India's Startup Ecosystem

Source:TH 

Why in News?  

The Union Minister of Commerce and Industry expressed concerns over the limited innovation in Indian startups, urging them to shift focus from low-tech sectors like grocery delivery to high-tech industries such as semiconductor production, and machine learning. 

What is the Current State of the Startup Ecosystem in India? 

• Scale: India’s startup ecosystem is now the world’s 3rd largest, with over 1.57 lakh Department for Promotion of Industry and Internal Trade (DPIIT) recognised startups as of December 2024, up from just 502 in 2016.  
  • Backed by over 100 unicorns and major hubs like Bengaluru, Hyderabad, Mumbai, and Delhi-NCR, the landscape is expanding rapidly. 
  • Over 51% of startups now come from Tier II and III cities, reflecting nationwide entrepreneurial growth. 
• Key Schemes and Initiatives: 
  • Startup India: Aims to foster innovation, create employment, and boost economic growth. 
    • Under Startup India over 17.28 lakh jobs were created, with key contributions from IT services, healthcare, and professional services. 
    • Rise in women-led startups, with 75,935 startups reporting at least one woman director. 
  • Startup India Seed Fund Scheme (SISFS): Launched with a Rs 945 crore corpus to support early-stage startups. By 2024 under SISFS, 213 incubators have been approved, benefiting 2,622 startups. 
  • Fund of Funds for Startups (FFS): It is managed by Small Industries Development Bank of India (SIDBI) and channels funds to Securities and Exchange Board of India registered Alternative Investment Funds (AIFs), which in turn invest in startups via equity and equity-linked instruments.  By 2024, 1,173 startups have been funded. 
  • Atal Innovation Mission (AIM): Launched in 2016 to promote innovation, focusing on creativity and ecosystem-building. 
    • 10,000 Atal Tinkering Labs have been set up, and 3,556 startups have been incubated in 72 Atal Incubation Centres, creating 41,965 jobs. 
  • Credit Guarantee Scheme for Startups (CGSS): Provides credit guarantees for loans to DPIIT-recognized startups. 
    • As of January 2025, Rs 604.16 crore in loans have been guaranteed, including Rs 27.04 crore for women-led startups. 
  • MeitY Startup Hub (MSH): A central platform under Ministry of Electronics and InformationTechnology (MeitY) supporting over 5,310 tech startups, fostering innovation and collaboration across India’s tech startup ecosystem. 

What Challenges Hinder the Success of Startups in India? 

• Infrastructure Challenges: High operational costs and infrastructure deficiencies in India, especially in smaller cities and rural areas, pose significant challenges for startups. Issues with reliable internet, transportation, and energy supply increase overhead costs for new businesses. 
• Consumer-Focused Over Deep-Tech Innovation: Most Indian startups focus on consumer services (e.g., food delivery, fintech), unlike China’s deep-tech ventures in AI chips, or (EVs) reflecting structural economic trends, not just the choices of entrepreneurs. 
• Structural Economic Constraints: The startup ecosystem mirrors India’s segmented demand structure, which can be categorized into Rich (150 million affluent consumers), Middle-income (300 million aspirational but price-sensitive users), and Poor (1 billion largely unmonetizable users). 
  • Startups primarily target the middle-income group, using the poor's labor and the rich's capital, leading to scalable but not deeply innovative models. 
  • Lack of Domestic Venture Capital: Indian startups face a policy environment that discourages high-capital, high-risk ventures into industries like EVs, robotics, and semiconductors. 
  • India's startup ecosystem is facing a slowdown, with over 5,000 closures mostly in Maharashtra due to funding challenges and rising competition.  
  • Despite the SISF offering early-stage support, it fails to meet long-term capital needs, especially in high-capital sectors like EVs, and robotics.  
  • Seed funding dipped by 25% and Direct-to-Consumer (D2C) startup funding fell by 18% in 2024, reflecting cautious investor sentiment. 
    • This highlights a clear need for more domestic investors who are willing to invest in high-risk, long-term ventures. 
  • Venture capitalists, crucial for early-stage growth, remain limited as investors prefer safer, fast-return sectors like e-commerce amid macroeconomic and political uncertainties. 
• Limited R&D Spending: India’s R&D investment is just 0.64% of GDP, limiting innovation in high-tech sectors. The focus has been more on basic research than applied, commercially viable research. 
• Exit Challenges: Indian startup Initial Public Offering (IPOs) have underperformed, with many trading below issue prices due to high valuations, and profitability concerns. Limited exit options and poor performance have increased investor caution.

