Despite the leadership encouragement on both sides most of the Israeli startups are reluctant to join hands with ‘Startup India’ and the Indian Startups are not craving for Israeli collaboration too because there are a plenty of alternatives available to them. This hesitation is perhaps one of the main obstacles to the real collaboration and the losses are greater on the Israeli side. Due to this sort of stagnation, the Israeli entrepreneurs are not able to leverage the good opportunities that ‘transforming India’ offers. The young Israeli entrepreneurs need to have a clear understanding of the trajectory of ‘Startup India’ as the growth of the Indian startup ecosystem has a unique roadmap of its own.
India is going through a big transformation. The pace at which Indian government is executing the change is something that no one has imagined before! To understand this pace, the Israeli entrepreneurs need to see the things in the light of their country’s own economic reforms. In their country, it is the result of the courageous economic reforms of Netanyahu government due to which Israel, which once had a number of government and union controlled companies, now has an identity of Startup Nation. Similiar to that in India, Prime Minister Modi’s “Reform, Perform and Transform” agenda is yielding remarkable results. Four years of Modi’s government have transformed India’s prospects drastically and the results are visible in every sector of the economy.
The growth of Indian startup ecosystem is fundamentally different from Israel. The ‘Startup India’ is a government-driven initiative. On 15th August 2015 from the ramparts of Red Fort, Prime Minister Narendra Modi shared his vision of ‘Start-up India, Stand-up India’ with the country. A few months later on 16th January 2016, PM Modi launched the Startup India Action Plan. To promote startup culture, the Indian government has taken a number of significant reforms. Some of the key policy-based decisions included in the Startup India Action Plan which have helped in the grooming of startup ecosystem are: tax exemption for startups for 3 years, provision of self certification for environmental compliance for white category startups, no inspection of labour laws compliance for three years, discount on patent fee and provision for fast-tracking the process of patent examination, tax exemption on capital gains, relaxation in the norms of public procurement for manufacturing startups, faster exit for startups through Insolvency and Bankruptcy Bill 2015, tax exemption for investments above fair market value, a dedicated Rs.10000 crore ‘Fund of Funds’ and the credit guarantee for Startups etc. In India, some of the key pain areas of the startups were time and cost involved in the patent filing process, to address this concern through the scheme for ‘Startups Intellectual Property Protection’ government has given up to 80% of rebate in fees combined with free legal assistance, for aspirant entrepreneurs it is a really big relief! Apart from this the Trademark Rules, 2017 have also been amended to provide 50% rebate in fees for Startups.
The Indian government is promoting the Startup Culture in the country through different creative events and mechanism such as Atal Innovation Mission, Startup India Hub, Startup Fest, mobile app and portal for startup registration, Annual Incubator Grand Challenge, by setting up innovation and entrepreneurship centers at National Institutes and building new Research Parks across the country. To promote a culture of innovation and healthy competition which brings out the best talent of the youths a number of competitive events like Atal New India Challenge, Smart India Hackathon, and Agriculture Grand Challenge etc. have been organized by the government along with the different innovative programmes for the school going students too. PM Modi had outlined a broad vision of fostering an innovation culture in India, in which the urban and rural youths, have equal opportunities for growth.
In India, different ministries and departments of the central government are providing the desired space to Indian startups in their supply chains. A number of startups are actively collaborating with the Central and State Governments in their different initiatives. One of the most sensitive ministries of the government, the Defense Ministry is encouraging the young Indian startups to participate in the Indian Army’s Modernization and Defense Indigenization drive. The MoD has taken a number of steps to encourage the participation of Startups/MSMEs in the Defense sector. The Federation of Indian Chambers of Commerce and Industry (FICCI) and MoD have launched a platform called “Society for Indian Defense Start-ups,” an institutional-support mechanism for development and funding of defense startups. In this year’s DefExpo a good number of events were organized to encourage the startups/MSMEs participation in the defense supply chain. On the sidelines of the DefExpo, the Defense ministry was running a hackathon to invite fresh ideas from startups and students with a proper framework of injecting the selected ideas into the system.
Now the question comes when Indian government is focusing too much on Indian Startups growth what’s in it for Israeli Startups? The first thing which Israeli entrepreneurs need to understand is that in the long term, their conceptual abilities are not sufficient in India! Indian entrepreneurs are equally bright and smart as Israelis. India, the world’s fastest-growing major economy has created an attractive business environment in the country and has a good reach/repute in the ASEAN and African countries. Israeli Entrepreneurs need to see India as a fertile ground for scaling up their operations and for expanding their markets in different geographies. The Startup India and Startup Nation together can present a model for the whole world, something which we have never seen before!
India’s approach to transformation is fast and inclusive. The Indian government is determined to promote MSMEs and startups in every sector of the economy. The Modi-Netanyahu era is special. Both leaders are known for their courageous and revolutionary steps, proactive approach and the desire to do more. The next ten years of transforming India are going to be very exciting!
The Indian and Israeli startups should get rid of any kind of ‘if’ and ‘but’ as Netanyahu has rightly said when the talent of both sides will join hands “even the sky is not the limit.”