Have you ever considered the reason of start-ups failure, why the founders of these small businesses couldn’t make it like other thriving businesses, which were at one point of time started with scratch but now they are standing proudly in the market. We ask these questions frequently. In 2014, a study done by Fortune.com, it found that out of ten start-ups nine fail, and they are unable to bring their board to the real world. This study also reveals that shortage of funds is the main reason for failure of 30% start-ups and another reason is not enough market demand. So, it is necessary for a start-up that before implementing any business plan or process, it has enough capital for its success. But the situation is changing, because of the success and hard work of many Indian Start-ups, their new ideas, in the last decade and its prosperous environment; they are gaining the attention of foreign countries. Foreign Direct Investment is growing in India and it continues to grow and the result is that the majority of the stakes in Indian start-ups are held by foreign stakes. Because of the innovative ideas of India start-ups, foreign investors believe in their idea and supply the necessary capital required for the growth.



To allow the flow of foreign investment in India Start-ups, the Government of India made provisions in the consolidated FDI policy 2017, which made possible for the Foreign Venture Capital Investors to subscribe up to 100% of the capital of Start-ups, under the automatic route. It allows them to invest in equities or equity-linked or other debt instruments issued by the start-ups and if the start-ups are Partnership or LLP, they can invest in capital or profit sharing. Before moving forward, for better understanding it is necessary to understand some terms like what is start-up, what do we understand by Venture Capital and Foreign Venture Capital Investors?


  • What is a Start-up: As its name suggests start, the term simply means the starting of a business venture; it refers to a company which is in its initial stages of operations. These start-ups are founded by one or more entrepreneurs, who have studied the market, its needs and on the basis of that study they develop that product or service which is in demand. These entrepreneurs in the earlier stages of the company invest themselves but due to the schemes of the Government like Start-up India, to promote the idea of start-up they have been given certain benefits like tax exemption, rebate in patent application and investment through alternative investment funds etc.


  • Meaning of Venture Capital: When start-ups require initial capital or seed capital, then Venture capital plays an important role, this type of funding is different from other conventional sources as Venture capitalist funds those small businesses that have innovative ideas and their ideas have potential for growth in the competitive market. Venture capital funds give risk capital to such businesses, as they know these start-ups have high risk exposure but there is a chance of growth and profit, so in simple words Venture capital is a high risk and high return investment. They don’t provide loans but in exchange of provided capital, equity stake or ownership in the business is offered.



  • Who are Venture Capitalists?: They are limited partnerships who have pooled investment capital, and they invest that capital in a number of companies. They are different in size; they can be a small group of investors or subsidiaries of a large investment bank, commercial bank or may be outside investors. These Venture Capitalists have enough experience and they utilize their expertise to finance those companies who have potential to bring in considerable return on the Venture Capitalist’s investment.


  • Definition of Foreign Venture Capital Investor (FVCI): The term “Foreign Venture Capital Investor” investment by a non-resident or a foreign investor. They invest in Indian Venture Capital Undertakings (IVCU) or Venture Capital Funds. The term has been defined in both SEBI’s FVCI regulations (Regulation 2(g)) and Foreign Direct Investment Policy, 2020, both the definitions are same, which says that the foreign country which invests in India’s Venture Capital is known as Foreign Venture Capital Investor and there are three conditions which must be satisfied by them, 1. Must be incorporated outside India. 2. Must be registered with SEBI, 3. Must follow SEBI’s FVCI Regulations.



FVCI Regulations in India:

  • Eligibility Criteria to get FVCI Certificate from SEBI: According to the regulations 4 of the FVCI regulations, a foreign investor or an applicant has to conform to certain conditions, which are given below:
  • The track record of the applicant person or company; Professional skill or knowledge;
  • Applicant should be financial sound in order to apply for certificate;
  • Must work with integrity and fairness;
  • Mention if applicant is governed by an appropriate foreign regulatory authority or is an income tax payer or present a certificate from its banker or its promoter’s track record, where applicant is neither a taxpayer or a regulated entity;
  • According to the Schedule 2 of the SEBI (Intermediaries) Regulations, 2008, the applicant must be a “fit and proper person, and there are many other important conditions



If the above mentioned conditions are fulfilled then the board will grant a certificate of registration as FVCI to the applicant, if the application is incomplete or necessary conditions have not been met then after giving some time to get rid of objections or an opportunity of being heard, the application will be rejected by the board.


  • Types of Investment Made by an FVCI: In India FVCI can enter in to 2 types of Investment:
    • Indian Venture Capital Undertaking: These are newly incorporated private companies which are so new that they are not completely established in market, they are in need of finances and advice from the investors:
    • Venture Capital Fund: It is a fund, as its name suggest set up as a trust or a company:


  • Restrictions on Investments: According to the Rule 11 of the FVCI regulations, the investment must be made in the given manner:
    • It is mandatory that a minimum percentage of funds to be invested must be invested in the unlisted equity shares or equity-linked instrument of a VCU and the minimum percentage is 66.67;
    • The other condition is not mandatory, it says that the remaining portion of the investible funds can be invested in the IPO of a VCU, Debt or debt instrument of a VCU, Preferential allotment of equity shares but there is condition of 1 year lock-in period, etc.


It must be kept in mind that whatever the investment strategy chosen by the Foreign Venture Capital Investor and its life cycle must be communicated to the board before any investment is made in India.


Need of FVCI: India has tremendous potential for growth of knowledge based industry, and this potential is not limited to one sector of economy, some relevant areas are bio-technology, pharmaceuticals and drugs, telecommunication, education, food, agriculture, services etc. Due to the innovative ideas of many entrepreneurs, we can say India has inherent strength which reflects in its skilled and competitive manpower, its technology, research based skills, studying the market and all we need a proper environment investment and policy support, with this India can achieve growth and competitive global strength. There is huge gap between the capital requirements of technology and knowledge based start-ups and funding or investments available from conventional banks, reason being is that these business are new and there is high risk exposure, they are based on intangible assets such as human capital and Indian investors don’t want to lose their funds, from the point of view of the traditional banks, neither they have physical assets nor a low-risk business plan so we need a flourishing venture capital industry which can fill this gap.



Benefits of Investment in Start-ups to Foreigners:


  • Foreign investors are exempted from any pricing restrictions during entry and exit;
  • When the investee company goes public, the foreign investors are exempted from the condition of lock-in period;


  • Advantage of Population: India has a huge population, that means variety of taste and preferences, which is helpful for the start-ups to come up with new innovative ideas according to the demand of the people and it is less problematic to start a business in such a market and which promises to be a magnet for foreigners.


  • More control on Start-ups: The reason being is that foreign investment acts as an easy capital raise and technological investment for the start-ups, that’s why Indian Start-ups easily accept them. Due to the need of the capital, sometimes start-ups give away huge stakes in the company, which proved beneficial for the foreign investors. It gives them important decision making power, critical rights, return on the investment, control on the consumer market of the country.


  • Efficient Tax System: With respect to the tax on venture capital we must adhere to two sections, one is sec 10(23FB) of Income Tax Act, 1961, which says that when income of a person in a previous year is calculated, any kind of income of a venture capital fund or company in a VCU shall not be included, another section is sec 115(U), which says that if a person receive any income from the investment made in venture capital fund or company then such income shall be charged to income tax in the same method as if it were the income which received by the person had he made investment directly in the venture capital.

When these two sections are read together, they give the meaning that income received from investment by the fund or company is exempted from tax, but when the income is dispersed between the investors, it becomes taxable. In simple terms, income’s nature determines its tax liability. It says that dividend is free, when it is in the hands of the shareholders but it is subject to tax at the rate of 16.99% when a company is distributing the dividend. Otherwise, when shares of the investee company are sold, capital gain tax is also charged. The result is that there is no distinct tax exemption for FVCI. But it can take benefit of DTAA agreement like India has a agreement with Mauritius, and according to the article 13 of that treaty, when a resident of Mauritius make a transfer for Indian capital asset, any benefit from such transfer will be taxable only in Mauritius, this treaty give relief from double taxation.


  • Reduced Operational cost: The cost of internet, labour, salaries, infrastructure, etc is very low in India and India has very moderate tax policies as compared to the other countries which results in low cost of business operations. And it is one of the reasons why foreign investors invest in India.


  • Friendly Laws: The bill of Goods and Service Tax has made the cross border movement of products and some other business friendly law like Direct Tax Code Bill, Land Acquisition Bill, Companies Bill etc these made easy for the foreign investors to enter Indian market.


  • Initiatives of Government: 1. In December, 2020, the guidelines for Direct-to Home (DTH) services have been amended with the approval of Union Cabinet, because of these changes, 100% FDI in the DTH broadcasting services market is made possible;
  1. In June, 2021, the G-7 countries has attained a contract on taxing multinational firms, it says that the minimum global tax would be at least 15%, this move was made to boost the foreign direct investment in the country.
  2. In September, 2021, India and UK agreed to boost investment; this step will strengthen the bilateral ties for “Enhanced Trade Partnership”.



