Telangana retains premier position in startup rankings; funding, capacity-building ecosystem major drivers

During FY23, Telangana contributed around 4.5% of India’s GDP; more than 550 startups received incubation support and over ₹5 crore was disbursed among 100+ startups between August 2021 and December 2022

Updated - January 16, 2024 09:18 pm IST

Published - January 16, 2024 08:54 pm IST - HYDERABAD

The startup community in Telangana is expected to use T-Works in Hyderabad as a platform to launch next-generation products.

The startup community in Telangana is expected to use T-Works in Hyderabad as a platform to launch next-generation products. | Photo Credit: File photo


Telangana, along with six other states, has maintained its position as a top performer in developing startup ecosystems for budding entrepreneurs, according to the ranking of states and union territories by the Department for Promotion of Industry and Internal Trade (DPIIT), Government of India.

Others ranked as top performers include Maharashtra, Odisha, Punjab, Rajasthan, Arunachal Pradesh and Meghalaya. The rankings for 2022 were released by Commerce and Industry Minister Piyush Goyal.

Gujarat, Kerala and Karnataka have been ranked the best states in developing startup ecosystems, followed by Tamil Nadu and Himachal Pradesh.

During 2022-23 financial year, Telangana, India’s 11th largest State, contributed approximately 4.5% of the country’s Gross Domestic Product. The State’s strategic geographical location, diverse business demographics and well-connected transportation infrastructure make it a key transit hub for goods and services, facilitating Interstate trade and commerce, the State report by the Ministry of Commerce and Industry showed.

The State saw over 1,800 registered startups and over 80 incubators functioning under the Startups Ranking Framework 2022. More than 550 startups received incubation support and over ₹5 crore was disbursed to 100+ startups during the period of the survey. Overall, Telangana has a total of 6,145 startups registered with the DPIIT since 2016. The total number of startups in the State could be pegged at above 10,000.

Among the seven parameters of evaluation, Telangana emerged 100th percentile in two areas—  funding support and capacity building of entrepreneurs. It scored 94th percentile in offering institutional support to startups; 86th in fostering innovation and entrepreneurship; 69th in incubation and mentorship support; 64th in market-access creation; and 50th in roadmap to sustainability.

Speaking to The Hindu, Chief Innovation Officer for Telangana Shanta Thoutham said increased efforts in infrastructure development alongside incubation support and inclusive approach under the Telangana Innovation Policy 2016 was key to fostering the growth of startup ecosystem and culture in the State.

Since the advent of T Hub, the ecosystem has seen multifold rise in startups across spaces, especially manufacturing and innovation in deep tech areas. With the design space T Works, the startup community is expected to use this as a platform to launch next-generation products, which will be the face of India from Hyderabad, said Darsh Golechha, founder of LegacyNext, a Hyderabad-based inheritance planning platform.

Key areas of focus for the State include emerging technologies, sustainability, climate change (and climate tech) and renewable energies.

Telangana offers top quality infrastructure, tech-ecosystem and unmatched government support. This has helped foster a virtuous cycle and enabled the creation of a talent and resource corridor between Cyberabad and the Silicon Valley, said Aman Singh, Founder of GradRight, a Hyderabad- based education fintech startup.

It is no surprise that many new companies being built by Telangana entrepreneurs have a base both in the U.S.A. and Hyderabad, offering the next generation of tech-solutions for both India and global markets, underscored Mr. Singh.

Powered by new-age companies and start-ups, Telangana will emerge as the new commercial capital of India and South East Asia. China’s loss in investment and venture capital could become the gain of Hyderabad and the rest of India to fuel this new phase of growth, he added.

As of now, most registered startups are based out of Hyderabad. Going forward, however, the State would see the startup ecosystem being dominated by tier-2 and tier-3 cities in the State. “We have a strong nexus of grassroots and rural innovation,” said Ms. Thoutam, highlighting the need to build more Information Technology towers, akin to those in cities such as Mahbubnagar, Warangal, Nizamabad and Karimnagar, in the hinterland as well.

Launched in 2018, the DPIIT startup rankings evaluate the efforts of states and union territories in building startup ecosystems. The evaluation period for the 2022 ranking spanned from August 2021 to December 2022.

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