Nearly 6,400 DPIIT-recognised startups have shut shop; Maharashtra and Karnataka lead the tally

Under the Startup India initiative, 6,385 recognised entities have shut down so far, and the government has not observed any increase in startup closures, said Jitin Prasada, Minister of State in the Ministry of Commerce and Industry, responding to a question in the Parliament today.

These are startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).

Maharashtra and Karnataka lead the tally with 1,200 and 845 DPIIT-recognised startups closing shop, respectively, so far. They are followed by Delhi with 737 and Uttar Pradesh with 598, the data cited in the response showed. 

Prasada was responding to a question from Samajwadi Party MP Anand Bhadauria on how many startups had shut down in the past three years and whether closures had risen 30% this year compared to 2024. While year-wise data was not shared, Prasada said there had been no increase in startup shutdowns.

“Closures that do occur are generally influenced by factors such as the viability of the business model, alignment with market demands, domestic and global economic conditions, the nature of products and services developed, the ability to attract funding, and other business-specific considerations,” Prasada said in his response.

His assertion that startup closures have not increased is notable at a time when India’s startup ecosystem—the world’s third-largest—has been navigating a prolonged funding winter. Over the past three years, foreign investors, the country’s main source of venture capital, have pulled back amid global macro headwinds and India’s struggle to catch the AI wave.

India currently has 1,97,692 DPIIT-recognised startups under the Startup India initiative, as of October 31, 2025, data presented in the Parliament showed.

To be recognised, a firm must be registered as a private limited company, partnership, or a limited liability partnership; have annual turnover below Rs 100 crore in any previous year; be less than ten years old; and be working on innovation or improving existing products, services, or processes with the potential to create jobs or wealth. Entities created by splitting or restructuring an existing business are not eligible.