What Measures can be Adopted to Boost Startup Ecosystem in India?

• Fostering Industry-Institution- Academia Linkage: Indian startups in deep-tech and space can scale globally by partnering with institutions like the Defence Research and Development Organisation (DRDO), the Indian Space Research Organisation (ISRO), and top academic institutes such as the Indian Institutes of Technology (IITs) and the Indian Institute of Science (IISc). 
  • These collaborations offer government support, credibility, and access to global contracts, enhancing their innovation and competitive edge, similar to the alliances seen between NASA and SpaceX. 
  • Provide startups with essential funds based on outcome-based grants under the India Semiconductor Mission, IndiaAI Mission, and National Quantum Mission (NQM). 
• Scaling Innovation for Global Reach: To secure funding for deep innovation, Indian startups must focus on creating high-quality, scalable products like Agnikul’s 3D-Printed Rocket Engine, and Zoho’s cloud software.  
  • This will enable them to compete globally and attract global partnerships. Government programs like the India Innovation Growth Programme can help facilitate market linkages and support global expansion. 
• Positioning India as a Leader in Green Innovation: Indian startups like Ather Energy highlight the potential for innovation in sustainability.  
  • By focusing on eco-friendly solutions such as electric mobility and clean energy, startups can align with the Mission LiFE and the "Made in India for the World" vision, positioning India as a global leader in green technologies for a sustainable future. 
• Developing and Retaining a Future-Ready Talent Pool: Programs like Skill India and Atal Tinkering Labs should focus on advancing skills in AI, machine learning, and data analytics.  
  • Additionally, retaining STEM talent within India is essential to prevent brain drain and ensure sustained innovation and growth in the startup ecosystem. 
• Unified Digital Compliance Platform: Establishing a Unified Digital Compliance Platform can simplify India’s complex regulations by integrating compliance requirements into a single interface, automating tasks, offering real-time updates, and guiding startups on legal obligations.

Conclusion

India's startup ecosystem is thriving, fueled by government schemes, and a growing entrepreneurial mindset. However, to fully realize its potential, India must reform its manufacturing sector to enable startups to drive industrial transformation and global competitiveness. With a clear roadmap, the ecosystem is poised for continued success. 

Drishti Mains Question: How can Indian startups scale up and compete globally in sectors like deep-tech? Discuss the challenges they face and suggest solutions.

Digital Threat Report 2024

Source: PIB

Why in News? 

India has released its first-ever Digital Threat Report 2024, aimed at strengthening cybersecurity in the Banking, Financial Services, and Insurance (BFSI) sector. The report highlights evolving cyber risks and outlines strategic measures to protect the nation’s financial infrastructure, crucial for its digital economy. 

What are the Key Highlights of the Cyber Threat Report 2024? 

• Surge in Cyberattacks and Data Breach Costs: In 2024, the BFSI sector witnessed a surge in cyberattacks, with global data breach costs rising to USD 4.88 million (a 10% increase from 2023) and USD 2.18 million in India.  
  • BFSI’s digital growth, projected to reach USD 3.1 trillion in payments by 2028, is widening its cyber threat exposure. 
  • Phishing attacks in India surged by 175% in June 2024 compared to 2023. 
• Crypto Attacks: Crypto exchanges have been targeted by cybercriminals and new malware variants also threaten crypto wallets by extracting private keys for unauthorized access. 
• Social Engineering Attacks: Business Email Compromise (BEC) and phishing are rising cyber threats, with 54% of BEC cases involving pretexting. 
  •  AI and deepfake technologies are making these attacks more convincing by impersonating executives to manipulate financial transactions or steal sensitive data. 
• Impact of AI on Phishing: AI is making phishing attacks more convincing by generating emails that mimic trusted entity's tone, style, and branding.  
  • AI-driven chatbot phishing scams engage victims interactively to extract personal data. 
  • Large language models (LLMs) like WormGPT and FraudGPT bots are lowering the barrier for cybercriminals, enabling the creation of more convincing phishing emails and malware. 
• Stolen Credentials and Malware: Hackers are using stolen login details and malware using techniques like session hijacking, brute-force attacks, deepfake technology, and BOLA vulnerabilities to bypass Multi-Factor Authentication (MFA), mainly targeting SaaS platforms like email and VPN services. 
  • SaaS platforms are a type of digital platform that facilitates the selling, distribution, and management of cloud-based software and services. 
• Cloud Security Weaknesses: Misconfigured cloud services, such as publicly accessible storage and weak access controls, are major targets.  
  • There has been a 180% increase in attacks exploiting cloud vulnerabilities. 

