Enabling Startups to Thrive: How E-Commerce and Policy Support Are Powering India’s Economic Future

India has emerged as the world's fastest-growing digital economy. Over the past decade, a new India has taken shape, fueled by innovation and unafraid to embrace bold risks. With a thriving ecosystem of over 1.5 lakh startups, India stands as the third-largest startup hub globally. Driven by initiatives like Startup India, the country now boasts over 100 unicorns, with their numbers projected to grow more than 2.6x in the next five years.

The Startup India initiative, driven by DPIIT, has played a pivotal role in fostering an inclusive entrepreneurial ecosystem. By providing financial support, simplifying regulations, and enhancing infrastructure, these programs have empowered startups to embrace digitalization and scale their operations. Startups across sectors have experienced significant growth, driven by the evolution of digital markets and e-commerce. This transformation has created a level playing field, expanded job opportunities, and reduced the cost of doing business. Startups are also bringing new aspirations and livelihoods to rural communities by offering marketing avenues for local artisans, craftsmen, and women entrepreneurs.

Startups are the powerhouse of innovation and growth, holding the key to unlocking the next phase of economic development. With initiatives supporting over 64 million MSMEs and startups combined, employing millions and contributing significantly to GDP, this sector’s influence on India’s trade and economy is undeniable. The rapid rise of eCommerce, coupled with policy support, has opened unprecedented opportunities for startups to transcend geographical limitations and cater to a broader audience.

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Startups Digital March

Startups’ Digital March A transformative shift in digital connectivity has empowered entrepreneurs from the remotest corners of the country to thrive. Affordable smartphones, low-cost data, and government initiatives like Digital India have paved the way for startups to access new markets, both domestically and internationally. This digital revolution has enabled startups to leverage the growing eCommerce ecosystem, unlocking opportunities to build, scale, and grow their online businesses seamlessly.

Startups are focusing on innovation and digitization of operational procedures. Adopting new tools and systems helps them to compete on the global stage. Programs such as the Digital MSME Scheme empower enterprises registered with the Udyam portal to adopt Information Communication Technology (ICT) tools and help startups and small businesses transition seamlessly from traditional to digital processes.

Huge Target Addressable Market

India's domestic eCommerce market is projected to reach $300 billion by FY30, with cross-border commerce expected to grow to $70 billion and offline retail expanding to $300 billion, collectively creating a $670 billion market opportunity.

Inspiring success stories from across the country showcase how startups are transforming India’s trade landscape. From Jaipur-based jewelry brands gaining global recognition to Kerala’s spice.

producers catering to international gourmet kitchens, startups are redefining India’s presence in global commerce.

This surge in digital entrepreneurship isn’t just about growth; it’s about reshaping global economic participation and empowering even the smallest players to make a significant impact. A recent survey revealed that 83% of Indian small businesses and startups began selling online within the last five years, with 65% generating at least half of their revenue from online sales.

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Policy Impetus

Government-led initiatives such as Startup India, Atal Innovation Mission (AIM), Startup India Seed Fund Scheme (SISFS), and Pradhan Mantri Mudra Yojana (PMMY) have been pivotal in fostering a more inclusive entrepreneurial ecosystem. By providing financial support, simplifying regulations, and enhancing infrastructure, these programs have enabled startups to embrace digital transformation and scale their operations.

Simplified cross-border trade regulations, reliable payment gateways, and improved logistics infrastructure have further empowered startups to access global markets, significantly boosting India's exports.

While the government’s efforts have laid a strong foundation, the next leap forward will require sustained collaboration between policymakers and the private sector. With the potential for a 2.6x increase in startups by 2030, it is imperative to build an ecosystem where businesses not only participate but actively drive economic growth. By working together, we can ensure that the benefits of digital transformation extend to every corner of the country, creating a truly inclusive and thriving economy.

Challenges Galore

Entrepreneurs in India continue to face significant challenges throughout the buyer journey due to a fragmented and disorganized ecosystem. Limited access to tech-enabled platforms, formal credit, audience and campaign optimization tools, and actionable sales insights has constrained the growth of direct commerce. To level the playing field, startups need a seamlessly integrated suite of solutions that empowers them to compete with eCommerce giants.

Realizing the vision of transforming India into a $300 billion eCommerce market by 2030 will require the sustained empowerment of startups. This includes leveraging technology, developing robust infrastructure, and ensuring consistent policy support to drive innovation and scalability.

Streamlining regulatory processes will be pivotal in enabling every Indian entrepreneur, particularly startups, to actively contribute to the nation’s economic growth and participate in its digital transformation journey.

The author is MD & CEO at Shiprocket.