India's Startup Ecosystem: Maturing from Scale to Selectivity After a Decade of Startup India

• India's startup ecosystem, celebrating 10 years of Startup India, shows rapid scale with over 2 lakh DPIIT-recognized startups and 21 lakh jobs generated, making it the third-largest globally.
• Despite high failure rates (90% within five years per a 2017 study), Union Minister Piyush Goyal stated India's startup success rate is relatively higher than the rest of the world.
• Funding declined by 11.1% in 2025 to $11.2 billion, reflecting global macroeconomic uncertainty and a shift towards investor focus on capital efficiency and profitability.
• Capital is increasingly flowing into sectors with policy tailwinds and long-term visibility like aerospace, real estate, environment tech, enterprise tech, fintech, and climate-linked sectors.
• The ecosystem is moving towards 'first-principles thinking,' balancing profitability and sustainable growth, with entrepreneurship expanding beyond metros to Tier 2 and Tier 3 cities.

Why It Matters: India's startup ecosystem is maturing, shifting from broad-based growth to selective, profitable, and sustainable ventures.