Indian startups would be crucial to the country’s rise to the third-largest economy, according to chief economic advisor Nageswaran

On Sunday, Chief Economic Advisor (CEA) V Anantha Nageswaran stated that startups will be crucial to India’s ascent to the third rank in the world’s economies. According to source, he stated that Thiruvananthapuram and other tier 2 and tier 3 cities in India have been instrumental in fostering the growth of startups in the country.

In his Huddle Global 2023 Leadership Talk, Nageswaran predicted that India’s GDP would rise to the third rank in a few years. He predicted that if the nation continues on its current economic track, it will have a $7 trillion economy by 2030, with startup entrepreneurs playing a significant role. The CEA asserts that income, efficiency, and economic returns will continue to be produced by startups actively engaged in creating business models built upon the base of growing physical and digital infrastructure.

According to Nageswaran, India’s startup scene has seen remarkable development during the past ten years. The Department for Promotion of Industry and Internal Trade (DPIIT) currently recognizes more than 1.12 lakh startups in 763 districts. Of these, around 110 are unicorns, valued at approximately $350 billion in total.

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He continued by saying that innovation in India was not confined to any one industry. 56 different economic sectors are represented among the companies that are tackling problems: 13% come from IT services, 9% are from the health sector, 7% are from education, 5% are from agriculture, and 5% are from food and beverage.

“Tier 2, 3 cities account for 49% of startups”

The CEA noted that it was noteworthy that 49% of the companies were from tier-2 and tier-3 cities, which have since changed the game because of their business advantages over tier-1 cities, which allow entrepreneurs to operate at lower prices.

“Apart from improved infrastructure and the government’s pro-active policies, the availability of a technically skilled talent pool is a huge advantage for startups to set up and flourish in tier-2 and tier-3 cities,” Nageswaran said.

According to the CEA, there used to be a belief that small towns were unsuitable for conducting business. However, he noted, this is no longer the case because of increased internet penetration, enhanced physical infrastructure, road, rail, and air connectivity, as well as helpful government policies.