Report Q3 2023’ indicates a positive trend with over 450 investors participating in Indian startup investments, totaling $1.7 Bn, it also notes a decline from $3 Bn in Q3 2022. This underlines the urgency for increased participation from domestic investors to mitigate the impact of external factors and contribute to the growth of India’s vibrant startup ecosystem.