• Key Recommendations: 
  • It includes adopting a human-centric, leadership-driven approach to cybersecurity, backed by continuous employee training and cyber-awareness to counter emerging threats like AI phishing and deepfakes. 
  • Implement regular Automated Vulnerability Scans, real-time threat intelligence sharing, and a multi-layered “defense-in-depth” strategy with firewalls, endpoint protection and Zero Trust architecture. 
  • Leveraging Technology to ensure timely patching (updates), AI-based threat detection and use of MFA for access control. 

What are the Key Emerging Cyber Threats in India?   Click Here to Read: Key Cyber Threats in India

 

 

Conclusion 

As cyber threats evolve, adopting a proactive, multi-layered cybersecurity approach is crucial for safeguarding critical infrastructure. Prioritizing early vulnerability assessments, AI-driven detection, strong authentication, and securing applications enhances resilience. Embedding cybersecurity into organizational strategies will strengthen India’s digital ecosystem and ensure long-term security. 

Drishti Mains Question:  What are the key challenges posed by Cyber Attacks on india. How can the government formulate effective strategies to mitigate the risks posed by cyber attacks?

Ironwood: 7th Generation TPU

Source: IE 

Why in News? 

Google has launched a new computer chip, called Ironwood. It is a 7th generation Tensor Processing Unit (TPU) designed to run Artificial Intelligence (AI) models.  

What are the Key Features of Google Ironwood TPU?  

• AI-Specific Design:  
  • Ironwood is optimized for "thinking models" like Large Language Models (LLMs) and Mixture of Experts (MoEs), enabling proactive AI that generates insights, not just data.  
  • Powerful Performance: Ironwood supports up to 9,216 chips per pod, delivering 42.5 Exaflops of compute, more than 24x the power of the world's largest supercomputer, El Capitan.  
  • Energy Efficiency: Ironwood delivers double the performance per watt compared to the previous generation, using advanced liquid cooling for power efficiency.  
  • Scalable AI Workloads: Ironwood is part of Google Cloud's Hypercomputer architecture, enabling the scaling of generative AI models and supporting the demands of advanced AI tasks. 

What is a Tensor Processing Unit (TPU)? 

• A Tensor Processing Unit (TPU) is a type of Application Specific Integrated Circuit (ASIC), Its purpose is to handle a narrow set of specific tasks. 
• TPUs were specifically developed to accelerate machine learning workloads and to handle AI-specific computational tasks, making them more highly specialized than both CPUs and GPUs. 
  • They run Google’s main AI services, such as Search, YouTube, and DeepMind’s language models. 
• They are highly efficient at handling large datasets and running complex neural networks, allowing for faster training of AI models compared to traditional processors.      

What is the Difference between CPU, GPU and TPU? 

Feature	CPU	GPU	TPU
Primary Function	General-purpose computing	Parallel processing, graphics rendering	Accelerating machine learning workloads
Processing Type	Sequential processing (can also include some parallelism in modern CPUs)	Parallel processing	Parallel processing (optimized for AI tasks)
Number of Cores	1 to 16 cores (can be more in advanced CPUs)	Thousands of cores	Specialized cores optimized for tensor operations
Performance for AI	Not optimized for AI	Good for AI tasks, especially for large datasets	Highly optimized for deep learning and neural networks
Efficiency	Versatile but less efficient for parallel tasks	Highly efficient for parallel tasks (e.g., deep learning training, large-scale data processing)	Extremely efficient for AI, especially neural network training
Real-World Applications	Personal computing, business applications, software development	Autonomous vehicles, facial recognition,  video processing, AI model training	Healthcare AI (e.g., diagnostics), autonomous systems, speech recognition, image recognition

 

Legal Definition of Woman by the UK Supreme Court

Source: TH

Why in News? 

