Entrepreneurship Beyond Tier 1 Cities

The State and Central Governments are both working towards reducing and ending regional differences in the startup hub.


The Indian entrepreneurial landscape has metamorphosed into the third largest startup ecosystem with more than 40,000 recognized startups that generate employment and instil self-reliance. However, this role has been limited within the Tier 1 cities. Startup India’s role has been vital in nurturing entrepreneurship beyond Tier 1 cities. Metropolitan cities like Bengaluru and Delhi-NCR continue to be the hub of start-ups and quantum of investments. The industry needs to expand into smaller cities to increase opportunities across the country and for better growth of ideas and technologies. This would also bridge the gap between consumers and producers making the market place more digital and convenient. The State and Central Governments are both working towards reducing and ending regional differences in the startup hub.

How Startup India Campaign Reduces Regional Disparity beyond Tier 1 Cities

The Startup India campaign has helped in reducing such regional disparities with recognized startups spreading across 586 districts creating more than 4.2 lakh jobs. With several relaxed laws, infrastructural and monetary incentives and technology and patent-based support, several entrepreneurs are benefitting from starting their ventures. To induce ventures and investment in non-Tier 1 cities, the Startup India Scheme has come up with several solutions:

  • An INR 10294.27 crore Startup Fund of Funds has been launched by the Ministry of Commerce and Industry to promote the availability of risk capital in the Indian economy. 
  • Startup India has facilitated procurement from startups on the Government E-Marketplace (GeM) portal, where around 7438 startups have serviced orders worth over INR 1800 crores.
  • To connect the Indian Startup ecosystem with the Global ecosystem, engagement models with 11 countries including Korea, UK, Netherlands, Sweden and Portugal have been built.
  • A new initiative called the StartupYatra was launched in 2017 to promote entrepreneurship in rural and non-metro regions and tap into the grass-root level of the states.
  • Department of Promotion of Industry and Internal Trade launched States’ Startup Ranking Framework to observe key actions undertaken by various States to improve the Startup landscape and keep in check initiatives by States to make India a thriving Startup nation. This also takes into account intra and interstate regional disparities and the actions taken by the States to bridge this gap. 
  • The Atal Innovation Mission (AIM) has selected 102 incubators across the country to provide financial support, with grants worth INR 201.1 crores being disbursed to 68 incubators. This has helped incubate over 1,250 startups creating over 13,800 jobs.
  • Atal Tinkering Labs (ATL) to encourage entrepreneurship in school students where over 14,000 schools with 5068 ATLs have received INR 12 lakhs grants. This inculcates the spirit of entrepreneurship at very young ages and promotes innovations.

What is in it for you?

These actions taken by Startup India have tried to trickle down the startup momentum from only Tier 1 cities in the past to other cities, districts and rural areas now. Through each segment of the initiative, a culture of innovation and entrepreneurship has been instilled in the citizens,  right from school children to successful entrepreneurs. As an aspiring or existing entrepreneur, you should know about the Startup India Initiative along with the State policies and laws for Startups. In the current Startup status-quo, there are a lot of incentives and relaxed laws that you can tap into when looking for locations and regions for your venture. It is not necessary to be headquartered and established in a Tier 1 company. Today, you can easily startup in any area with a flair for entrepreneurship along with optimal incentives and become a part of the Indian Startup Ecosystem with a huge potential for success.

Smruthi Krishnan
Smruthi Krishnan
Smruthi interviews and writes on inspiring entrepreneurs and the success stories of start-ups. She is currently pursuing Economics major from Delhi University.

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