India’s fintech sector is thriving, with a total of 3,085 recognized startups operating within this industry as of April 30, 2023, according to Union Minister Rao Inderjit Singh. These startups have been recognized under the government’s Startup India initiative, which aims to support and encourage the growth of startups across various sectors, with a specific focus on fintech.
Since the launch of Startup India in 2016, the Department for Promotion of Industry and Internal Trade (DPIIT) has recognized 98,119 entities as startups. These startups receive certain fiscal and non-fiscal incentives provided by the government, such as grants and tax benefits.
To further bolster the fintech ecosystem in India, the International Financial Services Centres Authority (IFSCA) has implemented various measures. One key measure is the introduction of a separate framework called the Fin-Tech Entity Framework tailored to meet the specific needs of fintechs and techfins. Additionally, the IFSCA has introduced an incentive scheme specifically designed for fintechs and startups, which includes grants for startups, sandbox testing, proof-of-concept grants, green fintech grants, listing grants, and accelerator grants.
The government has also taken strategic steps to attract investment inflows into the fintech sector. For instance, the implementation of the Pradhan Mantri Jan Dhan Yojana (PMJDY) aims to promote financial inclusion by facilitating the enrolment of beneficiaries in new bank accounts, enabling direct benefit transfers, and providing access to a wide range of financial services. This initiative has created opportunities for fintech startups to develop technological solutions catered to India’s significant consumer base.
Highlighting the importance of integrating the Jan Dhan Yojana, Aadhar, and Mobile (JAM trinity) along with the Unified Payments Interface, Minister Rao Inderjit Singh emphasized the significant role these initiatives have played in promoting technical inclusivity, transparency, integrity, and the timely delivery of financial benefits and services to the public.
In January 2016, the government of India launched the Startup India initiative with the goal of building a robust ecosystem to nurture innovation and startups, as well as encouraging private investments in the country’s startup scene.
The thriving fintech sector in India, supported by government initiatives and incentives, is showcasing the country’s potential as a hub for financial technology innovation. With over 3,000 recognized startups operating in this sector alone, India continues to drive economic growth and foster technological advancements.
