Startups will play important role in helping India become third largest economy: CEA Nageswaran

Startups will play an important role in helping India become the third-largest economy in the world, Chief Economic Advisor (CEA) to the union government V Anantha Nageswaran has said.

Nageswaran said that tier-II and III cities, including Kerala's capital, have become game-changers in helping startups flourish in the country due to improvements in infrastructure and supportive policies of the government, according to a KSUM release.

The CEA, during his Leadership Talk on the concluding day of the Huddle Global 2023 organised by the Kerala Startup Mission (KSUM), said that India was the fifth largest economy on course to become the third largest in a few years.

"In fact, I will say 7-in-7 is the buzz slogan, that is $7 trillion economy in seven years. The $7 trillion economy size by 2030 is possible if India maintains its present growth trajectory, and in that journey, startup entrepreneurs are going to play an important role," he is quoted as having said in the release.

He was of the view that the active participation of startups in India in developing business models on the foundation of expanding physical and digital infrastructure will continue to generate efficiency, revenue and economic returns for the country.

"The last decade has seen an exceptional transformation in the startup landscape in India, which has emerged as the third largest ecosystem globally, with over 1.12 lakh startups presently recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) across 763 districts.

"Among them, more than 110 are unicorns with a total valuation of around $350 billion," he said.

The CEA further said that the country ranks second in innovation quality.

He said that innovation in India was not just limited to certain sectors as startups were solving problems in 56 industrial sectors, with 13% of them from IT services, 9% from health and life sciences, 7% from education, 5% from agriculture, and 5% from food and beverages.

Nageswaran also said it was significant that 49% of the startups were from Tier-II and III cities, which have turned out to be game-changers as the business advantages in these locations enable entrepreneurs to operate at lower costs as compared to Tier-I cities.

"Apart from improved infrastructure and the government's pro-active policies, the availability of a technically skilled talent pool is a huge advantage for startups to set up and flourish in Tier-II and Tier-III cities," he said.

He said that historically there was a perception that small towns were difficult places to conduct business.

"...but with improved internet penetration, vastly better physical infrastructure, road, rail and air connectivity and supportive government policies, this is no longer true," he said.

He also noted Kerala's startup journey has been an inspiring one.

The CEA said that KSUM has served as the catalyst since its establishment in 2006 to promote change that propelled the state into the forefront of the global startup arena.

KSUM is the Kerala government's nodal agency established in 2006 for entrepreneurship development and incubation activities in the state.

Nageswaran said that with over 4,000 registered tech startups, 63 incubators, and 10 lakh square feet of incubation space, KSUM has not only met its goal of promoting technology-based entrepreneurship but has also earned the distinguished position of being among the world's top business incubators.

The November 16-18 fifth edition of Huddle Global, India's biggest beachside startup conclave, was organised by KSUM at Adimalathura beach, near Vizhinjam, here.

Attended by around 1,500 delegates, the event displayed sophisticated products from emerging sectors such as robotics, Artificial Intelligence, Machine Learning, Augmented Reality, Virtual Reality, life sciences, space tech, blockchain, IoT, e-governance, fintech, healthtech, agritech, edutech and SaaS from across the country.