Lok Sabha Question No. 2975 (UNSTARRED), answered on 2026-03-10
Subject: Startup Closures in India
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri G Kumar Naik

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

UNSTARRED QUESTION NO. 2975.

TO BE ANSWERED ON TUESDAY, THE 10 TH  MARCH, 2026.

## STARTUP CLOSURES IN INDIA

## 2975.  SHRI G KUMAR NAIK:

## Will the Minister of COMMERCE AND INDUSTRY be pleased to state: वाणिज्य एवं उद्योग मंत्री

- (a) the number of startups that have ceased operations or been officially closed down during each of the last five years, year-wise, including the details of the sectors most affected;
- (b) the reasons for the closure of these startups, categorised broadly under factors such as funding constraints, regulatory challenges, market contraction, failure to scale, technology or talent gaps and any other major causes identified; and
- (c) the steps being taken or proposed to be taken by the Government to address the key challenges leading to startup closures, including measures to improve access  to  capital,  implementing  anti-competitive  activities  and  ecosystem interventions to sustain entrepreneurship and innovation?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री णिणिन प्रसाद ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI JITIN PRASADA)

- (a): As  on  31st  January 2026, a total of 2,12,283 entities have been recognised as startups by the Department for Promotion of Industry and Internal Trade.  6,789 recognised startups are categorized as closed (i.e., dissolved/struck-off), as per the Ministry of Corporate Affairs (MCA). The industry-wise number of entities which are categorized as closed (i.e., dissolved/struck-off) are placed as Annexure-I.
- (b): Startup closures that occur are generally influenced by factors such as the viability of  the  business  model,  alignment  with  market  demands,  domestic  and  global economic conditions, the nature of products and services developed, the ability to attract funding, and other business specific considerations.
- (c): To ensure the sustainability and growth of startups, the Government unveiled an action  plan  for  startups  comprising  of  schemes  and  incentives  which  include measures  to  improve  access  to  capital  along  with  ecosystem  interventions  to sustain entrepreneurship and innovation. The Action Plan comprises of 19 action

items spanning across areas such as 'Simplification and handholding', 'Funding support and incentives' and 'Industry-academia partnership and incubation'.

The flagship Schemes namely, Fund of Funds for Startups (FFS), Startup India Seed Fund Scheme (SISFS) and Credit Guarantee Scheme for Startups (CGSS) support startups at various stages of their business cycle. The Government also implements periodic exercises and programs including States' Startup Ranking, National Startup Awards, and Innovation Week which play an important role in the holistic development of the startup ecosystem. Government also encourages and support ecosystem led initiatives as Startup Mahakumbh which serve as a vibrant platform for stakeholders to network and collaborate. Initiatives to improve market access and enable public procurement also support startups in growing and scaling up their businesses have also been undertaken. The Government has also taken various  measures  to  enhance  ease  of  doing  business  including  starting  up  of business, raising capital, and reducing compliance burden to simplify the regulatory environment and create a conducive business environment.

As per the Competition Commission of India (CCI), the Competition Act, 2002 ('the Act') was enacted to prevent practices having adverse effects on competition, to promote and sustain competition in markets, to protect interests of consumers and to ensure freedom of trade carried on by other participants in markets. The Act prohibits  anti-competitive  agreements  (Section  3),  abuse  of  dominant  position (Section  4)  and  provides  for  regulation  of  combinations  i.e.,  mergers  and acquisitions (Sections 5 & 6).

The Competition Commission of India (CCI) has been established under the Act to enforce these provisions  and empowers CCI to issue appropriate remedies for such anti-competitive behaviour. Since its inception, CCI has been enforcing the Act and promoting fair competition in the markets. It has issued various decisions and  orders  against  firms  that  have  violated  the  provisions  of  the  Act  and  has imposed penalties and directed remedies in case of anti-competitive conduct.