The United Kingdom (UK) Supreme Court (SC) has ruled that the legal definition of a "woman" under the UK’s Equality Act, 2010, is based on biological sex, marking a significant decision in the ongoing debate over gender identity.

What is the UK Supreme Court Ruling on the Legal Definition of a Woman?

• Biological Sex as the Defining Factor: The court clarified that the definition of sex in the Equality Act 2010 is "binary" and based on biology. 
  • This means that individuals not born as biological females cannot obtain the legal protections afforded to women under the Act by changing their gender with a Gender Recognition Certificate. 
  • The court excluded transgender women from this definition of women for equality purposes.
  • Trans woman individuals remain protected under the Equality Act under the category of ‘gender reassignment’ and continue to be recognized as a vulnerable minority
• Implications:  The ruling allows institutions offering women-only services like shelters, prisons, and changing rooms to legally exclude transgender women based on biological sex. 

  • In employment and equal pay cases, biological sex will determine legal standing, meaning trans women may not be valid comparators and will guide UK courts in applying sex-based protections going forward.

How Has the SC of India Addressed Gender and Sexuality?

• National Legal Services Authority v. Union of India (2014): The SC affirmed the right of individuals to self-identify their gender, acknowledging that gender identity goes beyond biological sex, and includes the right to be recognized as male, female, or transgender.
• Puttaswamy Case (2017): The Court’s affirmation of the right to privacy included sexual orientation as a fundamental right, emphasizing that discrimination based on sexual orientation violates human dignity and equality.
• Navtej Singh Johar vs. Union of India (2018): The SC decriminalized homosexuality by reading down Section 377 of the Indian Penal Code ( now Bharatiya Nyaya Sanhita), which had previously criminalized consensual same-sex relations.

Drishti Mains Question: Q. Analyze the distinction between biological sex and gender identity. Evaluate the role of judicial interpretations in advancing gender rights in India.

Global Trade Outlook and Statistics 2025

Source: TH 

Why in News?  

The World Trade Organization's (WTO) Global Trade Outlook and Statistics 2025 reveals that global merchandise trade is projected to decline by 0.2% in 2025. This reflects ongoing tariff tensions, particularly between the US and China, and broader trade policy uncertainty. 

What is the Global Trade Outlook for 2025-26? 

• Projected Decline in Merchandise Trade: The WTO’s revised forecast for global merchandise trade shows a 0.2% decline in 2025.  
  • If trade tensions escalate further, especially with new tariff measures, the decline could deepen to 1.5%. This marks a sharp contrast from the 2.9% growth in 2024. 
• Impact of Tariffs: The reactivation of US reciprocal tariffs could cut global trade growth by 0.6% points, while ongoing US-China tariff escalation in 2025 may reduce trade by an additional 0.8% points. 
• Modest Growth in Services Trade: Despite the challenges in merchandise trade, the global services trade is projected to grow by 4.0% in 2025, slower than expected due to tariff-induced disruptions.  
  • The decline in goods trade impacts services like transport and travel, while broader uncertainty dampens investment-related services. 
• Regional Impact: North America is expected to face a sharp 12.6% decline in exports, significantly affecting global trade. 
  • Asia and Europe are projected to see modest trade growth, with Asia’s exports growing by 1.6%, and Europe’s exports growing by 1.0%. 
• Vulnerable Economies: Least-developed countries (LDCs), heavily reliant on a narrow range of exports, are particularly vulnerable to the downturn in global trade. 
• Trade Diversions: US-China trade disruption may drive significant trade diversion, with Chinese exports projected to rise by 4%-9% in regions outside North America.  
  • Meanwhile, US imports from China are expected to fall, creating opportunities for other suppliers, including LDCs, to fill the gap. 
• Risk of Economic Recession: The United Nations Conference on Trade and Development (UNCTAD) forecasts global growth to slow to 2.3% in 2025, signaling a potential shift toward recession, with developing countries being particularly vulnerable. 
  • As the risks of economic fragmentation and geo-economic confrontation rise, UNCTAD urges increased regional and international policy coordination to strengthen global economic resilience. 
• India’s Trade Position: In 2024, India’s rank among leading merchandise exporters (excluding intra-EU trade) dropped to 14th, while its share of global merchandise trade remained steady at 2.2%.  
  • Similarly, India’s rank among major merchandise importers (excluding intra-EU trade) fell to 7th, with its share unchanged at 3.4%. 
  • As for commercial services (excluding intra-EU trade), India’s rank as an exporter declined to 6th, with a slight drop in share from 5.4% to 5.3%. In terms of imports, India’s rank remained at 6th, although its share fell slightly from 4.2% to 4.1%. 

