The Indian government is expanding its collaboration with other countries to add further stimulus to its startup ecosystem. Since 2015, Prime Minister Narendra Modi has made several international visits (1). He has incorporated the country’s startups as a critical focus of the bilateral talks with other countries, centering on the central government’s prominent policies and initiatives such as Make in India, Digital India, Skill India, Smart Cities, etc.
In 2019, while addressing the FII, Future Investment Initiative in Riyadh, the capital of Saudi Arabia, Narendra Modi stated that India had become the 3rd largest startup community worldwide. He then invited global investors to benefit from the country’s startup ecosystem (2).
This year, in January, the Startup India International Summit attracted representatives from over 25 countries. It was the most prominent startup confluence the Indian government had organized since the launch of the Startup India initiative, as per a press release from the PMO, Prime Minister’s Office (3). The event was followed by Finland, the Netherlands, Canada, and Sweden, executing many programs to expand their presence in the Indian startup ecosystem in March 2021.
Each of these countries organized events based on their competitive advantages and their values. For instance, the Sweden-India Hackathon (4) was intended to design, test, and execute ideas for the future progression of mobility solutions. Anna Lekvall, the Consul General of Sweden in Mumbai, pointed out the collaborative efforts between the two nations.
‘Innovation is at the heart of the Sweden-India relationship, and startups, especially in sustainable and safe mobility, have grown immensely as an important cooperation area,’ she said.
Apart from collaborations through the short-duration tech programs, the Indian government has also established over a handful of startup hubs (5) to concrete its relations with other countries to solve safety, adequate health care, sustainability, pollution control, and renewable energy sources challenges.
Today let’s talk about some of India’s most prominent International Bridges.
India-Brazil Startup Bridge
It is a joint initiative by the Indian and Brazilian governments, primarily focusing on fintech startups, to foster deeper collaboration between the two countries’ startup ecosystems. The bridge would enable investors, startups, aspiring entrepreneurs, incubators, and corporates of both nations to connect with each other and offer them resources to grow and become international startups.
Since the program initiation, both nations have held over three joint webinars amid the pandemic. These webinars primarily focused on coping with coronavirus pandemic and positive ways to recover the economy with the help of fintech startups. Both nations are also actively working together towards electronic payment universalization, open banking technologies, and collaborative banking (6).
India Finland Tech Hub
The initiative aims at building opportunities to drive the growth of the Indian and Finnish startup ecosystem. Startup ecosystems of both nations have global recognition for their innovations.
While India is the second-largest ecosystem considering the number of startups, Finland’s Helsinki hails as the second-best place for startup employees by the Nestpick Startup Cities Index for startup employees.
The number of global ventures and companies in both nations is constantly growing considering their well-educated workforce, excellent infrastructure, and business-friendly climate. These startup ecosystems disrupt a significant number of industries and enhance them via their innovative products and services (7).
India-UK Startup Launchpad
The startup launchpad initiative between India and the UK aims at building a thriving startup ecosystem together. It is focusing on fostering deeper collaboration between two leading startup ecosystems.
The launchpad would bring together resources, unite participants, and encourage startups in both countries to innovate and find solutions to nearly all constraining development challenges and explore enlargement opportunities. Hence, it aims to become a global force for ‘good’ and driving ‘mutual growth’ and ‘prosperity.’
As a part of the program, six Indian startups present ideas from AI-powered SaaS for rapid diagnosis of drug-resistant tuberculosis to a next-gen light-based AI hardware to over 150 investors at an event organized by EF, Entrepreneur First, a UK-based international talent investor in August 2019.
During the same period, in September 2019, India also organized a free event aimed at supporting UK startups seeking to enter the Indian healthcare space. The India UK Partnership program also organized TechXchange to offer exposure to Indian startups at an international marketplace.
The UK government also expanded its Go Global program to India to offer the country’s most cutting-edge and innovative startups the skills they require to grow their business, build links with the UK market and make way for future economic collaborations (8).
India-Russia Innovation Bridge
The Indo-Russian initiative aims to enable startups, aspiring entrepreneurs, investors, and incubators of nations to connect with each other and offer them resources to grow and become international players.
Together, both nations have rolled out several plans, initiatives, and challenges to promote their startup ecosystems. Two of the most prominent challenges include Startup India Kalyani Edtech Challenge and Startup India MTS Innovation Challenge.
Kalyani Group has invited tech-enabled innovative solutions in the edtech industry for the challenge. The incentives of the challenge include 25k USD cash price to the winner and incubation support to the top three startups.
