Government Highlights GIFT City As Funding Destination For Startups

The government wants startup founders to look at alternatives for raising resources, including the GIFT City, a senior official said on Tuesday.

Till now, founders in the world's third largest startup ecosystem have 'largely relied' on venture capital (VC) funds from abroad to fuel their growth till now, Rajesh Kumar Singh, the secretary of the Department of Promotion of Industry and Internal Trade (DPIIT) said at an event organised by venture capital industry lobby Indian Venture and Alternate Capital Association (IVCA) here.

'So far, the startup founders have largely used VC from abroad for funding. The government would prefer that they use other avenues for funding including the offshore financing framework that we set up in GIFT City,' he said.

Without elaborating much, Singh said that the government is mulling to liberalise rules governing access of public markets for startups.

'You will see some good action there, hopefully right after elections,' he added.

He said the meeting between fintechs and Finance Minister Nirmala Sitharaman amid 'some turmoil' in the industry was very constructive.

Sitharaman reassured the startups by promising them to have monthly meetings between them and RBI for regulatory clarity, Singh said.

The finance minister has also assured to reduce the turnaround time for clearing patent applications, he said.

He said the Open Network for Digital Commerce (ONDC) transactions have grown to over 6 lakh a month now from a few thousand a year ago.

More importantly, the number of retail transactions has also grown on the network, he said, adding that the split is almost even between mobility and retail now.

At present, 43% of startups have a woman director on their boards or in leadership roles.

Singh said the government would want enterprises in agriculture and energy transition and climate technologies, to succeed going ahead.

He also said that there is a thought to open up PM Gatishakti for private sector to execute their infrastructure projects in a 'sanitised way'.

Meanwhile, Shaurya Doval, the director of India Foundation, who also spoke at the same event, said that there is no place in the world that could offer a better investment option than India. PTI AA SGC MR