In the recent years, there has been an extraordinary growth in the foreign investment of India at a massive rate. India has come out as the fastest-growing start-up eco system and the third largest in USD 81.7 billion foreign investment in the financial year 2020-21. According to the World Bank of Ease of Doing Business 2020 survey, India has jumped 14 ranks and now its position is 63rd across the globe. All this could happen due to the foreign policies made by the India to attract the foreign companies and foreign investors and which resulted in growth of the Indian Start-ups, more job opportunities and wealth creation of the Indian economy.


But the investment by foreign investors is a double edged sword; foreign investment in the start-ups is also termed as “easy capital”, but it comes with a cost, there is always a catch. As India entrepreneur makes their business model which are attractive to foreign investors, this may result in giving more stake in the ownership, more critical rights in their businesses, taking troublesome obligations etc. Due to these control deals foreign investors get the full power to, monitor and manage portfolios of the companies, more control in decision making, implementing strategies which are foreign investors friendly. As investors’ main goal is to expand, so they have a opportunity to exit with a handsome gain, they don’t invest for a long period, so Indian promoters must be conscious of these factors before making foreign control deals.



  1. https://www.letscomply.com/foreign-investment-in-indian-start-up-and-its-advantages/
  2. https://www.investopedia.com/terms/s/start-up.asp
  3. https://www.ahlawatassociates.com/blog/a-primer-on-foreign-venture-capital-investments-in-india/
  4. https://www.fdi.finance/blog/foreign-investment-in-indian-start-ups/
  5. https://smefutures.com/key-promoter-considerations-foreign-investment-in-indian-start-ups/



The SISFS (Startup India Seed Fund Scheme) is one of several government initiatives targeted at supporting the startup business. For example, in February 2021, the Small Industries Development Bank of India (“SIDBI”) and Social Alpha announced the establishment of the “Swavalamban Divyangjan Assistive Tech Market Access fund,” which will award financial grants to assistive technology firms fostered by SIDBI. Similarly, the previous union budget extended till March 31, 2022 the deadline for startups to apply for a tax exemption under Section 80-IAC of the Income Tax Act of 1961.

For a startup to be eligible for the SISFS, the following criteria must be met:

  • It must be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) and must not have been in operation for more than two years at the time of application. Furthermore, Indian promoters must own at least 51 percent of the company.
  • It should have a business plan in place to produce a service or product that has the potential for scaling, market fit, and profitable commercialization.
  • Startups that use technology in their main service or product, as well as their distribution and business plan, are also eligible.
  • Startups that have not received financial help in excess of INR ten lakhs from any other government program/scheme are eligible.

If the aforementioned prerequisites are met, the authorized incubator will distribute the Seed Fund under the SISFS as follows:

  • A financial grant of up to INR Twenty Lakhs is available for prototype development, product trials, or Proof of Concept validation. The grant will be given in instalments dependent on achievement of certain criteria. Such milestones can include, among other things, product testing, prototype creation, and preparing a product for introduction in the relevant market.
  • Up to INR Fifty Lakhs in financial awards can be awarded to a company through convertible debentures, debt-linked securities, or debt for market entry, commercialization, or scaling up.


Problems associated with the SISFS

The SISFS Seed Fund is more likely to assist entrepreneurs in fields that have received less venture financing, such as education, e-commerce, tourism, and food technology. It is part of the government’s mission to not only promote current and future generations of entrepreneurs, but also to create a strong startup ecosystem that will generate jobs, especially in smaller and rural locations.

The programme would promote virtual incubation for businesses by developing an online infrastructure. This might broaden the scheme’s scope, allowing it to address the current pandemic issues. Simultaneously, the bureaucratic processes and stringent qualifying conditions of the scheme can make its execution difficult.


The fundamental issue with SISFS is that several features of the scheme’s implementation are ambiguous. For example, one of the startup eligibility requirements is that the “company must have a business idea to build a product or service with market fit, viable commercialization, and scope of scaling.”


The SISFS, on the other hand, makes no distinction between what defines “market fit” and “viable commercialization.” This could lead to a broader issue with the SISFS, in which the incubators and EAC have been given enormous discretionary power in selecting ‘suitable’ companies and incubators, respectively.


Similarly, the EAC has the authority to define the milestone levels for monitoring progress at its sole discretion. As a result, if the milestones are set too high, meeting the SISFS targets will be nearly impossible. Subsequent payments of funds to incubators and, eventually, Startups would come to a halt.


To summarize, the SISFS plan is now being welcomed by the startup industry and the media, but its successful implementation will be entirely dependent on the EAC, entrepreneurs, and incubators working in tandem, which remains to be seen.

Extending the scope of Section 233 to Startups

The Ministry of Corporate Affairs expanded the scope of Section 233 of the Companies Act, 2013 read with Rule 25 of the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016 to include a merger between a startup and another startup or a startup and a small company on February 1, 2021, via a gazette notification.

Section 233 deals with company fast track mergers. A fast-track merger, as the name implies, is a faster process that removes many phases in a regular merger. In this form of merger, the courts have no role to play, and the parties are not required to seek clearance from the NCLT.

The Ministry of Corporate Affairs expanded the scope of Section 233 of the Companies Act, 2013 in a gazette notification on February 1, 2021. Startups are now recognized corporations under Section 233 of the Companies Act, 2013 and Rule 25 of the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016 for the purpose of merging with the Central Government’s sanction.


This form of unique merger could decide the rate of economic recovery after the pandemic, given that the NLCT would be inundated with IBC cases, and could be particularly effective due to the benefits of ease of doing, money involved, and time invested with Rule 25 of Companies.

Advantages of Fastrack Merger

  • It is not required to request permission from the National Company Law Tribunal.
  • It is also not necessary to issue public advertisements.
  • The meeting has not been called by the court.
  • The administrative burden has been reduced.
  • The same effect as dissolution, but without the transferor corporation’s winding up process.
  • These types of mergers are both cost-effective and time-efficient.

SEBI Saving the start-up trading platform


There were numerous hurdles encountered by small businesses and startups were directly related to their description; not every company has the resources of a huge organization, especially a startup whose goal is innovation.

To be designated a startup for the purposes of a fast-track merger, a firm must meet all of the standards outlined in the Department for Promotion of Industry and Internal Trade’s notification of February 19th, 2019.The rigorous approach was proving to be a barrier for both start-ups and firms with low revenue/turnover. The same approach for each organization, regardless of size, was showing its age, especially during the pandemic, when businesses struggled.

The start-up culture in India is young and thriving, as evidenced by the fact that 14 of the country’s start-ups have reached Unicorn status, i.e., $1 billion in value, in just 7 months since the pandemic hit the Indian economy in 2021.


SEBI developed the Innovators Growth Platform (previously Called Institutional Trading Platform) in 2015 to list these start-ups, get visibility, and expand the brand presence of these start-ups in order to nurture them. SEBI’s objective was to create a trading platform specifically for start-ups, similar to the NASDAQ stock exchange.

While the Platform hasn’t experienced much success since its establishment, as no entity is currently registered on the IGP, SEBI hasn’t given up hope, as SEBI sought amendments to the IGP at the board meeting on March 25, 2021, which were informed on May 5, 2021 via two different notifications.


The rationale for SEBI’s active nature here is to access resources, i.e., potential investors eager to engage in a startup because it is an under-invested field. Only 9% (3436 out of 38,815) of active start-ups were able to raise additional funds after initial investment rounds.



The concept of mergers and acquisitions scares startups owing to the costly and time-consuming nature of the process, and a requirement of public offer notification for a mere 25 percent of shares ensured less interest; however, under the revised laws, it has now been boosted to 49 percent. To further safeguard interests, any change in control, whether direct or indirect, will henceforth result in an open offer.

SEBI has also simplified the delisting and migration process to the mainboard. A statement of explanation must be given to shareholders, and they must pass the exit by special resolution; it must also be passed by the Board of Directors at its meeting.

The goal of India becoming a hub for software start-ups seemed far-fetched a few years ago, but the success of numerous start-ups in becoming unicorns has increased trust in the Indian startup sector. The new restrictions are intended to enhance the government’s ease of doing business policy.


  1. Ministry of Commerce & Industry, ‘Prarambh: Startup India International Summit’, (15 JAN 2021 3:44PM by PIB Delhi), https://pib.gov.in/PressReleasePage.aspx?PRID=1688799.
  2. The Gazette of India, ‘Ministry of Corporate Affairs’, (1 FEB 2021 New Delhi), https://egazette.nic.in/WriteReadData/2021/224868.pdf
  3. 3. https://www.unicefinnovationfund.org/apply/unicef-innovation-fund-opportunity-tech-startups



It is been said that the India has the third largest ecosystem in this world after after the US and China and the pace of growth is keep increasing. The US tops the list with 396 unicorns, while China is at the second spot with 277 observed from the data from Hurun Research Institute. India’s unicorns are currently worth $168 billion. In the midst of the startup boom India took up the Unicorn Tally to 54 replacing UK to third place in the world.

What is Unicorn?

Unicorn is the term most closely associates with startups describing any privately held company that has touched the valuation of more than 1 billion dollars. Startups are the one which focus on proposing innovative solutions which sometimes creates entirely new business model like ride-hailing service UBER.

How many Unicorns does India Have?