The Startup India MTS Challenge offers opportunities to startups that have created products and solutions to solve business problems in HR tech, fintech, IoT, B2C digital products, and SaaS for ecommerce with up to 540k INR pilot opportunity with MTS StartUp Hub for three months.
Additionally, both countries have also agreed to collaborate on AI and blockchain projects at St Petersburg Summit, and Russia planned to pour over 50 million USD into India by 2021 end (9).
India-Korea Startup Hub
The India-Korea Startup Hub is a one-stop platform to bring both countries’ startup ecosystems closer and facilitate joint innovation. As a part of a joined statement signed between Invest India and the KOTRA, Korea Trade-Investment Promotion Agency on 9th July 2018. The startup hub would enable collaborations between investors, incubators, aspiring entrepreneurs, and startups of both nations and offer them needed resources for market entry and worldwide expansion.
As a part of the agreement, in early 2019, Ola signed a term sheet with Mirae Asset-Naver Asia Growth Investment to potentially invest in the ride-hailing platform. Additionally, in 2018, Korean investors backed Bengaluru-based mobile gaming startup Mech Mocha Game Studios Pvt Ltd. Mirae Asset also poured capital into BigBasket in 2019.
Last month, both countries also agreed to go for joint production and export of military hardware, enhance intelligence sharing, and boost corporations in cyber and space domains as a part of overall defense and security ties expansion (10).
India Japan Startup Hub
The Startup Hub of India and Japan is an online platform to bridge the gap between two startup ecosystems and enable productive synergies to promote joint innovation. A combined statement signed between the Ministry of Economy, Trade, and Industry of Japan and the Ministry of Commerce and Industry of India on 1st May 2018 conceptualized the hub. The hubs aim at enabling collaborations between investors, startups, incubators, and aspiring entrepreneurs of both economies and offer them needed resources for global expansion.
As of August 2020, more than 50 active investors have invested in more than 105 Indian startups and 12 unicorns over 136 funding deals. Despite the onset of pandemic last year, the NASSCOM, National Association of Software and Service Companies, had organized a virtual pitching session for 20 chosen startups to attract funds from the JVCN, Japanese Venture Capital Network.
Within five years, from 2014 to 2020, SoftBank has invested over 8 billion USD in India. Reportedly, the company is looking to infuse about a total of 10 billion USD by 2024 in different sectors of the Indian market (11).
India Portugal Startup Hub
The Startup Hub of India and Portugal aims to bring startup ecosystems of both economies closer and drive joint innovation. An MoU signed between Invest India and Startup Portugal in February 2020 conceptualized the Indian-Portuguese Hub.
It intends to enable collaborations between investors, incubators, startups, and aspiring entrepreneurs of both nations and offer them the needed resources to enter the market and allow greater global understanding.
Additionally, it would also offer an opportunity to give access to essential resources such as learning and development programs, relevant government schemes information, a forum to brainstorm and discuss, news, and blogs, among others.
It is also worth highlighting that Portugal has one of the highest rates in business creation in Europe and has emerged as among the most vibrant European entrepreneurship ecosystems. Narendra Modi is also the first Indian PM in Portugal for a bilateral visit. It has undoubtedly strengthened the relationship between the two economies (12).
Indo-Dutch #StartUpLink Initiative
The initiative aims to open up the Indian and Netherlands market to Dutch and Indian Startups that are seeking to expand to international markets. In a joint effort with the Netherlands Embassy, Startup India developed the platform to offer access to information, pilot opportunities, relevant networks, and a single contact point for navigating through the Indian and Dutch startup ecosystems.
The platform enables startups to validate their idea with market validation tools, learn more about both economies’ startup ecosystems, and find platforms to contact mentors, founders, investors, incubators, and other enablers from India. It also allows entrepreneurs to explore opportunities to make their first step into launching their startup in a new market.
India offers its booming economy and a fast emerging IT industry also has numerous innovators and entrepreneurs ready to explore the European market. With its international business climate and English-speaking community, Netherlands serves as an exciting gateway for Indian startups to enter the European market. Plus, Dutch’s expertise and technologies in agriculture, cyber, and waste management can support India’s growth sustainably (12).
Sweden India Startup Sambandh Hub
Startup India and Founders Alliance, Sweden developed the SISS Hub to foster and strengthen the connection between the startup ecosystems of both economies.
There are over 180 Swedish companies in India, with some of them already engaging with Indian startups.
