As India strives to expand its already thriving startup environment, the central government is eager to be your business partner if you build a startup focusing on digital solutions for agriculture, climate change, rural development, education, and even health care delivery.
The ministries of agriculture and electronics, for example, are preparing to accept business applications from individuals, investors, and enterprises in which the state will hold limited equity partnerships.
According to an official who requested anonymity, one of the reasons the Union government opted to become an investor is to provide "nascent-stage finance for fresh entrants given India's growing startup environment and the potential they have to alter numerous sectors."
By handling previous efforts like as Startup India, which had an investment of over 900 crore, the government had a "good notion and loads of data" on startups' potential and the value they can bring to the economy's production, the source added.
After the United States and China, which added 487 and 301 unicorns, respectively, in 2021, India has surpassed the United Kingdom to become the third most populous country in terms of unicorns. According to the latest Economic Survey, India has 83 unicorns with a total worth of $277.77 billion as of January 14. A unicorn is a company that has a market valuation of at least $1 billion.
According to a second official, the agriculture sector is being viewed as a "sunrise sector," with digital technology already showing signs of future growth. Additional agricultural secretary Abhilaksh Likhi made a worldwide pitch on February 18 at the Dubai Expo 2020.
"He asked startups and FPOs (farmer producer organisations) to submit ideas to the agricultural ministry," a second official, who did not want to be identified, added.
Proposals for equity grants, management expenses, and other support measures for agri-tech-led enterprises are being considered by the agricultural ministry.
Since the 1970s Green Revolution, India's huge agriculture industry, which is dominated by tiny and impoverished cultivators, has experienced no substantial technical breakthrough.
Startups focused on accurate inputs to data-based, tailored crop monitoring packages, and market information are expected to be the next technological leap in the agriculture industry.
"The increased usage of deep-tech solutions across the country is fueling India's agricultural revolution, or agriculture 4.0," according to a spokesperson for Aqgromalin, an agri-startup.
Aqgromalin, for example, is a technology-driven agricultural diversification platform that uses a "stack tech" solution to allow farmers to enter the animal husbandry and aquaculture businesses.
DeHaat is the fastest-growing agri-tech start-up in the country, offering end-to-end AI-based solutions. Ninjacart is India's biggest fresh vegetable delivery service.
The government will create a new fund for the new effort, although its involvement may be restricted to a 20 percent equity stake. Private equity fund managers will handle the fund.
Aside from agriculture, the initiative will involve the ministries of electronics and information technology, as well as health.
"Holding 20% restricted stock in any business implies the enterprises will get more funds to expand," said Ashish Patel, a partner at Tech-X, a startup backer.