In the August 2021 bulletin of RBI, It was observed that India has estimated 100 Unicorns. Ut of which 10 new ones created in 2019, 13 in 2020 and 3 a month in 2021. It has been observed that FinTechs, including e-commerce, have been leaders in the Indian Unicorn Landscape and make up about 30 percent of the value of the Indian Unicorn System.

However not only FinTech Sector, but also Indian startups in sector like education technology, food delivery and mobility have also gone unicorn.

The Next Rising Unicorns

Apart from Unicorns, the number of future unicorns called Gazelles and Cheetahs in India is also growing at an aggressive pace. Gazelle is startup founded after 2000 with the potential to go unicorn in two years with estimated valuation ranging from 500 million to 1 billion dollars. Whereas, Cheetahs may go Unicorn in four years with estimated valuation ranging from 200 million to 500 million dollars.

Benefits Given by Indian Government to Startups


  1. Recognition of Startups

Government had launched Startup India Scheme in the year 2016, to boost the domestic startup ecosystem. This scheme helps startup to register with the government and get recognised by the government and avail the benefits mentioned therein.


A startup registered with DPIIT that is Department for Promotion of Industry and Internal Trade enjoys the benefit across the range of laws and regulations along with fiscal and infrastructural support.



Till date, around 50000 startups have been recognised as startups by DPIIT, present across 623 districts with atleast one startup in each State and Union Territory. While Maharshtra, Karnataka, Uttar Pradesh and Gujarat has the highest thnumber of startups. Moreover, states and union territories also have announced specific policies to support them.


  1. Block Chain based validation framework.

Currently, Strartups need to make separate submission to regulators, intermediaries and authorities that increases not only the time related to compliance but also leads to duplication of efforts.


Therefore, in order to reduce the compliance burden on startups, The Indian government is focusing on making blockchain based validation frameworkthat could simplify the submission of documents in various agencies.


With the help of this framework, the government agencies can instantly access the documents for authentication and verification of documents available on the chain.


This framework will enable multiple agencies such as the Central Board of Direct Tax, banks and public sector undertakings to access, authenticate or approve documents and data available to all stakeholder on chain.


  1. Funding

On of the biggest challenge startup faces in its initial year is funding A startup may require funding for purposes such as prototype creation, product development, team hiring, working capital, legal and consulting services, raw materials and equipment, marketing and sales, and more.


This is where Indian Venture Capatalist comes into play. A venture capitalist is an investor that financial A VC is an investor that financially supports a startup that has the potential to reshape markets and grow rapidly in return for an equity stake. Apart from this, a Venture Capitalist also provides startups with mentorship and guidance at different stages of their journey to really unlock the company’s potential.


It has been observed that the top 10 Indian Venture Captalists have backed more than 420 ventures and participated in nearly 600 funding rounds till date and the numbers still keep increasing. Apart from Venture Capitalists, Startups can also avail the benefits of Alternative Investment funds in which The startups will be eligible for Rs.10000 crore funds of funds from the Alternative Investment Funds. Or Credit Guarantee Funds wherein The startups can avail Rs.2000 crore Credit Guarantee fund through the National Credit Guarantee Trust Company or SIDBI over 4 years. Provided, the startups have to register with DPIIT or can also avail the benefit of Start Up India Seed Funding Scheme.

Other Benefits for DPIIT Recognised Startups

  • Self-Certification:

After obtaining DPIIT Certificate of Recognition of Startup, the entity will be allow to self certify the compliance under environmental and labour laws.


  • Start-Up Patent Application:

The DPIIT recognized startup are required to pay only 80% of the fees on Patents, trademark, copyrights and design, and the fast-tracking of a patent application will be available for startups.


  • Easier Public Procurement Norms:

The DPIIT recognized startups will get an opportunity to list the product on Government e-Marketplace.


  • DPIIT recognized startups are exempted from submitting Earnest Money Deposit

Exemption from Prior Experience/Turnover is provided for Start-ups in all Central Government ministries and departments.


  • Easy winding up of Company:

According to the Insolvency and Bankruptcy Code, 2016, the company can be wound up within 90 days of applying for insolvency


  • Tax Exemptions

The startup can petition for tax exemption under section 80 IAC of the Income Tax Act after receiving the Certificate of Recognition.

Angel Tax Exemption is available to startups that have been recognised by the DPIIT. Furthermore, after receiving tax exemption approval, DPIIT-recognized startups are excused from paying income tax for three consecutive fiscal years out of the first ten years of operation..

Concession to Startups regarding labour laws


The Ministry of Labour & Employment has issued an advisory to the States/UTs/Central Labour Enforcement Agencies for a compliance regime based on self-certification and regulating inspections under various Labour Laws in order to promote the startup ecosystem in the country and incentivize entrepreneurs in setting up new start-up ventures and thus catalyse the creation of employment opportunities through them.

It has been suggested that if such start-ups provide self-declaration for compliance with nine labour regulations during the first year from the date of the start-up, there will be no inspection under these labour laws, wherever applicable. The Labour Laws to be covered under this are:

  • The Building and Other Constructions Workers’ (Regulation of Employment and Conditions of Service) Act, 1996
  • The Inter-State Migrant Workmen(Regulation of Employment and Conditions of Service) Act, 1979
  • The Payment of Gratuity Act, 1972
  • The Contract Labour (Regulation and Abolition) Act, 1970
  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • The Employees’ State Insurance Act, 1948

Such start-ups are required to file self-certified returns from the second year onwards, for a period of up to five years after the units are established, and will only be inspected if a credible and verifiable complaint of violation is filed in writing and approval has been obtained from higher authorities. The nine labour laws, included are:

  • The Industrial Disputes Act, 1947;
  • The Trade Unions Act, 1926;
  • The Building and Other Constructions Workers’ (Regulation of Employment and Conditions of Service) Act, 1996;
  • The Industrial Employment (Standing Orders) Act, 1946;
  • The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979;
  • The Payment of Gratuity Act, 1972;
  • The Contract Labour (Regulation and Abolition) Act, 1970;
  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952; and
  • The Employees’ State Insurance Act, 1948.

State and Union Territory Startup Policies

A state’s startup policy is key in providing startups with the necessary finance, mentorship, and market access support they need to thrive as important revenue and job-creating contributors to the state’s economy. It also includes provisions to incentivize important startup stakeholders such as incubators and institutes of higher education, among others, in order to encourage India’s startup ecosystem’s holistic development. The Startup India team assists states with the creation and implementation of respective startup policies.

  • A specialised Startup Policy is now in place in 30 of the 36 states and union territories.
  • After the start of the Startup India initiative in 2016, 26 of these Startup Policies were produced.
  • Each of the 36 states and union territories has at least one DPIIT-recognized startup, and each of the 623 districts has at least one DPIIT-recognized startup.

Apart from State and Union Territory policies, Central government of India has given around 124 more scheme for the benefits of startup which one can get from the startupindia.gov.in website.

India Becoming the Next Tech Hub

India as a nation ranks highly among the countries and jurisdictions that show the most promise developing innovative technologies. The Fact that India ranks high, for which, the credit goes to few handfuls of cities that showcased tremendous potential and room for growth.

New computer and software policies were established in India in 1984, and hardware and software imports and exports were liberalised. This made it possible for companies like Wipro and Infosys to be established in Bengaluru and hire Indian programmers. Ties were also formed with American firms that provided superior systems that Indian software firms benefited greatly from. Texas Instruments Inc. was the first multinational corporation to establish a development centre in Bengaluru in 1985, setting the path for many MNCs to follow in the years and decades that followed.

As trade tensions between the United States and China continue, India has an opportunity to attract technology-led investment as a viable option. Furthermore, increased government R&D investment and improved skilled labour quality could put India in a better position to compete with China for technology-driven market domination.


While foreign investors have previously been hesitant to invest in Indian companies due to the country’s high risk rating, India’s rapidly growing start-up ecosystem, combined with strong policy reforms, improved investment facilitation, and increased ease of doing business, has resulted in over $80 billion in foreign investment in the 2020-21 fiscal year. Domestic investment is also increasing, as Indian businesses become more aware of the opportunities presented by the country’s rapid digital transformation. Thus one can rightly say that the best place for founder to startup their place is India.




The Covid 19 pandemic has been devastating for the whole world and has resulted in countless businesses getting closed down throughout the world. What is not to be forgotten however is that every crisis brings opportunities with itself for some and misery for others. Startups in general, have benefitted a lot from the pandemic. Indian startups have also been the beneficiaries of the pandemic. This pandemic has acted as a catalyst for biotech startups to become front-line warriors for a long-term fight against pandemics and endemics. We have all come to realize the importance of vaccines and other medical products like ventilators and PPE kits in this pandemic. India, in particular, had to learn this lesson a very harsh way. It has put a focus on biotech, the pharmaceutical industry, and the wider healthcare domain. More importantly, it has put a spotlight on the need for innovative products. India is home to one of the fastest growing startup ecosystems in the world. Biotech startups have to take the lead to keep us prepared for any such events in the future and also drive innovation at the same time.


