India Expands Startup Definition: Companies with Turnover Up to ₹200 Crore Now Eligible

New Delhi: The Indian government has significantly broadened the definition of startups, allowing companies with a turnover of up to ₹200 crore to qualify as startups. Previously, the limit was ₹100 crore. Additionally, a new category for Deep Tech Startups has been introduced, targeting companies working on highly innovative, research-driven technologies.

This move aims to give a fresh impetus to India’s startup ecosystem, especially in sectors like Deep Tech, manufacturing, and R&D, where companies often require more time and capital before generating revenue. So far, around two lakh companies have been recognized as startups under the Startup India initiative, which offers benefits such as income tax exemptions and other incentives.

Key Changes in Startup Rules:
The Department for Promotion of Industry and Internal Trade (DPIIT) issued a notification revising startup recognition criteria:

• The turnover limit for standard startups has been raised from ₹100 crore to ₹200 crore.
• Deep Tech Startups can now be recognized for up to 20 years after incorporation (previously 10 years) and can have a turnover of up to ₹300 crore. This change addresses the long-term nature and high R&D costs of Deep Tech ventures.

Cooperatives Can Now Be Startups:
For the first time, certain cooperative societies can also qualify as startups, promoting grassroots innovation. Eligible cooperatives include:

• Multi-State Cooperative Societies registered under the Multi-State Cooperative Societies Act, 2002.
• Cooperatives registered under State or Union Territory Cooperative Acts.

This step is expected to encourage innovation in agriculture, rural industries, and community-based enterprises.

Why the Rules Were Revised:
The government stated that over the past decade, the Indian startup ecosystem has evolved significantly. Many innovation-driven companies exceed previous age or turnover limits while still being in development or testing phases. The revised rules aim to provide startup-specific benefits at different stages of business growth, ensuring that companies engaged in research and development continue to receive necessary support.