Angel tax removal boosts Indian startup ecosystem

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Startups are coming back to India after the removal of the angel tax, highlighting positive shifts in the business landscape, said Amardeep Singh Bhatia, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT).

The DPIIT is working to enhance capital inflow through various efforts, including collaborations with international partners and funding schemes to support the startup ecosystem.

In July 2024, Finance Minister Nirmala Sitharaman abolished the ‘angel tax’ to bolster entrepreneurial spirit and support innovation as she presented the Budget 2024-2025 in Parliament. The angel tax treated investments received by startups from external investors as ‘income from other sources’ and levied a 30% taxation on them. Often short of funds, startups tend to lose money as angel tax would require them to share a significant part of the investment towards paying taxes.

The DPIIT is actively boosting capital flow with several initiatives, such as partnerships with foreign organizations and funding programs to bolster the startup ecosystem. Additionally, local startups have generated more than 1.6 million jobs, with the DPIIT officially recognizing 157,000 startups as of December 25. 

The South Asian powerhouse boasts over 73,000 startups with at least one female director. Driven by affordable Internet access and a youthful workforce, India’s thriving ecosystem has produced over 100 unicorns and played a crucial role in shaping global innovation.

9 years of Startup India initiative

On January 16, 2025, India celebrated nine years of Startup India. Designated as National Startup Day, this occasion celebrates the country’s strides in fostering a robust and inclusive entrepreneurial ecosystem. 

“Startups in fintech, edtech, health-tech, and e-commerce have tackled local challenges and gained global recognition. Companies like Zomato, Nykaa, and Ola showcase India’s shift from job seekers to job creators, driving economic progress,” the Ministry of Commerce & Industry said in a statement. 

India has firmly established itself as the third-largest startup ecosystem in the world. This vibrant ecosystem, driven by over 100 unicorns, continues to redefine innovation and entrepreneurship on the global stage.

Through the Startup India initiative, the DPIIT has executed various projects and undertaken recurring models to propel the local startup ecosystem. Qualifying companies can gain recognition as startups by DPIIT and avail of benefits such as tax exemptions, simplified compliance, and expedited IPR processes.

“StartUp India has given wings to the aspirations of so many youngsters,” Prime Minister Narendra Modi said in January 2025, marking the ninth anniversary of the Startup India initiative. 

“The good news is: small towns are increasingly becoming startup centres. Equally glad to see women take the lead in so many startups,” Modi said. “Sectors like waste management, non-renewable energy, biotechnology, and logistics are witnessing the maximum number of startups.”

The government has also urged startups to use ‘Entity Locker,’ which allows startups to securely store and access vital business documents anytime, reducing dependency on physical files.

The National eGovernance Division (NeGD), under the Ministry of Electronics and Information Technology (MeitY) has developed Entity Locker, a cutting-edge digital platform designed to transform the management and verification of business/organization documents.

Entity Locker is a secure, cloud-based platform that simplifies document storage, sharing, and verification for various entities, including startups, small and medium businesses, and trusts. It supports India’s Digital Public Infrastructure goals and the Union Budget 2024-25 vision for improved digital governance. The platform integrates with government systems and offers real-time document access and verification, consent-based secure information sharing, 10 GB encrypted cloud storage, as well as legally valid digital signatures. 

As part of the Digital India program, Entity Locker showcases how technology can be used innovatively to address complex administrative challenges and drive economic growth.

NetraDyne first unicorn of 2025

NetraDyne, a provider of logistics artificial intelligence (AI) solutions, has become the first unicorn of 2025 in India’s startup ecosystem after securing $90 million in its Series D funding round, led by its existing investor, Point72 Private Investments. Avneesh Agrawal, cofounder and chief executive of NetraDyne, said that the funding round pushed the startup’s post-money valuation to $1.34 billion.

Netradyne is focused on AI-powered fleet safety and video telematics solutions. 

“The successful completion of our Series D funding round is a significant milestone for Netradyne and a testament to the confidence our investors have in our vision and innovative approach to AI-powered fleet safety solutions,” Agrawal said in a statement. 

“This funding provides us with the resources to accelerate growth, expand our technology capabilities, and deliver even greater value to our customers worldwide,” Agrawal added.

Prior to this, Netradyne raised $65 million in 2022 from Silicon Valley Bank through a combination of debt and equity, with a valuation of just under $1 billion. With the latest funding round included, the company has secured a total of $317 million across four funding rounds from investors such as Reliance, M12, SoftBank (NASDAQ: SFTBF), Qualcomm Ventures, and Pavilion Capital, among others.

Founded in 2015, Netradyne now serves over 3,000 customers and 450,000 active subscribers across the United States, Canada, Mexico, Germany, the United Kingdom, Australia, New Zealand, and India, with plans to expand into Europe and Japan. Its clients include major players in retail, food, oil and gas, transportation, utilities, field services, transit, and construction.

Walmart initiative with startups

Global retailer, Walmart (NASDAQ: WMT), has announced trials with three India-based startups to explore solutions for its U.S. supply chain and sourcing operations. The startups—Pune’s KBCols Sciences, Chennai’s GreenPod Labs, and Bengaluru’s Cropin—were selected following their participation in Walmart’s Growth Summit last year.

These pilot programs aim to improve product availability, reduce waste, and develop sustainable alternatives for manufacturing processes, such as replacing synthetic textile dyes to lower environmental impact.

Cropin, a Bengaluru-based AgTech platform, provides AI-driven insights on crop yields, productivity, resource optimization, and consistent harvest quality. The pilot will test this technology on produce supply chains, potentially improving the efficiency of sourcing perishable goods, enhancing data accuracy, and reducing waste. This initiative, part of Walmart Global Tech’s Sparkubate program, will help startups scale their solutions to address key retail challenges.

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