Things working in favour for India

There are numerous factors which are unique to India and can help the biotech sector grow leaps and bounds if utilized well. Some of these factors are discussed below.

A huge population often works against the interests of the country but not if that population is young and vibrant. India has the advantage of having 50% of its 1.3 billion people in the age bracket of less than 25. This means that there is a massive untapped potential in India which can be used to develop a big biotechnology sector.  We have a large pool of young workforce and we need them to be reasonably skilled so that they can contribute to the growth of this sector. There are a large number of scientists and engineers which can make this growth a very achievable target. It will also be a big step towards achieving self sustainability, something which has been stressed by the leaders of our country a lot in the recent times.

Another big advantage that India has when it comes to the biotechnology sector is the  infrastructural arrangements. Under the Union Budget 2021-22, the government has announced the plans to set up a total of 9 biosafety level 3 laboratories through Pradhan Mantri Atma Nirbhar Swasth Bharat Yojna.[i] This will certainly provide a much needed impetus for the growth of the sector. To go with this, 9 DBT supported biotechnology parks and 60 BIRAC supported bio incubators will go a long way in ensuring that there is no shortage of infrastructure when the time comes. It would be a herculean task to achieve success in this sector without a good infrastructure and it is good to see the government taking steps to ensure that this problem does not arise at all.

The policy support is one more factor which is very crucial for any objective to be achieved. A 100% FDI under automatic route for greenfield projects for pharmaceuticals is a great start for sure. While 74% FDI is permitted for under automatic route for brownfield projects, 100% FDI under government route is permitted for brownfield investments. A further 100% FDI under automatic route has also been provided for the manufacturing of medical devices. Medical devices can be extremely crucial when a public emergency breaks out and we are very familiar with this fact. In light of these facts, these policy decisions make a lot more sense and are a step into the right direction.

One more factor that makes India a ground for biotechnology growth is that the patient pool is expected to rise in India in the coming decades by a whopping 20%. [ii]This will mainly be due to the increase in age of the young population that India currently has. In the next 10 years, there will also be entry of a number of new diseases previously not prevalent in India because of the lifestyle and dietary changes of the Indians.


  Current situation of Biotechnology Sector in India


The Indian biotech industry comprises of over 5,000 companies (760 core companies and 4,240 start-ups) and is aligned around five major segments: Bio Pharma, Bio Agriculture, Bio Industrial, and combined segment of Bio Services comprising of Bio IT, CROs, and Research Services. The sector plays a key role in the global vaccine market, as the leader in the global supply of DPT, BCG, and measles vaccines, and is also a key contributor of 70% of WHO’s vaccines (essential Immunization Schedule).

Researches have shown that the Indian biotech industry is destined to climb and climb in the upcoming years. India is among the top 12 destinations for biotechnology in the world, with approximately 3% share if the global biotechnology industry. The sector is a key contributor to India’s vision of reaching a $ 5 Trillion economy by 2024.

The Indian biotechnology industry that was valued at 70 billion dollars in 2020, is expected to reach 150 billion dollars by 2025. That is a rise of more than 100%. Over 4237+ biotech startups, expected to reach 10,000 by 2025. India, currently has 760+ core biotech companies and a massive 200+ Biotech products.

The rising contribution of this sector to national GDP (2.7% in 2020 against 2.2% in 2019 can not be overlooked at all). India led the world into Biosimilar Innovation and  became the 1st country to approve and market a biosimilar in 2000 with over 98 biosimilar approved (till September 2019), which is the highest in the world.


                            Big players in the sector

One of the biggest and most popular players in the Indian biotechnology sector is Serum Institute of India Pvt Ltd. It has strengthened its position at the top by playing a very important role during the Covid pandemic by manufacturing vaccines to be administered in India. It was not an easy task but was done reasonably well by the institute. Serum Institute of India is ranked as India’s No. 1 biotechnology company, manufacturing highly specialized life saving biologicals like vaccines using cutting edge genetic and cell based technologies, antisera and other medical specialties. Serum Institute of India Pvt. Ltd. is now the world’s largest vaccine manufacturer by number of doses produced and sold globally (more than 1.5 billion doses) which includes Polio vaccine as well as Diphtheria, Tetanus, Pertussis, Hib, BCG, r-Hepatitis B, Measles, Mumps and Rubella vaccines. It is estimated that about 65% of the children in the world receive at least one vaccine manufactured by Serum Institute. Vaccines manufactured by the Serum Institute are accredited by the World Health Organization, Geneva and are being used in around 170 countries across the globe in their national immunization programs, saving millions of lives throughout the world.

Panacea Biotec is another big name in the Indian biotechnology sector. Panacea Biotec is an Innovation driven Biotechnology company doing Research and Development, Manufacturing, Sales, Distribution and Marketing of Pharmaceuticals, Vaccines and Biosimilar.

Panacea Biotec was set up in the year 1984, under the name of Panacea Drugs Private  Limited with a commitment to make Innovative Products Affordable and Accessible to the masses. It got publically listed on Indian National Stock Exchanges in September 1995 as Panacea Biotec Ltd. It is currently witnessing a period of expansion and is likely to grow in the coming years. Panacea Biotec is one of the largest Vaccine Manufacturing company  in India and is well acknowledged by the UN Health Agencies in partnering the Polio eradication initiative with supplies of millions of doses of WHO Pre-qualified Polio vaccine.[iii]

One more name that can not be missed when talking about the sector in India is Biocon Ltd. A private entity established in the year 1978 with a corporate office in Bangalore, India, is one of the most remarkable companies in the industry at present. The company has been leading with a brilliant research and development areas. Biocon has also managed to create medicines for many ailments with the help of its abled scientists who aim to create the best solution for various prevailing diseases. The company has been trusted by the people across the nation, hence, making the company among the top three in the industry.

SIRO Clinpharm is another company that has existed for a very long time in this sector. The company was established in the year 1996, with a corporate office in Thane, India. The company has been moving forward with the aim of being the top manufacturer in the nation. With its new discoveries, it has also made it possible for the dream to be on the top to get accomplished within no time. The company apart from working in the field of biotechnology has also expanded its roots to the drug development sector of India.



As we can clearly see, the road is set for India to take the lead in the biotechnology sector and also become a leader in innovation and research. It is upon the government and the entrepreneurs to now take the right steps and help the country’s economy grow and at the same time see the country become self sustainable. India is also one of the first countries to have a department dedicated to Biotechnology. Moreover, the Department has also set up BIRAC (Biotechnology Industry Research Assistance Council) which is a not-for-profit agency to strengthen and empower emerging Biotechnology enterprises to undertake strategic research and innovation, by handholding them from ideation to the commercialization of their products/ technologies. This, coupled with the relaxations provided in foreign investments into various medical products, will go a long way into ensuring that India has a good foundation to build upon.

The startup ecosystem has seen a steady growth in India in the last few years. Entrepreneurs are willing to take more risks and have been able to convince investors of investing in their ideas. Foreign investment has been flowing into Indian startups. Biotechnology is a sector with the potential for a lot of growth and it will be great to see India’s response to this opportunity. The policy makers and risk takers have to combine to take full advantage of this opportunity and enable India to become a net exporter of affordable medical kits, devices and vaccines through policy and funding and removing infrastructural roadblocks.



[i] https://www.investindia.gov.in/sector/biotechnology

[ii] https://www.ibef.org/industry/biotechnology-india/infographic

[iii] https://www.inventiva.co.in/trends/ishikasharma/biotechnology-companies/




India has had a long history of toy manufacturing going all the way back to the Indus Valley Civilization when the toys used to be made from wood, mud and stones. Around 8000 years later, this toy making tradition seems to have found a new lease of life driven by huge demand and technological advancement. Even before Covid 19 struck, Indian toy industry had started showing signs of improvement and innovation. There is a change in the type of toys that are in demand now, moving away from the traditional cloth and wooden toys to more electronic versions of the same. With a massive growing population and a lot of technological innovation happening, Indian toy Startups have numerous factors in their favor going forward.


Driving factors for Toy Start-ups in India


Prime Minister’s Mann Ki Baat broadcast in August 2020 was an important moment for this sector. He asked the young Indian entrepreneurs to strive to make India world’s toy hub using his popular “Vocal for Local” slogan which has gained even more importance ever since the pandemic broke out and the resultant lockdowns causing supply chain disruptions, primarily from China. Talking about the small share of India in the global toy industry worth 7 lakh crore, he stressed on the need to work to increase this. The Prime Minister urged the young entrepreneurs to make toys in India and about India.

However, even apart from the call by the PM, there have been factors which have driven the indigenous manufacture of toys. Some of them are:

(1)India has a huge population base of around 1.3 billion people and almost half of that population falls in the age group of less than 25 years. This means a lot of potential for toys and games industry and a large market base to make use of.

(2)The incomes of average Indian household have risen steadily over the past few decades resulting in a rise in the disposable income. A good rate of GDP growth has ensured this and it has been observed that people are more willing to spend now than they were a few decades ago. The change in spending habits presents another good opportunity to the toy and gaming sector of India.

(3)The change in spending patterns has also meant that people are willing to spend more on the modern technological toys and games than traditional wooden and mechanical toys. This bodes well for young entrepreneurs who want to make use of technology in their businesses.

