E-Paper
India needs policy support for entrepreneurial universities
This article is authored by Shobhit Mathur, VC, Rishihood University.
By the end of 2024, India had established itself as the third-largest startup ecosystem in the world, with over 1.57 lakh recognised startups. Yet this rise has not translated into an academically grounded innovation culture. India's universities have fallen well short of their potential as crucibles for entrepreneurial innovation.
A study timed to India's 100th unicorn milestone in June 2022 found that over 50% of those unicorns were founded by IIT graduates, an impressive pedigree but incubated largely outside their campuses. The GUESSS India 2023 Report, found that while 38% of Indian college students were involved in venture creation, 33% remained at the nascent stage and only 4.8% had reached the revenue-generating stage.
Despite over a thousand universities, most successful innovation continues to happen beyond them. A 2024 NITI Aayog working paper noted India's Gross Enrollment Ratio at 28.4% in 2021-22, with a government target of 50% by 2035. Employment at this scale can only be accommodated through entrepreneurship, and the generational window to build its ecology is closing fast.
The global contrast is instructive. Stanford and Silicon Valley grew together, each feeding the other. Research universities abroad have become engines of intellectual property, startups, and employment at scale. India's universities, anchored to the logic of degrees and placements, have largely stayed out of this conversation.
The entrepreneurial university model offers a viable template — building incubation centres, supporting patent filing and research commercialisation, enabling industry-led mentorship, and treating experimentation as a pedagogical asset. IIT Madras is a case study, as the total valuation of its startups between 2011 and 2023 stood at $ 4.6 billion.
Universities cannot make this transition without structural backing. Dedicated funding for innovation infrastructure, simplified IP frameworks, and regulatory latitude for faculty and student entrepreneurship are prerequisites. Section 35(1) of the Income Tax Act already grants corporates a 150% tax deduction on funding scientific research at universities. A mirror provision for corporates building venture labs and funding university-incubated startups would meaningfully accelerate this shift. Equally, the UGC's 10% cap on professors of practice warrants revision; raising it to 40% would enable the deep industry integration that student entrepreneurship demands.
The recently launched Prime Minister Research Chair (PMRC) scheme, which brings distinguished Indian-origin scientists back into India's research ecosystem, is a welcome step. However, restricting host universities to the NIRF Top 100 reveals an implicit mistrust of newer, potentially entrepreneurial institutions. Research funding must percolate to universities with genuine risk appetite and robust innovation mechanisms. Building EUs should be seen as a huge opportunity to curate undergraduate entrepreneurship programmes of excellence, with a strong interdisciplinary curriculum curated as a confluence of technology, design and entrepreneurship coming together.
India has proven it can build a startup culture of global scale. The harder task is anchoring that culture inside the university system. The country's future founders are already sitting in classrooms. It is time their institutions were designed around them.
(The views expressed are personal)
This article is authored by Shobhit Mathur, VC, Rishihood University.
