Starting up a company in India is quite thrilling but challenging at the same time. DPIIT, the Department for Promotion of Industry and Internal Trade, plays a significant role in supporting entrepreneurship and small businesses. DPIIT, under the Ministry of Commerce and Industry, is present to help startups in many ways, making regulations more accessible to financial support. DPIIT keeps the startups growing and thriving. Therefore, this article will discuss how DPIIT helps Indian startups.

What is DPIIT?

DPIIT is a government agency that promotes industry and internal trade in India. It supervises industrial policies, trade laws, and foreign investment. DPIIT mainly focuses on making things more user-friendly for startups, fostering innovation, and providing resources for scaling.

The scheme was launched in India by its government in 2016. Essentially, the responsibility of implementing the scheme lies at the core of DPIIT. DPIIT intends to build a robust ecosystem for startups that can help them contribute to the economy as a whole.

How DPIIT Can Assist Startups?

DPIIT has various advantages for the startups. DPIIT has significantly extended benefits to startups registered under the Startup India initiative of DPIIT. Such benefits have been made available to the startups in areas like legal support, funding, and networking. Majorly, DPIIT helps the startups in the following ways, which are listed below:

Making it Easy to Comply with Laws

Regulatory compliances prove to be a hassle for startups. DPIIT also makes it easier for startups to comply with business laws. Registered startups under DPIIT enjoy several relaxations:

• Self-certification: DPIIT offers the opportunity for self-certification for compliance with specific labor and environmental laws. In other words, they can declare themselves compliant and do not require frequent inspections. That saves valuable time and effort.
• Quick Clearances: DPIIT-registered startups get quick clearances for their business operations. This enhances the speed of getting proper licenses and approvals.

Tax Benefits for DPIIT Registered Startup

DPIIT-registered startups gain many tax benefits that reduce costs. They are:

• Tax Holiday: Start-ups can be granted a 3-year tax holiday in the first 10 years of incorporation. Thus, a particular business will not be required to pay income tax for three successive years. It helps companies to use their income for reinvestment purposes instead of paying taxes for an extended period.
• Relief against Capital Gains Tax: Relief against capital gains tax is provided to Startups in case investors sell their shares. It attracts more people to invest in startups, which accelerates their growth.
• Relief against Angel Tax: DPIIT-registered Startups are exempted from angel tax, too. The Angel tax is levied on the amount raised by a startup from an angel investor that exceeds the fair market value. This exemption attracts more investment in startups.

Funding Access for DPIIT Registered Startup

Funding generally determines how far any startup can go. DPIIT ensures that the government-backed schemes allow the startups access to any form of funding.

• Fund of Funds for Startups (FFS): The Indian government has created the Fund of Funds to support needed capital support for start-ups. DPIIT manages this fund with the SIDBI, the Small Industries Development Bank of India. FFS doesn’t directly invest in any start-up but in Venture Capital funds that would further channel such investments toward eligible start-ups.
• Startup India Seed Fund Scheme (SISFS): Here, DPIIT provides seed funding to startups through this scheme. Supports a new enterprise for product development, market-entry, and commercialization. Seeds provide essential funding for startups in the early stages of development, where funding is required to establish a business.
• Credit Guarantee Fund: It has brought in a credit guarantee fund for startups. This provides a safeguard for startups that need loans. They can use it as collateral to get easy loans. The Government of India guarantees the amount that reduces the risk for the lenders. In this way, the government can provide easy credit to its stakeholders even when they do not have any assets to pledge as security.

Support Intellectual Property

For product, technology, and service development startup ventures creating innovative products, technologies, or services, understanding how to protect them is crucial. DPIIT offers exceptional support for startups to ensure the proper security of their IP rights.

• Accelerated Processing of Patent Applications: DPIIT processes patent applications on accelerated scales for the benefit of the startups, which implies obtaining patent application approval more quickly and, thus, a lead in competition over others.
• Low Fee: DPIIT offers a massive relief in terms of fees for filing a patent. They get an 80 percent rebate on patent fees. As a result, the innovation they create is protected, and the product is safer and cheaper.
• PR Awareness and Training: DPIIT conducts training camps and workshops on Intellectual Property Rights. This ensures that the startups understand how to protect and utilize their IPs for business development.

Incubation Support and Mentorship

Start-ups often need incubation support and mentors to succeed. DPIIT promotes incubation through associations with different incubators across India. These incubators give start-ups access to mentors, advisors, and industry experts.

• Atal Innovation Mission (AIM): DPIIT has established the Atal Innovation Mission under the Ministry. The mission aims to develop a culture of innovation within the nation. DPIIT offers incubation support to start-up incubators through AIM to support early-stage start-ups.
• Incubation Centers: DPIIT collaborates with more than 500 incubators located throughout India. The incubation centers offer office space, technical aid, and access to networks of investors and businesspeople.
•  Startup India Hub: DPIIT introduces the Startup India Hub, which connects startups with experts, mentors, and other entrepreneurs. It is a one-stop solution for all startups to access resources and guidance.

Government Tenders and Contracts

DPIIT provides government tenders and contracts to startups so that they can work on big projects.

• Experience and Turnover Relaxation: The DPIIT registered startups are exempted from prior experience and turnover criteria generally required for government tendering. In this way, the young startups can work on government projects.
• GeM (Government e-Marketplace) Portal: DPIIT offers a platform for registered startups to sell their products and services on the GeM portal. The GeM portal is a government e-procurement marketplace. The same will allow the startups to showcase solutions to various government departments.

Networking and Collaboration Opportunities

Networking forms the backbone of a startup that finds investors and partners to collaborate with other companies. DPIIT aids start-ups to associate through various collaboration opportunities.

• Startup India Events: DPIIT hosts events such as the Startup India Showcase that unites startups, investors, and industry captains. The events allow the startups to showcase their products and meet potential investors.
• Global Connect Programs: DPIIT facilitates collaboration between Indian startups and global businesses by implementing Global Connect programs, which assist the company in exploring international markets and forming strategic partnerships with global players.

Simplified Exit Strategy

DPIIT also offers numerous exit options that are not too distant so that ventures can exit in case they are not doing well. Under IBC, startups can also wind up their businesses expeditiously. Compared to the process of an exit, a registered startup can achieve the same in 90 days. Hence, ventures that were in distress could quickly bid farewell without undue delays and heavy legal costs.

DPIIT in Building Strong Startup Ecosystem

DPIIT is essential in India’s overall vital startup ecosystem creation initiatives. Simplifying business regulation, funding support, and providing mentorship to the right tools equips the startups. At the same time, innovation and entrepreneurship form the country’s economic growth bedrock.

DPIIT has revolutionized India’s startup ecosystem by offering a host of support measures, from relief from regulatory compliance burdens to raising funds. In this way, DPIIT provides ample opportunities for the growth of every startup. Whether you are a young entrepreneur or a seasoned player with significant experience in handling businesses, DPIIT programs offer all the necessary resources for your startup to succeed. You can visit our website at BHive Workspace for more blogs like these.