(4)A large variety of toys are now available in the market and people have a very diverse range of types and prices to choose from. The families can buy the toys or games according to their economic capabilities and still get a very good deal. Puzzles, dolls, building toys, war tanks etc. are available at very low and very high prices making them affordable for every income group.

(5)The growth and penetration of internet has also meant that another distribution channel, namely online, has opened up new avenues for those involved in toy businesses. Like every other business, the toy and games sector has also benefitted immensely from online distribution.


Players in Indian Toy industry


The emerging demand has motivated the toy companies to manufacture more and new toys and games and be more innovative.

Chennai based Ariro has all wood toys made for children under 8 years of age. These types of toys pose very little risk to children and the toys are not very complex so the children can play and enjoy . General Knowledge based card games by Skillmatics have also become very popular and can be enjoyed by the whole family. It can turn out to be a great learning exercise where kids get to know more about animal kingdom, ports, cities etc.

Ariro has seen phenomenal growth ever since the pandemic hit. Their toys are tailormade for demands by parents of keeping their children away from screens and technology. Their wooden toys keep the children busy while also ensuring that they are also exercising. Their 16 categories of products range from stackers and nesters helping children learn about shapes. They are looking to expand more in the upcoming years.Funvention, on the other hand, is about plants and seeds.  Their kit lets kids set up a germination stand where easy to plant and easy to grow crops can be grown and these activities of the children can be monitored by the parents of the children. This is a unique concept and is getting popular with kids. The owners c,liam that sales have skyrocketed in the last year or so.

Apart from this, there has been a recent rise in toy companies focusing on ethnic toys and Indian history. Startups like Mumbai based Toiing, Bengaluru based Vrnam and Chennai based Kreeda games are the prominent ones providing kids a slice of their own history through toys and games. This is in sync with the PM’s call to make more toys about India and its rich heritage. Toyiing, for instance, has a lot of do-it-yourself toys to offer. Many of these teach kids about Indian mythology and have Ganesha, Krishna and Ravan.

Kreeda games is looking to do something similar albeit in a different manner. They are attempting to familiarize Indian kids with mythology through games featuring Jambavan and Kumbhakarna. Games like Battle of Lanka and Search for Sita have added value because of the knowledge they give to the kids.

Founder of Varnam states that, wooden toys have always been a hit, but parents have been skeptical nowadays because of poor paint or unclean finishing. Varnam tries to correct this by making child friendly baby walkers and stackable dolls. Kreeda is also planning to launch a very ancient game soon. All these developments make the Indian toy sector very interesting and a thing to watch out for in the coming years.[i]

With the big players like Lego, Hot Wheels, Mattel Inc and Mega blocks still going strong and retaining their positions as top players in the Indian toy market, it is going to be very interesting to see if and how the upcoming Indian manufacturers can compete with these global giants.


Toy Startups raising money



In 2018, New Delhi based, Smartivity Labs announced that it had successfully raised 2 million dollars from Lucky Securities and others. Smartivity is a STEM edtech toys company and the investors had confidence in its growth. The investors thought that technology in toys is a big revolution and is going to build a force of tech savvy kids which the parents would love.[ii]

Skillmatics, in 2021, raised 6 million dollars in a series A funding round ked by Sequoia capital and others. Founded in 2017, this startup has seen a lot of growth over the years and sold 3 million toys from approximately 15 thousand retail stores. While they have primarily been limited to North America and India, they said that they will use these funds to expand their reach and operations into other parts of the world. Funds raised will be utilized in strengthening the online and offline presence in US as well. Affordability is the edge with Skillmatics, since they have priced their products in a range of INR 299 to 999.

PlayShifu, an early learning toy company, raised a whopping 17 million dollars from Inventus Capital and Inflexor Ventures joined in as a new investor confirming the growing confidence of investors in Indian toy sector. The company has seen its user base increase from 250,000 in 2019 to 600,000 in 2020.It attempts to reduce the screen time of children and has, for this reason, gained popularity among parents.[iii]

Imagimake Play Solutions, a startup in the toys and gaming sector, has raised 4.4 crore rupees in a pre series A funding round from Roha investment. Imagimake provides an innovative range of products that cater to art & hobby, educational toys, puzzles and 3D model-making sets, facilitating holistic child development. It has established itself as one of the leading players when it comes to artist supplies and construction games and is only expected to grow more from here.


Procedure for setting up a Toy Start-up in India

Quality Control order has been issued by the Department for Promotion of Industry and Internal Trade (DPIIT), for standardization and quality adherence of Toys. The order came into effect from 1st January, 2021. It exempts goods manufactured & sold by artisans registered with Development Commissioner (Handicrafts) and also exempts products registered as Geographical Indications.[iv]The Toy Quality Control order, which came into effect from January 1, 2021, requires all toys and materials designed or intended for use in play by children below 14 years of age to be certified by the Bureau of Indian standards (BIS) and therefore requires all toy manufacturers to comply with BIS to receive the certification. The new QCO also requires all toymakers to set up quality control labs to test their toys, and then have them inspected by BIS officials.

The purpose of introducing this Quality Control Order is to ensure safety of children and is also in sync with the government policy of keeping non-essential import items under check. The critical Indian Safety Standards for toy in the Toys (Quality Control) Order are summarized below:

l.No Indian Standards Details
1 IS 9873 (Part 1): 2019 Mechanical and Physical Property
2 IS 9873 (Part 2): 2017 Flammability
3 IS 9873 (Part 3): 2017 Migration of Certain Elements
4 IS 9873 (Part 4): 2017 Slides, Swings and Similar Activity Toy for Outdoor and Indoor  Domestic Use
5 IS 9873 (Part 7): 2017 Finger Paints
6 IS 9873 (Part 9): 2017 Certain Phthalate Esters in Toy and Children’s Product
7 IS 15644:2006, reaffirmed the year 2016 Safety of Electric Toy


You can choose to enlist with the Startup India Program. Being a part of the Startup India Program entitles you to get funds with a lot more ease and also get some tax benefits for your startup, all of which will help you get through the initial difficult years. An entity shall be considered a startup if:-

(1)   It has been incorporated either as a Partnership firm or a  Limited Liability Partnership or a Private Limited Company.

(2)   10 years have not passed since the incorporation.

(3)   If the turnover of the entity for any of the financial years has not crossed INR 100 crores.

(4)   If the entity is working towards any innovation or is a scalable operation capable of wealth creation.


To reiterate, the toys and gaming industry is set to boom in India in the upcoming years. If the government policies remain favorable, it can be a very lucrative business choice for many young entrepreneurs. We have already seen how the confidence of investors has been growing and they are willing to invest big amounts. Part of the reason of this growing confidence is the innovation of the new startups and the large untapped market to explore in India.

With a mix of technology and traditionalism, toy start-ups have found the perfect recipe to succeed in India. The affordability of these toys gives an added incentive to the parents to buy these toys considering a huge middle class in India. Foreign giant corporations have enjoyed success in this sector for a long time owing to the technological edge and the funds they have had at their disposal. Slowly, but surely, this is changing for the better for Indian manufacturers and it can be a great time to take the initiative and enter the industry.







Every entrepreneur wants to see their start-up succeed, but the success can send the entrepreneur to one or different direction. When entrepreneur want their small company grow into one that is larger and better able to serve more consumers, they often choose to go public through IPO. In India not only Indian Tech start-ups are going public but almost every start-up is getting in the waiting list to go public.

What is an IPO?



IPO stands for Initial Public offering. In an IPO, a privately owned company lists its shares on a stock exchange, making them available for purchase by the general public. The company seek IPO either to raise money for their financial needs or trying to expand or just paying its debts.


IPO Risk that start-ups need to consider.



In order to go public, start-ups are also required to focus on Pre IPO imperatives. It does not only involve operational and financial risk but also involves regulatory risk, legal risk, code of conduct risk, risk around communication and investor relationship, and climate and reputational risk.

Furthermore, when a company takes IPO routes, there are chances that it gets exposed to risks such as dissatisfied shareholders, confidentiality and trade secret concerns, insider trading by the directors, new stakeholders constantly judging the company’s performance, among others.

While subscribing to IPO, investors decision is based on Draft Red Herring Prospectus presented by the company. In case if there is any misleading statement present in draft red herring prospectus, or even a promise which later become difficult to attain can lead to various challenges. The Zomato’s draft red herring prospectus showed that its delivery cost per order came down to Rs 45 in the first nine months of FY20 from Rs 65 in FY19. But to sustain this improvement won’t be easy as its gains volume.

Process of getting an IPO

  • The company goes through underwriting where investment bankers raise capital from investors on behalf of corporation
  • Preparation of registration statement along with the draft prospectus known as Red Herring Prospectus which involves definition, risk factors, use of proceeds, industry description, business description, management, financial description, and legal and other information.
  • The market regulator SEBI hen verifies the document.
  • Make Application to the Stock Exchange for floating its initial issue
  • Before an IPO opens to the public, the company endeavours to create a buzz in the market by roadshows. Over a period of two weeks, the executives and staff of the company will advertise the impending IPO across the country.
  • The company can now initiate pricing of IPO either through Fixed Price IPO or by Book Binding Offering. In the case of Fixed Price Offering, the price of the company’s stocks is announced in advance. In the event of Book Binding Offering, a price range of 20% is announced, following which investors can place their bids within the price bracket.
  • Once the IPO price is finalised, the company along with the underwriters will determine the number of shares to be allotted to each investor.

