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Indian startup guide: background, prospect, statistics 💰

India is one of the most rapidly growing economies in the world. Moreover, it possesses a developed startup ecosystem: 26,000 startups. Overall, investors put $63 billion into local startups. Since 1990 the middle class has been increased by 20 times. Digitalization is developing, which allows to implement breakthrough technologies.

What is special about Indian entrepreneurship?

It’s challenging to start a business in India, as there are problems with property registration, contract execution, and high taxes.

Therefore, New-Delhi is the best place to launch a startup since the taxes are lower the process of property registration is simplified. Mumbai and Bangalore are also appropriate cities. Moreover, Bangalore has become a home for IT specialists — this is the first Indian city with technological parks. India entered top 3 countries with the biggest number of unicorns (capitalization is over $1 billion), which also illustrates its technology development.

One of the most expensive Indian projects is Biocon Biologics, which has been valued at $3 billion. One97 Communications has the highest capitalization. It has a valuation of $16 billion and received investments from Intel Capital, Sapphire Ventures, and Alibaba Group.

At the same time, you can enter the Indian market not only with ‘safe’ FinTech, BioTech, or EdTech projects, but also MedTech/WellTech. They are sought-after among the Indians as well. For example, 77 million Indians suffer from diabetes mellitus, which demonstrates the need of new medications. Though, it will be more difficult for travel, food delivery, or taxi startups to enter the market, since they are already among unicorns.

Advantages
⁃ Preferential conditions for startups. They are exempted from paying income taxes for 3 years in case of not allocating dividends or having IMB certificate. Besides, you may avoid paying taxes for investing.

⁃ Intense digitalization since 2014. Though India is weakly urbanized, there are smartphones and reliable internet connection even in rural areas. This increases the potential consumer volume for tech startups. 719 million Indians have Internet access, which is 54% of the population.

Disadvantages
⁃ High taxes. An income tax has a progressive rate from 5% to 30%. The tax-free sum is up to $3,400. If a yearly income exceeds $134,600, you must extra pay 15%.

⁃ Mentality peculiarities. It’s hard to have tasks done on time, as the Indians normally don’t tend to meet deadlines. Ideally, a team needs an Indian in order to understand the culture and particularities of doing business.

Startups
Digit Insurance — the first Indian unicorn. The company offers insurance services.

Innovacer is an India unicorn in the HealthTech sphere. The company collects patient data from different sources. The HealthTech sphere is estimated to reach $50 billion by 2033.

PayTm is an e-wallet. The startup is valued at $16 billion.

BYJU’S has attracted $1,35 billion and become the largest international startup in the EdTech sphere.

Zomato is a good delivery service. It is valued at $5,4 billion.

To open an office in India is expensive, taxes are high, the impossibility to work without local partners — these are all difficulties one is likely to face. On the contrary, India has a huge market which is worth being harnessed.

Would you open a startup in India? Share your thoughts in the chat
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