The central government is willing to be your business partner if you launch a startup focused on digital solutions for agriculture, climate change, rural development, education and even health care delivery, as India aims a big boost to its already bustling startup ecosystem.
Ministries are gearing up to open themselves to business proposals from individuals, investors and firms where the state will hold limited equity partnerships, including the ministries of agriculture and electronics.
A reason why the Union government has decided to be an investor is to provide “nascent-stage funding for newer entrants given India’s promising startup ecosystem and the potential they hold to transform the many sectors”, an official said, requesting anonymity.
The government had a “good idea and lots of data” on startups’ potential and the value they can add to the economy’s output by managing earlier initiatives such as Startup India, which had an outlay of over ₹900 crore, the official said.
India has overtaken the UK to be the third highest country in number of unicorns after the US and China, which added 487 and 301 unicorns, respectively, in 2021. As of January 14, India has 83 unicorns, with a total valuation of $277.77 billion, according to the latest Economic Survey. A unicorn is a startup with a valuation of at least $1 billion.
The agriculture sector is being seen as a sunrise sector, a second official said, where digital technologies have already shown promising growth. On February 18, at the Dubai Expo 2020, additional agriculture secretary Abhilaksh Likhi made a global pitch.
{{/usCountry}}The agriculture sector is being seen as a sunrise sector, a second official said, where digital technologies have already shown promising growth. On February 18, at the Dubai Expo 2020, additional agriculture secretary Abhilaksh Likhi made a global pitch.
{{/usCountry}}“He invited the startups and FPOs (farmer producer organisations) to submit their proposals to the agriculture ministry,” the second official said, declining to be named.
The farm ministry is considering proposals for providing equity grants, management costs and other support measures for agri-tech led startups.
India’s vast agriculture sector, dominated by small and poor cultivators, hasn’t seen a major technological innovation since the 1970s Green Revolution, whose impact is fading fast.
Startups focused on services such as precise inputs to data-based, customized crop monitoring packages, and market intelligence are being projected as the next being technical leap in the farm sector.
“India’s agricultural revolution, or agriculture 4.0, is being fuelled by the rapid use of deep-tech solutions across the country,” said a spokesperson for Aqgromalin, an agri-startup.
Aqgromalin, for instance, is a technology-driven agricultural diversification platform that allows farmers to enter the animal husbandry and aquaculture industries through a “stack tech” solution.
DeHaat is the country’s fastest-growing agri-tech start-up providing end-to-end AI-based solutions. Ninjacart is India’s largest fresh produce supply chain startup.
The government will set up a new fund for the new initiative, but its participation could be limited to an equity ownership of 20%. The fund will be managed be private equity fund managers.
Apart from agriculture, ministries which will participate in the initiative include the ministries of electronics and IT and health.
“What holding 20% limited equity in any startup means is that the ventures will get additional cash to achieve scale,” said Ashish Patel, a partner with Tech-X, a startup funder.