As of December 2024, data from the Ministry of Corporate Affairs reveals that out of 1.52 lakh startups recognized under the Startup India programme, 5,063 (3.3%) have shut down. Maharashtra recorded the most closures with 929 startups, followed by Karnataka (644), Delhi (593), Uttar Pradesh (487), and Telangana (301).
Despite these closures, startups have significantly contributed to India’s economy by creating 16.6 lakh direct jobs across over 55 industries.
The IT services sector leads in job creation with 2.04 lakh jobs, followed by healthcare with 1.47 lakh jobs and professional services with 94,060 jobs.
In addition to startups, 61,469 micro, small, and medium enterprises (MSMEs) have closed since 2020. These closures highlight the challenges faced by businesses, even as they play a crucial role in driving economic growth.
The data shows the dual nature of India’s startup and MSME landscape: while many businesses face hurdles leading to shutdowns, others continue to generate employment and contribute to various industries.
These statistics emphasize the need for stronger support systems and policies to help startups and MSMEs thrive in a competitive environment.
Addressing these challenges is crucial to sustaining the momentum of job creation and economic contributions from these sectors.
Startups and MSMEs remain integral to India’s economic fabric, and tackling the reasons behind closures could further unlock their potential for growth and innovation.