Regulatory environment

The Securities and Exchange Board of India (SEBI) has relaxed a number of norms to make it easier for start-ups to get listed on Indian exchanges. Earlier this year, SEBI reduced the time that early-stage investors need to hold 25 per cent of the pre-issue capital to one years from two years earlier. SEBI also amended regulations which previously barred start-ups that are going public from making discretionary allotments to allow start-ups to allocate up to 60% of the issue size of the IPO to an eligible investor subject to a lock-in period of 30 days on such shares.


  • Fund Raising

The main reason for start-ups to file an IPO is the fund raising. The Nykaa debut price was at a 79.4 per cent premium to the initial public offering (IPO) price of ₹ 1,125, giving the company a valuation of ₹ 95,437 crore.

  • Publicity and Credibility

When a company go public, it not only receives a great deal of attention but also receive credibility. An IPO provides exposure to the public to come into spotlight. To complete an IPO process, the company needs to go immense scrutiny to ensure what they are reporting about themselves is correct. This scrutiny, combined with many individuals’ tendencies to trust public companies more, can lead to increased credibility for a company and its products.

  • Exit Opportunity

An initial public offering is a significant exit opportunity for stakeholders, whereby they can potentially receive massive amounts of money, or, at the very least, liquefy the capital they currently have tied up in the company.

  • Reduce overall cost of capital

In order to raise capital in business, companies often have to pay higher interest rates to receive loans from banks or give up ownership to receive funds from investors. However, IPO lessen the difficulty of receiving additional capital significantly.

  • Stock as a means of payment.

Choosing to go public also allows the use of publicly traded stock as a means of payment. While a private company has the ability to use its stock as a form of payment, but it is only valuable if a favourable exit opportunity arises. However, on the other hand, public stock is essentially a form of currency that can be bought and sold at a market price at any moment.



  • Additional Regulatory Requirements and Disclosures

Public companies are required to file their financial statements every year which can be burdensome and costly since audit committee and various other committee are also required.

  • Market Pressure

Founders tend to have a long-term view, with a vision of what their company will look like years from the present and how it will impact the world. The stock market, on the other hand, has a very short-term, profit-driven view.

  • Potential Loss of Control

There is a chance that founder may lose control of his/her company. Going public means receiving considerable amounts of money from public shareholders. Since shareholders are the ultimate owner of the company, the company has to act in the best interest of the shareholder even it is contrary to the interest of the founder. If shareholders feel the company is not operating in a way that will help them make money, they will force the company through shareholder votes to appoint new leadership.

  • Transaction Cost

The IPO transaction process comes at a hefty cost. The largest cost of a public offering is underwriter fees.


List of IPO bound start-ups

There are numerous examples of start-ups that came up with IPO such as Zomato, BYJU’S, Delhivery, LIC, Policy Bazaar, Freshworks, Pepperfry, Flipkart, Nykaa, Bajaj Energy.

Amid the rush over companies coming up with an IPO, Leading Private health insurer Star Health and Allied Insurance IPO will also be open up.


Option of Direct Listing



Many tech companies are opting for direct listing rather than going through an IPO. A direct listing is a liquidity event that does not fill the company’s pocket with cash. In the direct listing instead of company itself, company’s stockholder sells existing shares directly to the public. Instead of an underwriter who determines the price as with an IPO, in a direct listing the company hires a financial advisor who works in conjunction with the stock exchange to establish the opening price, based on buy and sell orders.

A direct listing does not have a lock-up period because it is based on shareholders selling their holdings.  Only outstanding shares held by existing investors, promoters and any employees can be sold directly to the public. In other words, a direct listing allows the transfer of ownership from the company’s private investors to public investors, without raising new capital.

Direct Listing in India

Direct Listing is a process through which a company which is already listed on other stock exchange/s approaches BSE for listing of its equity shares. The companies fulfilling the eligibility criteria prescribed by the Exchange; from time to time; are listed on the Exchange.

Presently at BSE, Direct Listing is broadly divided into three categories

  • Companies which are listed with Nationwide Stock Exchange with average daily turnover greater than Rs 500 crores in equity segment
  • Companies which are listed with Recognised Stock Exchanges with average daily turnover less than Rs 500 crores in equity segment
  • Companies whose names are appearing on Dissemination Board of Nationwide Stock Exchanges

Benefits of direct listing.

  • No lock up period
  • Offers liquidity to existing shareholder by which they can sell their shares freely
  • Absence of underwriting process that makes it less costly than that for an IPO
  • Avoid the indirect cost of selling shares at a discount
  • Stock price is based on market demand.
  • Increased visibility
  • Access to vast network of BSE Trading Members

Why some companies opt for direct listing

Companies who opt for direct listing are not necessarily looking for capital. Instead, they aspire for other benefits stemming from being a publicly traded company including boosting liquidity for their existing stockholders.

Companies also opt direct listing for the purpose of avoiding the promotional costs of an IPO. In addition, the direct listing is much quicker process and entails lighter regulatory scrutiny. By going this route, the founders are able to implement more restriction on voting power without the requirement rigorous IPO process.

Companies best suited for direct listing

Companies which are consumer facing with strong brand presence having a business model that is easily understandable and do not need great amount of capital are the only companies best suitable for direct listing.

For example, Slack and Spotify, which went public through direct listing in 2019 and 2018, respectively, enjoyed solid reputations in the market beforehand. Both were broadly used, and the way they made money was easy to comprehend. These factors jointly increased the number of people interested in investing in the companies.

Challenges faced by FinTech firms when sets for an IPO

The year 2021 has brought an opportune for fintech firms to set for an IPO. However, this IPO bound start-ups faced unique challenges in terms of building public confidence into respective model, diluting foreign ownership and working under tighter scrutiny by multiple financial regulators. Moreover, After Government’s fresh FDI rules last year post Indo-Sino border skirmish, the Indian Fintech with Chinese funding will face hardship in raising private capital.


In the emerging market, Indian start-up sector has seen a flurry of IPOs in 2021. A key reason for Indian firms going for IPOs is the perception of a large appetite for investment in India’s firms among global institutional investors. However, IPO may or may not be the right direction for your company. IPO come up with the host of advantages and disadvantages. This paper only provides description of IPO bound start up and its alternative and solely for the purpose of spreading awareness. Readers are requested to consult their lawyers or can also connect to @https://dastawezz.com/



  1. https://www.livemint.com/news/india/sebi-makes-it-easier-for-start-ups-to-list-in-india-11616688386639.html
  2. https://www.cnbctv18.com/startup/why-startup-ipo-can-be-a-good-bet-11065182.htm
  3. https://indianexpress.com/article/explained/paytm-zomato-nykaa-pharmeasy-tech-startups-ipos-7621886/
  4. https://escalon.services/blog/why-some-tech-startups-are-turning-to-the-direct-listing-instead-of-the-ipo/
  5. https://www.forbes.com/sites/forbestechcouncil/2021/04/16/growing-startups-ma-go-public-or-stay-private/?sh=7b77b9fa4065
  6. https://startuptalky.com/why-indian-startups-going-public/
  7. https://www.moneycontrol.com/news/business/ipo/zomato-ipo-four-challenges-food-delivery-company-faces-7167381.html
  8. https://www.indiainfoline.com/ipo-guide/ipo-process-in-india
  9. https://economictimes.indiatimes.com/markets/stocks/news/why-startups-will-keep-the-ipo-market-buzzing/articleshow/86725658.cms?from=mdr
  10. https://www.bseindia.com/Static/about/Direct_Listing_on_BSE.aspx
  11. https://www.ipohub.org/ipo-advantages-disadvantages/
  12. https://economictimes.indiatimes.com/tech/startups/why-ipo-bound-fintech-startups-should-have-one-eye-on-their-us-counterparts/articleshow/87719465.cms?from=mdr



What is Arbitration?

Arbitration is a process to help parties resolve a dispute and come to an agreement. Arbitration is one of several forms of ADR designed to be cheaper, faster, and less formal than litigation, or going to court to try and settle the matter. In an arbitration, the disputing parties present arguments and evidence to an independent and impartial third party – a dispute resolution practitioner known as an arbitrator – who makes a determination. Similar to court, this arbitrator’s decision is binding.1

The main reason why many businesses including well established businesses opt for arbitration in the first place instead of litigation is that arbitration is a faster and more flexible approach towards resolving a dispute. Also, it ideally ensures that both parties are made to understand what a particular outcome of an arbitration process is and why such outcome is concluded. Essentially arbitration is an out-of-court-settlement procedure that enables both parties to a dispute to resolve their dispute faster without spending a lot of time and money on litigation.

As such, startups having no or little money may take advantage of this procedure. It will help them get many disputes resolved without having to take the hassles of litigation which includes extensive paperwork as well as a lot of expenditure of money and is time consuming as well.



