(The Indian Express has launched a new series of articles for UPSC aspirants written by seasoned writers and scholars on issues and concepts spanning History, Polity, International Relations, Art, Culture and Heritage, Environment, Geography, Science and Technology, and so on. Read and reflect with subject experts and boost your chance of cracking the much-coveted UPSC CSE. In the following article, Ritwika Patgiri explores women-led start-ups in India.)
Commerce Minister Piyush Goyal’s recent comments on India’s start-up ecosystems and its innovation priorities evoked strong reactions from some entrepreneurs. The comments also brought renewed focus on the country’s dynamic entrepreneurial landscape, which, nonetheless, stands out in many ways, including the growing participation of women in this traditionally male-dominated arena.
According to government data, India has a total of 1.6 lakh startups supported and recognised by the government, and nearly half of them (over 73,000 startups) have at least one woman director. In terms of funding raised by companies with women founders, the Indian tech startup ecosystem ranks second after the US, according to a report by Tracxn. The same report revealed that India is home to around 7000 women-led startups, which is around 7.5% of all startups in the country.
But what is a start-up? What is the status of women-led startups in India? How has the Government of India supported the growth of women-led startups? Let’s explore.
What is a start-up?
The Government of India’s Startup India initiative, launched in 2016, has been an important stepping stone in fostering entrepreneurial spirit among the youth as well as women. A startup refers to a newly established company, usually formed with a small team and limited resources. It aims to develop a product or service and bring it to the market for consumers.
According to Resurgent India’s report, there are broadly six types of startups – scalable startups, small business startups, lifestyle startups, buyable startups, big business startups, and social startups. A startup is recognised by the Department of Promotion of Industry and Internal Trade (DPIIT) in India if it qualifies the following criteria:
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(i) It must not be older than 10 years from the date of its incorporation and commencement of operations;
(ii) It should be incorporated as a Private Limited Company, as a Registered Partnership Firm, or as a Limited Liability Partnership;
(iii) It should have an annual turnover not exceeding Rs 100 crore for any of the financial years since its incorporation;
(iv) It should not have been formed by splitting up or reconstructing an already existing business; and
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(v) It should work towards the development or improvement of a product, process, or service and/or have a scalable business model with high potential for the creation of wealth and employment.
Supporting women-led start-ups
The Startup India Action Plan and the subsequent Startup India: The Way Ahead Programme have simplified the regulations, provided funding support, and fostered partnerships to create a vibrant startup ecosystem. Startup India’s flagship Capacity Development Programme for Women Entrepreneurs conducted around 24 workshops across 10 states, providing mentorship and guidance to more than 1,300 women entrepreneurs.
The Startup India Seed Fund Scheme (SISFS), the Funds of Funds for Startups (FFS), and the Credit Guarantee Scheme for Startups (CGSS) are a few schemes that provide financial assistance to early-stage startups. Further, the government has made it easier for startups to operate by reducing the compliance burden for them.
A number of such measures, including turnover relaxation, fast-tracked patent application processes, and income tax exemptions for startups, have contributed to the rise of women-led startups, especially in retail, edtech, and enterprise applications.
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Some of the other sub-sectors with women-led startups include business-to-consumer e-commerce, internet-first brands, and fashion technology. However, the number of acquisitions of women-led startups has declined from 45 buyouts in 2021 to just 16 in 2024. But in 2024, five women-led startups went public (or had a stock launch) – MobiKwik, Usha Financial, Tunwal, Interiors and More, and LawSikho.
Women entrepreneurship and gender dynamics
Research suggests that strong financial support, mentorship, and a sustainable ecosystem are important indicators in driving women-led startups. Further, education, family support, as well as confidence are crucial in determining women’s entry into entrepreneurship.
Other external factors like training, skill development, marketing support, regulatory exemptions, and opportunities also contribute to bringing women into the entrepreneurial space. The autonomy and flexibility that entrepreneurship provides serve as major motivators for women to launch their businesses, according to the Resurgence India report on the Indian Startup Ecosystem for Women Entrepreneurs.
However, one of the most important questions remains if the entry of women in entrepreneurship leads to changes in their societal and familial status. One could suggest that women’s entry into the economic sphere helps them gain financial independence and potentially shift traditional gender roles and expectations.
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But studies have also highlighted the persistence of women’s double burden of work, emphasising that financial independence does not necessarily relieve women of domestic and caregiving responsibilities. The nature and type of a woman’s business ventures play a critical role in defining her societal and familial role.
Increased recognition and financial contribution to the household can enhance women’s role in decision-making and influence existing power dynamics. Additionally, it is important to distinguish between necessity-driven entrepreneurship and dynamic entrepreneurship (or opportunity-driven) in understanding the financial and societal impact of such businesses on women’s domestic roles and status.
Challenges faced by women entrepreneurs
The Mastercard Index for Women Entrepreneurs ranked India 57th out of 65 countries in 2021. Further, the Global Entrepreneurship Research Association notes that India’s entrepreneurship system is largely necessity-driven, with 2.6% of the female adult population being engaged in entrepreneurial activities as of 2020.
According to the MSME Annual Report of 2023-24, 80% of all enterprises in India are owned by men. The proportion of male ownership of enterprises in urban India is more than in rural areas, with women in urban areas only owning 18.42% of all enterprises. Moreover, women are more likely to own micro enterprises as compared to small or medium enterprises. Hence, the distribution of enterprises in India remains gendered.
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Therefore, while women-led startups are gaining prominence, it is important to examine the other side of the Indian entrepreneurship landscape. The Government of India has worked towards creating a supportive and conducive startup ecosystem for the youth as well as women. However, data suggests that the lack of customer orders serves as one of the biggest hurdles for women entrepreneurs in India, followed by domestic and personal challenges and duties.
Other issues that female entrepreneurs in India face include supply chain disruptions, limited access to skilled workforce, and financial constraints. Despite recent improvements, India has one of the lowest female labour force participation rates in the world. Women’s entry into entrepreneurship can be an important step in increasing women’s entry into the labour force. It is reported that around 71% of women entrepreneurs in India employ at most five persons. With a more supportive ecosystem, women can create more jobs and contribute to the economy.
Post Read Questions
How has the government supported the growth of women-led startups?
Does the nature of a woman’s business venture influence her societal and familial status?
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What factors contribute to the low female labor force participation rate in India, and how can entrepreneurship help address this issue?
How do the challenges faced by women entrepreneurs in India, such as supply chain disruptions and limited access to finance, impact their growth prospects?
What can be done to create a more conducive ecosystem for women entrepreneurs to scale their businesses and create more jobs?
(Ritwika Patgiri is a doctoral candidate at the Faculty of Economics, South Asian University.)
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