Rajeev Chandrasekhar said that India has become the preferred destination for all type of startups for incorporation
The minister said that a lot of startups have shifted to India after the recent banking crisis in the US
The government expects India’s digital economy to reach a size of $1 Tn by 2025-26 and generate 60-65 Mn employment opportunities by then
Union Minister of State for Electronics and Information Technology Rajeev Chandrasekhar on Friday (June 9) said that India is the preferred destination for incorporation for all types of startups.
“As somebody who’s seen technology for several decades, I can tell you that today, the preferred destination for incorporation of any startup is India,” Chandrasekhar said responding to a question by Inc42 about instances of Indian startups incorporating abroad.
The minister was addressing the press on achievements of the Centre’s ‘Digital India’ campaign in the last nine years.
Talking about the recent rise in startups shifting their base to India after the banking crisis in the US, the MoS IT said, “After the implosion of the Silicon Valley Bank, I personally know that many startups, which depended on the overseas banking system and incorporated themselves there, have started coming back to India.”
The MoS further exemplified his point by pointing to Jim Keller, the chip design legend and former Tesla VP of autopilot hardware engineering. Keller is also known for his work on the AMD K7, the first computer chipset to achieve 1 GHz processing speed, along with several other chipsets for Apple, Intel and AMD.
“Tesla’s chief AI architect started two startups, and he didn’t start up in Europe or Japan or Korea, he started in Bengaluru, India. The trend is that startups do their structural thing for tax purposes, but the work is being done and intellectual property is being created in India,” said Chandrasekhar.
Chandrasekhar was referring to Tenstorrent, a chip design startup where Keller sits as CEO, which recently set up shop in Bengaluru and is headquartered in San Francisco.
To be sure, the government has been working to incentivise startups to incorporate in India and shift their domicile to India.
However, startups moving back to India still have to face massive tax liability. For instance, when fintech decacorn PhonePe moved its domicile back from Singapore to India, its parent company Walmart had to pay more than INR 8,000 Cr in retrospective taxes to the government.
During the conference, Chandrasekhar also highlighted some of the figures demonstrating the growth of the Indian startup ecosystem over the last decade or so. The government said that the number of startups in the country increased to 99,380 in 2023-24 from 500 in 2013-14.
Further, the government noted that India’s digital economy is expected to rise to $1 Tn in 2025-26 from $107.7 Bn in 2014. The government also claimed that India’s digital economy is set to generate 60-65 Mn employment opportunities by 2025-26.