Startup policy shift: Govt doubles turnover limit to Rs 200 crore; what it means for founders and deep tech ecosystem – The Times of India

The government has expanded the criteria for recognising entities as startups by doubling the turnover threshold to Rs 200 crore, while also introducing a new recognition category for ‘Deep Tech Startups’, aimed at supporting high-technology and research-driven enterprises.The move is part of broader efforts to align policy support with the evolving nature of India’s startup ecosystem, which is increasingly shifting towards longer innovation cycles, higher capital intensity and delayed commercialisation, especially in deep technology, manufacturing and R&D-led sectors.

According to a notification issued by the Department for Promotion of Industry and Internal Trade (DPIIT), the turnover limit for startup recognition has been increased from Rs 100 crore to Rs 200 crore, while new norms have also been framed for Deep Tech Startups, PTI reported.

Deep Tech Startup criteria expanded

For Deep Tech Startups, the government has significantly expanded both age and turnover limits.Under the revised framework:• Age limit has been extended from 10 years to 20 years from the date of incorporation or registration• Turnover limit has been increased to Rs 300 crore“This step addresses the unique requirements of deep tech entities operating in areas with long gestation periods, high R&D intensity, and capital-intensive development cycles,” the DPIIT said.

Startup recognition extended to cooperatives

In another key policy change, startup recognition eligibility has now been extended to certain cooperative enterprises to support innovation-led growth at the grassroots level.Eligible categories include:• Multi-state cooperative societies registered under the Multi-State Cooperative Societies Act, 2002• Cooperative societies registered under State and Union Territory Cooperative ActsThe move is aimed at encouraging innovation in agriculture, allied sectors, rural industries and community-based enterprises.

Why the criteria were changed

The government said the revisions reflect structural shifts in India’s startup ecosystem over the past decade, where several innovation-led enterprises outgrow existing age or turnover limits despite still being in development or validation stages.“Keeping in view the evolving startup ecosystem and the need to support startups with targeted benefits at various stages of their business lifecycle, the turnover limit for recognition as a startup has been increased from Rs 100 crore to Rs 200 crore,” the notification said.The decision follows consultations with multiple stakeholders across the startup ecosystem as well as various ministries and departments.

Expected impact on the startup ecosystem

The updated criteria are expected to:• Expand access to policy benefits for research and innovation-driven enterprises• Support deep tech ventures requiring longer development timelines• Enable cooperatives to drive innovation in agriculture and rural sectorsThe government said that as Startup India enters its second decade, the reforms are aimed at creating a more predictable, inclusive and future-ready policy environment, while also helping attract long-term patient capital into high-technology and R&D-intensive sectors.So far, around two lakh entities have been recognised as startups. Recognised startups are eligible for multiple incentives, including income tax benefits under the Startup India initiative.