Startups, investors for regulatory changes to unlock domestic capital

India’s venture-capital industry and startup ecosystem want regulatory relief from the government in the Budget, arguing that policy changes could unlock billions of dollars in domestic capital for startups and position the country as a leader in emerging technologies.

- PEERZADA ABRAR, UDISHA SRIVASTAV & AJINKYA KAWALE

Investors and startup executives are calling for extending the period for an entity to be recognised as a startup from 10 to 15 years for deep-tech companies, rationalising taxes on alternative investment funds (AIFs), and reduced goods and services tax (GST) on education-technology (edtech) platforms.

The demands come as fundraising activity hits multiyear lows.

There is also a need for the regulatory framework to keep pace with the capital-intensive needs of sectors like semiconductors, space technology, and artificial intelligence (AI) — the areas where the government has ambitions on self-reliance.

Anirudh A Damani, managing partner at Artha Venture Fund, said the deep-tech ecosystem’s core expectation was policy alignment with India’s long-term self-reliance ambitions.