The Government, through the Competition (Amendment) Act, 2023, introduced a specific  provision  relating  to  deal  value  threshold  to  capture  transactions  not meeting the asset and turnover thresholds. With this enabling provision, all Merger & Acquisition  (M&A) transactions  involving  smaller  companies/  enterprises  with deal  value  exceeding  Rs.  2000  crore  and  where  the  Target  enterprise  (i.e. enterprise being acquired) is having substantial business operations in India, will be  notified  to  the  Competition  Commission  of  India  (CCI).  This  will  provide  an opportunity  to  CCI  to  address  likely  harm  to  competition  (Appreciable  Adverse Effect on Competition) due to such transactions.

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## ANNEXURE-I

## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (a)  OF  THE  LOK  SABHA UNSTARRED QUESTION NO. 2975 FOR ANSWER ON 10.03.2026.

The industry-wise number of entities which have been recognised as startups by DPIIT categorized as closed (i.e., dissolved/struck-off) as per the Ministry of Corporate Affairs (MCA) are as under:

| Industry                            |   Number of entities recognised as startups categorized as closed (i.e., dissolved/struck-off) |
|-------------------------------------|------------------------------------------------------------------------------------------------|
| Advertising                         |                                                                                             60 |
| Aeronautics Aerospace & Defence     |                                                                                             45 |
| Agriculture                         |                                                                                            301 |
| AI                                  |                                                                                            156 |
| Analytics                           |                                                                                             51 |
| Animation                           |                                                                                              3 |
| AR VR (Augmented + Virtual Reality) |                                                                                             51 |
| Architecture Interior Design        |                                                                                             37 |
| Art & Photography                   |                                                                                             21 |
| Automotive                          |                                                                                            125 |
| Biotechnology                       |                                                                                             10 |
| Chemicals                           |                                                                                             25 |
| Computer Vision                     |                                                                                             24 |
| Construction                        |                                                                                            167 |
| Dating Matrimonial                  |                                                                                             10 |
| Design                              |                                                                                             46 |
| Education                           |                                                                                            491 |
| Enterprise Software                 |                                                                                            158 |
| Events                              |                                                                                             47 |
| Fashion                             |                                                                                            111 |
| Finance Technology                  |                                                                                            203 |
| Food & Beverages                    |                                                                                            320 |
| Green Technology                    |                                                                                            142 |
| Healthcare & Lifesciences           |                                                                                            553 |
| House-Hold Services                 |                                                                                             61 |
| Human Resources                     |                                                                                            119 |
| Indic Language Startups             |                                                                                             32 |
| Internet of Things                  |                                                                                            132 |
| IT Services                         |                                                                                            875 |
| Logistics                           |                                                                                             26 |
| Marketing                           |                                                                                            152 |
| Media & Entertainment               |                                                                                            129 |
| Nanotechnology                      |                                                                                             11 |
| Non- Renewable Energy               |                                                                                            188 |
| Other Specialty Retailers           |                                                                                             37 |

| Industry                           | Number of entities recognised as startups categorized as closed (i.e., dissolved/struck-off)   |
|------------------------------------|------------------------------------------------------------------------------------------------|
| Others                             | 305                                                                                            |
| Passenger Experience               | 1                                                                                              |
| Pets & Animals                     | 21                                                                                             |
| Professional & Commercial Services | 262                                                                                            |
| Real Estate                        | 59                                                                                             |
| Renewable Energy                   | 138                                                                                            |
| Retail                             | 212                                                                                            |
| Robotics                           | 43                                                                                             |
| Safety                             | 18                                                                                             |
| Security Solutions                 | 44                                                                                             |
| Social Impact                      | 51                                                                                             |
| Social Network                     | 83                                                                                             |
| Sports                             | 32                                                                                             |
| Technology Hardware                | 166                                                                                            |
| Telecommunication & Networking     | 57                                                                                             |
| Textiles & Apparel                 | 90                                                                                             |
| Toys and Games                     | 10                                                                                             |
| Transportation & Storage           | 123                                                                                            |
| Travel & Tourism                   | 127                                                                                            |
| Waste Management                   | 28                                                                                             |
| Total                              | 6,789                                                                                          |

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