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Commerce and Industry Minister Piyush Goyal has urged the National Startup Advisory Council (NSAC) to focus on Tier-2 and 3 cities for venture capital (VC) funding, capacity building and creating awareness about government schemes that promote startups in such areas.

“He urged them (council members) to focus on Tier-2 and 3 cities where limited VC funding is available,” the commerce ministry said in a statement. 

The council deliberated upon matters related to the startup ecosystem including protecting ownership of startups with original promoters, incorporating in India, listing in India, developing innovation hubs among others, it said.

While chairing the fourth meeting of NSAC, the minister also launched NavIC Grand Challenge which aims at promoting adoption of NavIC as a geo-positioning solution for digital Aatmanirbharta.

NSAC was constituted by the DPIIT to advise the government on measures needed to build a strong ecosystem for nurturing innovation and startups in the country.

The meeting was attended by key stakeholders, officials and existing startups in the country. Some of them included Manoj Kohli, country head, SoftBank India; Abhiraj Bhal, cofounder, Urban Company; Kunal Bahl, cofounder and CEO, Snapdeal; Sanjeev Bikhchandani, founder and executive vice chairman, Info Edge; Lizzie Chapman, cofounder and CEO, Zest Money, and Rajan Anandan, managing director, Sequoia Capital India. 

The minister shared similar sentiments on April 28, urging founders in India to incorporate and list their startups in India, and not move to tax havens. He was speaking at the Confederation of Indian Industries’ Global Unicorn Summit 2022.

Goyal said, “A little tougher ask probably. But I would once again urge all of you to incorporate in India and list in India. If you have an issue or problem, please tell us about it. We will…make every effort to resolve them.”

Many Indian startups prefer to be incorporated outside India in countries such as Singapore for a host of reasons, including lower corporate tax rates and lower tax on dividend income. 

Ecommerce giant Flipkart, mobile advertising platform InMobi and SaaS startup Capillary Technologies, B2B ecommerce startup Zilingo are among the big names incorporated and headquartered in Singapore.

The minister said the Indian startup ecosystem looks set to achieve the mark of 1,000 unicorns by 2030. 

Meanwhile, India became home to 100 unicorns earlier in May, when neobanking startup Open raised $50 Mn to claim the position of India’s 100th unicorn.