 

Drishti Mains Question: Analyze the impact of the tariff escalation on global trade, economic growth, and regional trade patterns.

Shinkansen Trains and Bullet Train Project

Source: BS 

Japan is set to provide India with two Shinkansen train sets (E5 and E3 series) at no cost in 2026. 

• Shinkansen Trains (E5 Series): It has been operational since 2011. With a speed of 320 km/h, it was initially chosen for India’s first bullet train line. 
  • Known for its aerodynamic design, advanced safety systems, and smooth ride quality, it represents the cutting edge of high-speed rail technology. 
• Shinkansen Trains (E3 Series): A slightly slow and older model primarily used for mini-shinkansen services, it shares similar features to the E5 series, such as safety mechanisms. 
• Bullet Train Project (Mumbai-Ahemdabad): Implemented by the National High-Speed Rail Corporation Ltd. (NHSRCL), the project incorporates Japanese Shinkansen technology. 
  • The project is funded by the Japan International Cooperation Agency (JICA), covering about 80% of the costs. 
  • The Project was initially scheduled for completion by 2022, but the revised deadline is now 2028. 
  • The Mumbai-Ahmedabad High-Speed Rail Corridor is part of India's National Rail Plan (NRP) 2030. 

Read More: Revamping Indian Railways, India-Japan Relations

GI Tag for Banarasi Shehnai

Source:TH 

Varanasi’s rich cultural and craft heritage gained national recognition as the Banarasi Shehnai was granted Geographical Indication (GI) tag. 

• About the Banarasi Shehnai: 
  • It is a traditional wind instrument deeply rooted in the Banaras Gharana of Indian classical music. 
  • It gained national prominence through Ustad Bismillah Khan, who famously played the shehnai at the Red Fort on India’s first Independence Day. 
    • He elevated the Shehnai to prominence in Indian classical music with his performance at the Calcutta All India Music Conference in 1937. 
    • He was awarded India's highest civilian honour, the Bharat Ratna in 2001. 
  • The instrument holds a divine and auspicious status, often performed at weddings, religious ceremonies, and temple rituals. 
• Geographical Indication (GI) Tag: 
  • About: A GI tag is a name or sign used on certain products that correspond to a specific geographical location or origin.  
    • The GI tag ensures that only authorised users or those residing in the geographical territory are allowed to use the popular product name.  
      • It also protects the product from being copied or imitated by others.  
    • A registered GI is valid for 10 years and can be renewed.  
    • GI registration is overseen by the Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry.  
  • Legal Framework:  
    • Geographical Indications of Goods (Registration and Protection) Act, 1999  
    • WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). 

Read More: GI Tags for Over 17 Products

V2G Technology

Source: TH 

Kerala, in collaboration with IIT Bombay, has launched a pilot project to explore the potential of Vehicle-to-Grid (V2G) technology. 

• About V2G: It enables Electric Vehicles (EV) batteries to return power to the grid when not in use, supporting renewable energy integration and enhancing grid stability. 
• Modes: It has two modes: 
  • Grid-to-Vehicle (G2V): Charging EVs using grid power. 
  • Vehicle-to-Grid (V2G): Discharging EV power back to the grid. 
• Need: EV users provide services during fluctuations in renewable energy generation and serve as a decentralized storage resource, offering emergency power when needed. 
• V2G Adoption: Globally, U.S., U.K and  Netherlands lead with EV owners compensated for supplying power during peak demand. 
  • India is in the early stages of V2G adoption, primarily focusing on EV charging infrastructure.  
  • The Central Electricity Authority (CEA) has established a committee on reverse charging, led by its chairman. 

Read More: New Electric Vehicle Policy 2024