In a remarkable shift that’s reshaping India’s startup ecosystem, Union Minister Jitendra Singh revealed that over 50 percent of the more than 200,000 recognized startups in the country now hail from Tier 2 and Tier 3 cities. This announcement underscores the democratization of entrepreneurship beyond the traditional metros like Mumbai, Delhi, and Bengaluru.
Speaking at a recent event, Singh highlighted how government initiatives such as Startup India have fueled this growth. ‘From the bustling streets of Indore to the innovative hubs of Bhubaneswar, smaller cities are emerging as powerhouses of innovation,’ he stated. The minister pointed to simplified regulations, access to funding, and digital infrastructure as key enablers.
Data from the Department for Promotion of Industry and Internal Trade (DPIIT) backs this up. As of now, India boasts over 2 lakh DPIIT-recognized startups, with states like Uttar Pradesh, Gujarat, and Maharashtra leading the charge outside Tier 1. Tier 2 cities like Jaipur, Lucknow, and Coimbatore have seen exponential rises, contributing fintech, agritech, and edtech ventures.
This trend signals a broader economic transformation. Rural and semi-urban areas are witnessing job creation, skill development, and GDP contributions. Experts attribute it to affordable living costs, untapped markets, and strong local talent pools. However, challenges like infrastructure gaps and funding access remain.
Singh emphasized the government’s commitment to bridging these gaps through schemes like the Atal Innovation Mission and Fund of Funds. ‘The future of Indian startups is inclusive and widespread,’ he affirmed. As Tier 2 and 3 cities gear up, India’s ambition to become the third-largest startup ecosystem globally looks ever more achievable.