India Calls on G20 to Increase Startup Investment to $1 Trillion by 2030
India, as the Chair of Startup20, has urged G20 leaders to raise their annual investment in the global startup ecosystem to $1 trillion by 2030. The call comes ahead of the Startup20 Engagement Group’s summit meeting in Gurugram on July 3rd and 4th, under India’s G20 Presidency.
Dr. Chintan Vaishnav, the Chair of Startup20 India, emphasized the need to harmonize the global startup ecosystem while preserving the autonomy of local and national startup ecosystems. India has proposed the adoption of a standard framework to define startups, which is also included in the policy communique. This framework aims to ensure interoperability across the global startup ecosystem.
The NITI Aayog, India’s policy think tank, stated that the final policy communique will lay the foundation for an inclusive and transformative startup ecosystem that promotes economic growth, innovation, and cross-border collaboration. To achieve this, Vaishnav highlighted that NASSCOM (the National Association of Software and Service Companies) and venture capitalists have proposed a startup maturity model. Additionally, a startup governance standard will be introduced to establish a common due diligence standard.
While the existing definitions will be accommodated, Dr. Vaishnav introduced the acronym LASSI to represent the five components of the startup definitional framework: legal entity, age, size (in terms of revenue and people), scalability, and the nature of innovation. He clarified that the framework is recommendatory and not mandatory, allowing member nations to choose components from LASSI according to their preferences. However, adopting all components of the acronym will facilitate interoperability and instill more investor confidence.
To ensure the continuity of the initiative beyond India’s G20 Presidency, Startup20 proposes the creation of a globally networked institution comprised of existing startup-related agencies and nodal bodies within G20 member countries. This network of agencies would drive the global startup ecosystem agenda while supporting the implementation of ideas proposed by the group at national or regional nodes. Startup20 envisions the network growing stronger each year to effectively implement the outcomes of its annual summits.
The first draft of the core Recommendation and Policy Directives for the Policy Communique was made public for comments on May 23rd. Subsequent discussions took place in Goa, leading to a proposed common framework for defining startups. This framework will simplify the identification of startups and facilitate support measures for the sector.
The five task forces of the Startup20 Engagement Group have formulated a series of recommendations, covering foundation, alliances, finance, inclusion, and sustainability. The foundation task force aims to align the existing definitions of member countries with the agreed-upon framework. The alliances task force seeks the adoption of startup-specific policies, regulations, and best practices to enable startups’ smooth access to markets across G20 nations, including access to government contracts.
To facilitate startups’ access to public capital markets, the finance task force emphasizes enabling cross-border listings, tax concessions, and promoting various funding mechanisms such as fund-of-funds (FOF), corporate venture funds (CVC), and university endowment funds. The inclusion and sustainability task forces focus on curating frameworks to identify startups focused on Sustainable Development Goals, developing capital inflow frameworks, and supporting early-stage climate-tech startups.
India’s efforts within the G20 Startup20 Engagement Group reflect its commitment to fostering innovation, economic growth, and cross-border collaboration in the global startup ecosystem. By proposing a standard framework to define startups and calling for increased investment, India aims to create a supportive environment for startups to thrive and contribute to the economy. The upcoming summit in Gurugram will further advance these objectives and lay the groundwork for a transformative and inclusive startup ecosystem.