  Arbitration Process


The following is the process that is usually followed in arbitration12:

  1.     Filing and Initiation: An arbitration case begins when one party submits a Demand for Arbitration to the AAA. The other party (the respondent) is notified by the AAA and a deadline is set for a response.
  2.     Arbitrator Selection: The AAA works with the parties to identify and select an arbitration based on the criteria determined by the parties.
  3.     Preliminary Hearing: The arbitrator conducts a preliminary hearing with the parties, to discuss the issues in the case and procedural matters, such as witnesses, depositions, sharing information, and other matters.
  4.     Information Exchange and Preparation: The parties then prepare for presentations and exchange information.
  5.     Hearings: At the hearing, both parties may present testimony and evidence to the arbitrator. Unless the case is very complex, this is usually the only hearing before the arbitrator.
  6.     Post-Hearing Submissions: After the hearing, both parties may present additional documentation, as allowed by the arbitrator.
  7.     The Award: Finally, the arbitrator closes the record on the case and issues a decision, including an award, if applicable.


    Where can arbitration be held?

The venues where arbitration can be held are usually specified within the contract of the disputing parties itself. Nonetheless, according to the type of contract, the nature of transaction entered into, the business of the parties and the jurisdiction, arbitration may be held at places according to the type of arbitration purported within the contract itself. As such, the following are the various types of arbitration proceedings. These effect the place of arbitration accordingly.

  1.     Domestic Arbitration
  2.     International Arbitration
  3.     International Commercial Arbitration
  4.     Institutional arbitration
  5.     Ad hoc arbitration
  6.     Fast track arbitration
  7.     Voluntary & Mandatory Arbitration
  8.     Binding & Non-Binding Arbitration


    Current Domestic Scenario of Arbitration

Arbitration in India is regulated by the Arbitration and Conciliation Act, 1996. The Act is based on the 1985 UNCITRAL (The United Nations Commission on International Trade Law) Model Law on International Commercial Arbitration and the UNCITRAL Arbitration Rules 1976.4The history of Arbitration dates back to the British Era. The last Arbitration Law that was codified during that time was the Indian Arbitration Act, 1940. The Indian Arbitration Act, 1940 dealt solely with the previously uncodified body of law concerning domestic arbitration proceedings. The objective of the 1940 act was to consolidate and amend the law relating to arbitration.

Thereafter, after the adoption of the UNCITRAL model of the International Arbitration Law, the Arbitration and Conciliation Act, 1996 was enacted. The Arbitration & Conciliation Act, 1996 repeals the Arbitration Act, 1940; the Arbitration (Protocol and Convention) Act, 1937; and the Foreign Awards (Recognition and Enforcement) Act, 1961 and reformulates the law in one consolidated statue. It also seek to amend and consolidate the law relating to domestic arbitration, international arbitration and the enforcement of foreign arbitral awards.5

As per Section 5 of the Arbitration and Conciliation Act, 1996 the court cannot interfere in the arbitration proceeding except wherein provided by the act in the following situations:

  1.     Where an arbitrator needs to be appointed when the parties cannot appoint a mutually independent arbitrator.
  2.     In cases of taking the shreds of evidence.
  3.     Where the court is ruling in the cases as the arbitrator is terminated due to incapacity or other sufficient reasons mentioned under the Act.

Section 8 is a companion section which says “where a party has approached the judicial court to dissolve a dispute and it is exclusively to be trailed by the arbitrator, then the court must direct the person to start the arbitration proceeding first without any delay and may come later to the court when arbitration award has been made.”6


    Frequent Issues in Arbitration

Arbitration is not an option to choose if problems are to be avoided totally. Arbitration faces some issues such as:

  1.     Delay due to clashing dates for the legal representatives of both the parties.
  2.     Delay due to non-availability of Arbitrator.
  3.     Issues relating to administration and management of arbitral institutions.7
  4.     There is a small scope of appeal in the arbitration award. The very fact that there is less scope of appeal in awards is one of the most glaring disadvantages of arbitration. whenever there is a problem with the award, there would be no scope of appeal or correction.8
  5.     In some countries, there are different statutes for domestic and international arbitration. This makes it difficult to ascertain the applicability of the laws relating to international arbitration.9
  6.     One of the major issues faced during arbitration is the cross-cultural language barrier. There is always a discrepancy in the language and culture of the two regions. It becomes very difficult to bridge the gap and come to a unified solution.10
  7.     There is no jury to decide the outcome of a dispute, but rather, the decision rests solely in the hands of the arbitrators, whom usually consist of one individual or a panel of three persons, that may or may not be able to remain entirely impartial during all proceedings regarding all matters.11



In a country like India, where there is a high pendency of cases and the Courts are usually taking up only urgent matters due to the pandemic, it becomes a very attractive option for many disputing parties to opt for arbitration instead of going to the Court. Also, recently the Legislature passed an Act establishing an International Hub for Arbitration at New Delhi. Thus, the Government is also inclined to encourage arbitration matters. As such, going for arbitration becomes even more reasonable.


  1.     https://biztechlawyers.com/arbitration/.
  2.     https://en.wikipedia.org/wiki/International_arbitration.
  3.     Supra at point 2.
  4.     https://www.clearias.com/arbitration-in-india/.
  5.     Uzair Ahmad Khan, Concept of Arbitration in India, iPleaders BLOG, (Oct. 13, 2021, 8:20 PM),



  1.     Shreya Tripathi, An Overview of Arbitration in India, iPleaders BLOG, (Oct. 13, 2021, 8:30 PM), https://blog.ipleaders.in/an-overview-of-arbitration-in-india/.
  2.     https://www.clearias.com/arbitration-in-india/#:~:text=Issues%20relating%20to%20administration%20and%20management%20of%20arbitral,trained%20administrative%20staff%2C%20lack%20of%20qualified%20arbitrators%2C%20etc.
  3. https://www.legalbites.in/advantages-and-disadvantages-of-arbitration/#:~:text=Disadvantages%20of%20Arbitration%201%20No%20Appeals%3A%20There%20is,language%20and%20culture%20of%20the%20two%20regions.%20.
  4. Ibid.
  5. Ibid.
  6. https://www.lawfirms.com/resources/lawsuits-and-disputes/arbitration/disadvantages-arbitration.htm.
  7. https://www.thebalancesmb.com/what-is-the-arbitration-process-how-does-arbitration-work-397420#:~:text=%20How%20the%20Arbitration%20Process%20Works%20%201,prepare%20for%20presentations%20and%20exchange%20information.%20More%20


Data collection and backup process

The Problem Businesses and Startups face Today

In the recent times, collection of personal data over the internet via services used by consumers has been criticized for invading privacy of people. Since the Pandemic started, consumers have become more aware of their digital data privacy rights. This has led to several consumers losing trust over the practices of a business. Worse than that, consumers are even willing to abandon well-reputed brands if their data is misused, breached or inappropriately traded. An instance to show the same is when WhatsApp brought a new change in its Privacy Policy in India in the year 2021, several users shifted to other services like Telegram abandoning WhatsApp.

Breaking Down what Data Collection means

Meaning of Data collection

Data Collection over the internet is a practice that is very common and can be seen in almost all websites. This includes the use of various types of cookies and othersimilar technologies.Collecting user data reveals different forms of information about the user itself such as the IP address, the device information, etc. Data Collection not only poses a threat to the Privacy of the individuals but also invades their privacy.The practice of Data Collection is used to track behaviors of customers Online so that Businesses may gain an understanding of the Consumer Behavior. This activity per se is unconstitutional since Privacy is a Right that has been included under Article 21 and other Articles of Part III of the Constitution.


Is Privacy at all related to Data Collection?

Is Privacy at all related to Data Collection?

Personal data is any information can be identified with, or can identify any living individual. Different pieces of data, collected together leading to the identification of a specificperson, also constitute personal data. According to the website of the European Commission1, the following are a few examples of what constitute personal data:

  1. A Name and Surname;
  2. A home address;
  3. An identification card number;
  4. Location data (for eg,: GPS Location);
  5. Internet Protocol (IP) address;
  6. The advertising identifier of a user’s phone;

What saves Startups and Businesses

PRIVACY POLICY. A Privacy Policy is a statement that is legally binding on both parties to an agreement: the online service provider as well the user of such service. It provides detailed information on how a website or a web app or any mobile app collects data and what data it collects and how such data is used thereafter. A Privacy Policy needs to be well drafted so as to clearly express what the service provider wants to communicate to the consumers regarding the treatment of their Privacy while using its services.


The New IT Rules, 2021 make some Significant Changes

The Information Technology Act, 2000 does not address the issue of personal data collection over the webin detail. The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, however does not try to fill up this gap. The new Rules have been framed with the intention of protecting the sovereignty and integrity of India.

What the Rules Say

The Rules do not speak about intermediaries collecting personal data of users but instead state that people who will be using the services should not host, display, upload, modify, publish, transmit,store, update or share any information that is invasive of another’s privacy,including bodily privacy. Rule 3(1)(a) makes it mandatory to publish rules and regulations, privacy policy and user agreement of the service to the consumers. Rule 3(1)(b) lists down whatever shall have to be mandatorily informed to the user of the service (whether website or web app or mobile app).

