The majority of existing venture capital funds for start-ups are focused on export-oriented IT or mobile solutions.” There are only very few venture capital funds facilitating startups that offer the high-demand products and services in the healthcare or energy sectors in India's massive domestic market.

Foreign investors need to understand India's business culture

Another problem with funding is that the foreign investors pay no attention to India's unique market demands, talent supply and business culture. They often make wrong assumptions based on what has worked well in their home countries.

Additionally, in Indian startups there is a lack of angel funding and investor participation in companies’ management. Venture capitalists in India prefer to only finance expansion of existing businesses, rather than funding a start-up from scratch.

Indian entrepreneurs need more access to training and mentorship

The report also said that only 22 percent of Indians who plan to start their business in the next 12 months have access to formal or informal training to start a business - which is much lower than the Asia average of 44 percent. Also there are not many entrepreneurs who offer their success stories for the young entrepreneurs to learn.

Finding trusted partners is another big problem

According to the survey, only 16 percent of Indians say that a non-relative can be a trusted business partner. Also there is a lack of judicial infrastructure to protect the trusting relationship between entrepreneurs and business partners or between entrepreneurs and customers.