The Government of India has taken a significant step towards strengthening the Startup India Action Plan by revising the startup recognition framework. Announced by the Ministry of Commerce & Industry on 5 February 2026, this policy update reflects the Government’s intent to make India a global innovation powerhouse, a manufacturing-led economy, and a hub for emerging and deep technologies.
As Startup India enters its second decade, the revised framework aims to create a more inclusive, predictable, and future-ready ecosystem for founders. It also seeks to attract long-term patient capital, particularly in sectors that require heavy research, longer gestation periods, and advanced technological development.
This blog explains the key changes in the revised startup recognition framework and what they mean for startups, deep tech companies, and cooperative-led enterprises across India.
Background: Evolution of Startup India
Since its launch in 2016, the Startup India initiative has played a transformative role in India’s entrepreneurial journey. It has enabled:
- Simplified compliance and self-certification
- Tax incentives and exemptions
- Easier access to funding and government schemes
- Faster intellectual property protection
- Improved ease of doing business for new ventures
However, over the years, the startup ecosystem has evolved significantly. Many startups today operate at a much larger scale, require longer development cycles, and work on complex technologies that were not fully addressed under the earlier framework.
The revised recognition criteria are designed to bridge this gap.
Key Highlights of the Revised Startup Recognition Framework
1. Turnover Limit Increased to ₹200 Crore
One of the most impactful changes is the increase in the turnover threshold for startup recognition.
- Earlier limit: ₹100 crore
- Revised limit: ₹200 crore
This change acknowledges the reality that many startups continue to innovate, expand, and remain founder-driven even after crossing ₹100 crore in turnover. By increasing the threshold, the Government ensures that such growing enterprises do not lose access to startup benefits prematurely.
Why this matters:
- Mid-stage startups can now continue to enjoy Startup India benefits
- Scaling businesses get regulatory stability during growth phases
- Encourages long-term innovation rather than short-term exits
2. Introduction of a Dedicated Category for Deep Tech Startups
Recognising the unique challenges faced by deep technology enterprises, the Government has introduced a separate “Deep Tech Startup” category.
What qualifies as a Deep Tech Startup?
Deep Tech Startups are enterprises working on cutting-edge, breakthrough technologies that involve significant scientific or engineering innovation. These typically include sectors such as:
- Artificial Intelligence and Machine Learning
- Semiconductors and advanced electronics
- Biotechnology and life sciences
- Clean energy and climate technologies
- Space tech and defence technology
- Robotics and advanced manufacturing
The eligibility criteria for Deep Tech Startups have been significantly expanded.
Revised eligibility for Deep Tech Startups:
- Age limit increased from 10 years to 20 years
- Turnover limit increased to ₹300 crore
This is a landmark move, as deep tech ventures often require long research cycles, extensive testing, regulatory approvals, and heavy capital investment before commercialisation.
Impact of this change:
- Encourages R&D-led entrepreneurship
- Makes India competitive with global deep tech ecosystems
- Supports founders who take long-term innovation risks
3. Inclusion of Cooperative Societies as Eligible Startups
Another major reform is the extension of startup recognition to cooperative entities.
Under the revised framework, the following are now eligible for startup recognition (subject to other conditions):
- Multi-State Cooperative Societies registered under the Multi-State Cooperative Societies Act, 2002
- Cooperative Societies registered under State or Union Territory Cooperative Acts
This move aligns closely with the Government’s vision of grassroots innovation, especially in sectors such as:
- Agriculture and allied activities
- Rural industries
- Dairy, fisheries, and food processing
- Community-based and farmer-led enterprises
Why this is important:
- Enables cooperatives to access startup benefits and funding
- Encourages innovation at the rural and grassroots level
- Integrates traditional economic structures with modern entrepreneurship
Policy Intent: A More Inclusive and Future-Ready Ecosystem
The revised framework is the outcome of extensive consultations with:
- Startup founders
- Investors and ecosystem stakeholders
- Line Ministries and Government Departments
The policy changes reflect a clear shift from a one-size-fits-all approach to a more sector-sensitive and stage-sensitive framework.
The Government aims to:
- Expand access to startup incentives
- Provide targeted support to innovation-driven enterprises
- Facilitate patient capital in high-technology sectors
- Strengthen India’s position as a global startup and innovation hub
What This Means for Startups and Founders
From a practical standpoint, the revised startup recognition framework offers several advantages:
For Scaling Startups
Startups approaching or crossing ₹100 crore turnover can now continue to enjoy startup recognition benefits without regulatory uncertainty.
For Deep Tech Founders
Extended age and turnover limits provide breathing space to focus on innovation rather than compliance-driven restructuring.
For Cooperative Enterprises
Recognition opens doors to structured funding, innovation grants, and formal startup ecosystem support.
For Investors
Clearer definitions and extended eligibility reduce policy risk and encourage long-term capital deployment.
Advisory Perspective: What Founders Should Do Next
With the revised framework in place, startups should:
- Review their eligibility under the new turnover and age criteria
- Assess whether they qualify as a Deep Tech Startup
- Ensure compliance with Startup India recognition conditions
- Align corporate structuring and funding plans with updated norms
Professional guidance becomes especially important in:
- Determining correct startup classification
- Managing turnover thresholds and compliance
- Structuring investments and exits efficiently
Final Words
The revised startup recognition framework marks a significant evolution of the Startup India initiative. By increasing turnover limits, creating a dedicated deep tech category, and including cooperative societies, the Government has signalled its commitment to long-term, inclusive, and innovation-led growth.
These reforms not only support founders at different stages of their journey but also position India as a global destination for technology, research, and knowledge-intensive entrepreneurship.
As India’s startup ecosystem matures, such forward-looking policy interventions will play a crucial role in shaping the next decade of innovation.
