Startups Key to India's 3rd Largest Economy: CEA Nageswaran
India's Chief Economic Advisor, V Anantha Nageswaran, highlighted that India is on track to become the world's third-largest economy soon. He emphasized the pivotal role startups will play in this journey. Nageswaran emphasized the significant contribution of tier 2 and tier 3 cities, including Thiruvananthapuram, in fostering the growth of startups in India. Speaking at the Huddle Global 2023 during a Leadership Talk, he reiterated India's trajectory towards becoming the third-largest economy shortly. He also expressed the possibility of achieving a $7 trillion economy by 2030 if the current growth momentum is sustained, highlighting the vital role of startup entrepreneurs in this pursuit.
The Chief Economic Advisor highlighted that involving startups in developing business models based on both expanding physical and digital infrastructure will consistently yield revenue, efficiency, and economic benefits. Nageswaran noted a remarkable shift in India's startup landscape over the last decade. Presently, the Department for Promotion of Industry and Internal Trade (DPIIT) recognizes over 112,000 startups spanning 763 districts, with more than 110 unicorns collectively valued at approximately $350 billion.
He also emphasized that innovation in India spans various sectors, with startups addressing challenges in 56 different industries. Around 13 percent operate in IT services, nine percent in healthcare, seven percent in education, five percent in agriculture, and another five percent in the food and beverage sector. Notably, 49 percent of these startups emerge from tier-2 and tier-3 cities, reshaping the business landscape due to cost advantages compared to tier-1 cities. Nageswaran highlighted that beyond enhanced infrastructure and supportive government policies, the presence of a skilled talent pool in these cities significantly supports startups in establishing and thriving.
He mentioned a historical perception that conducting business in small towns was challenging. However, this perception has shifted due to improved internet accessibility, enhanced physical infrastructure, better transportation links such as roads, railways, and air connectivity, along with favorable government policies, making conducting business in tier-2 and tier-3 cities more viable.
