Government to expand the definition of start-ups

The Centre is likely to expand the definition of start-ups in a move that is expected to give a boost to these firms and entrepreneurs.

According to sources, the definition of start-ups would be expanded to include deeptech firms and cooperatives. Start-ups would also be permitted to pivot to deeptechs and a financial incentive may also be provided for this, an official source said.

The move is expected to help boost innovation and fuel more business models amongst India’s start-up community and give a boost to AI and tech related activities in the country as well as help in further job creation.

At present, for an entity to be recognised as a start-up by the Department for Promotion of Industry and Internal Trade, it has to have been incorporated or registered within a period of 10 years. Further, it has to be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India and its turnover for any of the financial years since incorporation or registration should not be over Rs 100 crore. The entity should be working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation. An entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Start-up’.

The Centre had launched the Start-up India Mission in 2016, which aims to provide ideation, funding, mentorship, and scale-up to these entities. Since then, India has emerged as the world’s third-largest start-up ecosystem.

There are over 2 lakh DPIIT-recognised start-ups as of December 2025, which have together generated nearly 22 lakh jobs. Around 50% of DPIIT-recognised start-ups originate from Tier-II and Tier-III cities, signalling the democratisation of entrepreneurship