In the spirit of Sweden and India joining the declaration on innovation collaboration for a sustainable future, businesses in Sweden are engaging with the Indian startup ecosystems to address the social requirements via open innovation challenges. Swedish companies such as IKEA, Fortum, Volvo, AstraZeneca are launching such innovation challenges.
Despite the demographic differences, there is much potential to be realized between India and Sweden. Both countries are actively working together to support continued increased exchange, including innovation and research between the two economies (13).
India Israel Innovation Bridge
Both countries are looking to address challenges in the healthcare, agriculture, and water sector with the launch of this initiative. It called on early-stage startups, companies, and research teams to submit their solutions for challenges.
The meetings between the PMs of both economies initiated the program. Following the program, the Israeli government had decided to invest 240 million shekels, equivalent to about 73 million USD by 2020, to promote its relations with India in the area of innovation and technology (14).
India Singapore Entrepreneurship Bridge
The then Honorable External Affairs Minister of India, Late Sushma Swaraj, launched the India Singapore Entrepreneurship bridge in January 2018 at the ASEAN, India Pravasi Bhartiya Divas Conference. The initiative enables startups, aspiring entrepreneurs, investors, and incubators of both nations to connect with each other and offer them resources to expand and become international players.
In collaboration with Indian government agencies and Singapore, the Chamber of Commerce, innovation labs, and the Chamber of Commerce, the High Commission of India also organized a two-day Business and Innovation summit in September 2019 in Singapore.
Over the past years, Indian companies have set their manufacturing and service operations in Singapore. Several Indian businesses have also based their regional headquarters for the Asia Pacific regional operation in Singapore, considering their robust air connectivity. The country has emerged as a critical offshore hub for Indian businesses (15).
India’s Achilles Heel
Even though with these bridges, stakeholders from the Indian Startup ecosystem and other collaborated nations have access to concise and transparent information about each other’s startup ecosystems at the tip of their fingers, it has proved to be the country’s Achilles heel in the last few years (16).
India is incentivizing joint ventures, inspiring entrepreneurs, and attracting investors from other countries to make investments in the Indian startup ecosystem. And by diversifying its stakeholders, India is shielding vulnerable small enterprises from changes in its foreign affairs.
Last year, funds from China fell by 66% (17) because of the changes in Indian FDI policy, following the clashes between the two nations on the Doklam Plateau. Investors from these non-Chinese regions stepped up to fill the gap, which enabled Indian startups to secure a respectable 9.3 billion USD compared to the previous year’s 14.5 billion USD in 2019.
Apart from proving to be vital capital sources, these investments are also solving challenges faced in collaborating nations’ home turf. For example, one of the hub nations, Japan, has been witnessing limited demand for seed funding with a preference for IPOs, Initial Public Offerings, over late-stage funding, a shrinking consumer demand, aging demographic, fewer number startups, and small funding deal numbers.
As India has all of these factors in more abundance, as per the report by DataLabs (18) in Japanese investors, participation in funding rounds of Indian startups have more than doubled, And Softbank has emerged as the most prominent investor from Nippon, after investing more than 10 billion USD in the Indian Startup ecosystem.
To seek and execute due diligence of these viable startup targets, nations; embassies, and business associations like the JETRO, Japan External Trade Organization, Sweden Business, Finland Business, CIBC, Canada Business Council, USIBC, US-India Business Council are executing the groundworks for policy arrangements with the Indian government. They are carrying out march making between ventures and investors on both sides and playing as a bridge for Indian founders to extend their ventures abroad.
Additionally, the Indian state machinery is also working closely with these intermediaries for the transfer of overseas technologies in heavily regulated beachhead markets. At the USICB organized event, Lockheed Martin’s India CEO, William Blair, reiterated the importance of fledgling companies. He stated that (19) startups are the health of growth in the Indian market. And mobilizing these startups to accelerate their tech can help India leap ahead.
The Indian startup ecosystem has realized its potential as the critical piece in its foreign policy jigsaw puzzle with other nations in 2021. The Indian government is currently performing a delicate balance act between all the stakeholders to keep the momentum. While transforming these international policy collaborations into concrete structures from mere announcements on paper, the state is also effectively addressing challenges (20) in sections within the entrepreneurial community who see the foreign capital as a threat to their ownership, which would be transferred abroad and bypass Indian regulation and taxes,
The Indian government aims to enable local players to profit from higher-ranked innovative partner nations and build a crucial momentum for India to be among the top 20 startup countries across the globe in the upcoming months.