The Rules make it mandatory to register each user of a service. In addition to that, it states that if an intermediary collects any user data, then such data shall have to be retained by the intermediary for 180 days after the cancellation or withdrawal of his registration but the new Rules do not prevent collection of data from users. In relation to intermediaries whose primary service is messaging, the Rules speak of tracing the origin of a message.

The Rules even mention that intermediaries shall have to provide information under its control or possession, or assistance to Government agenciesThis implies that Consumer Data stored with intermediaries shall have to be traceable and monitored by providers of such services (irrespective of the platform in which a service is provided). This has been done to ensure safety to the sovereignty and integrity of the country. As such, the privacy of those consumers will be invaded, who are not involved in any activity detrimental to the sovereignty and integrity of the country.


What the Indian Judiciary said…

Justice K.S. Puttaswamy vs. Union of India

The landmark judgment in matters relating to Privacy is the case of Justice K.S. Puttaswamy (Retd.) vs. Union of India1. In this case, the Petitioner had filed the case before the Supreme Court of India challenging the constitutional validity of the Aadhar Scheme of the Central Government which proposed to make Aadhar mandatory to access all government services and benefits. The case was brought before the Court on the ground that biometric data of every individual stored with the Government was an invasion to Privacy since it could be used by the Government or any other agency which may have access to such data.

The Hon’ble Supreme Court of India held that the right to privacy is protected as an intrinsic part of the right to life andpersonal liberty under Article 21 and as a part of the freedoms guaranteedby Part III of the Constitution.


Karmanya Singh Sareen and Anr. Petitioners v. Union of India And Ors.2

In this case, the Petitioner filed the present petition before the Delhi High Court seeking issue of writs against WhatsApp. In this case, the Petitioner contended that the change in the Privacy policy of the WhatsApp service would mean irreversible damage to the fundamental right of the citizens of India. The Petitioner contended that sharing of data collected from users would amount to violating their Privacy Online.

Since the case of Justice Puttaswamy was not decided, the Court did not take a stand on speaking about Privacy but directed WhatsApp to not share their data collected till 25.09.2016 with Facebook.


Data Privacy Laws in Other Countries


United States of America

The United States of America do not have any specific single code that may govern the matters on data privacy and protection of consumer data. Instead the various states have enacted various legislations with respect to data privacy. Though there are certain federal laws as follows, these laws are focused on specific sector of activity and collection of data:

  1. Children’s Online Privacy Protection Act (COPPA)
  2. Health Insurance Portability and Accounting Act (HIPPA)
  3. Gramm Leach Bliley Act (GLBA)
  4. Fair Credit Reporting Act (FCRA)

European Union

The Primary Data Privacy Law in the European Union is the General Data Privacy Regulation (GDPR). The regulation entered into force on 24 May 2016 and applies since 25 May 2018. A parallel law besides the GDPR is functional in the European Union which is the Data Protection Law Enforcement Directive

The regulation applies if the data controller (an organization that collects data from EU residents), or processor (an organization that processes data on behalf of a data controller like cloud service providers), or the data subject (person) is based in the EU.3 The GDPR is very strict in relation to Data Privacy Laws.

United Kingdom

The United Kingdom recently, in the year 2018, enacted the Data Protection Act, 2018 which repealed the previous Data Protection Act, 1998. The newer law “is the UK’s implementation of the General Data Protection Regulation (GDPR)4.

Alongside the UK Data Protection Act, 2018, the Privacy and Electronic Communications Regulations exist. These Regulations give people specific privacy rights in relation to electronic communications.


The Data Privacy Problem with India

The major problem in India lies with the mass of people. Majority of the consumers are either unaware about their Online Privacy Rights or are indifferent to various Privacy Policies of businesses. In a leading newspaper, the following was noted5:

“….. the consumer’s evident lack of concern (or may be awareness?), about the data privacy issues, might explain the Indian government’s relatively sluggish pace on the issue.”

As it can be observed, there is no significant consequence if companies and businesses getting away with the personal data of their users in India. The new IT Rules, 2021 try to curb some practices that might be very invasive of a person’s privacy.


Which countries have relaxed laws relating to data for Startups?

Overall, there is no specific country where its data protection laws are relaxed enough especially for startups. Countries that have data privacy laws have a single thing in common: rules and regulation regarding collection and processing of data with or without the consent of the user.

Norms for data collection and processing apply equitably to all business and non-business organizations irrespective of whether a particular organization is a startup or not. However, some variations, do take place between different countries. Nonetheless, the primary object remains the same: to protect the data privacy of people.

However, countries in the European Union do have a stricter law in effect. Other countries like the USA and the UK also have very strict data privacy laws though countries like Canada, Romania and Ireland are even stricter when it comes to data privacy.


What can Businesses and Startups in India do?

There are not many cases in India regarding data collection by web or mobile services. However, the fact that collection of data without consent or without informing the users is a violation of Privacy Right still holds true. As such, it becomes even more important that websites, web apps and mobile apps communicate clearly with the consumers. Therefore, educating consumers becomes essential. Given the fact that many people do not even bother to check out Privacy Policies, the same cannot be ruled out since some consumers are very cautious about their digital footprints.As such, effective communication between online services and consumers can only take place when the online services educate effectively. Therefore, proper drafting of Privacy Policy considering the current scenario becomes very essential. Moreover, the Policy, or the link to the Privacy Policy Page should be easily noticeable by Consumers upon their use of the services.



  1. Writ Petition (Civil) No. 494 of 2012.
  2. W.P. (C) No. 7663/2016.
  3. https://en.wikipedia.org/wiki/General_Data_Protection_Regulation.
  4. https://www.gov.uk/data-protection.
  5. https://www.financialexpress.com/brandwagon/why-india-is-indifferent-to-the-data-privacy-issue/2193807/.


Young businesses may, in an attempt to cut legal, spend, rely on free online template to as their base document for contracting. Whilst the idea of cutting costs certainly tickles one’s ears, relying too heavily on dubious or inappropriate online free templates could ironically result in larger costs. It may be prudent to engage a lawyer to draft the contracts that you need instead.

Before addressing why, you should have a lawyer draft a contract for you, it would be helpful to discuss contracts generally. Quite simply, a contract is a promise, or set of promises, which the law will enforce.

There is no requirement that contracts be in writing. People are often surprised to hear that oral contracts are just as enforceable as written ones. For example, if your neighbor told you he would pay you 500 Rs. to mow his lawn, and you[i] then mow his lawn, that would make a valid contract. If your neighbor then refuses to pay you, he would be breaching his promise to pay you 500 Rs.

However, it is often best to get an agreement in writing simply because it is much more difficult, and costly, to prove the existence and terms of a verbal contract than it is a written one. In the above example, if you had to go to court to get the 500 Rs, your neighbor could say he offered 50 Rs not 500 Rs. or he could conveniently deny saying that he would pay at all.

The contract is a legal document. The two sides are making a legally binding agreement in which the law will be enforceable. There are legal consequences for the side that fails to keep its promises. The contract must not only memorialize the agreement, but it must be written in a way that makes the agreement enforceable in court.


That is the reason that a well drafted contract is very important for your business. Understand it more by following points;



Everyone knows the value of a contract. It enables parties to come to mutually beneficial agreements which facilitate innovation, creativity, and business expansion. But drafting a contract is easier said than done. A layperson could draft something that looks like a contract, but is woefully inadequate. It may even contain provisions that are not enforceable. A poorly drafted contract creates ambiguity, confusion, and misunderstandings that can derail business and other deals.

To write an effective contract, you need to understand that it must accomplish several different things. The contract must protect your interests so that if there are any issues later, you have the law on your side. The contract must accurately describe not only the deal but also what each side is exactly promising to do. At the same time, the contract must be written in a way that the other side will be comfortable signing it and moving forward with business. Contracts that are completely lopsided and unfair can be challenged in court.

Almost every relationship between your company and others – and among entities within your company – should have a contract. Most people realize this, but they either don’t reduce agreements to contracts or they attempt to draft their own. Without an understanding of Indian contract law, either of these is risky.

The objective of entering into a contract is to clarify the parties’ obligations while providing them with legal protections. To do that, you need a contract that is customized for the exact needs and nature of your business. A good contract makes litigation less likely by providing enforceable rights and remedies upon breach.




It’s possible to draft your own contract. However, you should hire contract lawyers to draft your contracts for the same reason most people don’t fix their own cars. They will take on the liability of avoid legal mistakes while ensuring that your agreements are valid and enforceable.



Having a lawyer draft your contracts gives you following distinct advantages:

  • Lawyers give you an invaluable outside perspective on the terms of the deal. In addition to their legal skills, contract lawyers are also detailed oriented and excellent problem solvers. Having a lawyer prepare your legal documents gives you an outside perspective on your business dealings. Sometimes the people involved are too close to the negotiations to notice potential problems with the structure of the deal.


  • Lawyers make sure the end product is a legally enforceable agreement. Contract lawyers have a specialized knowledge. They have seen firsthand why the exact language used in a contract matters. It might seem silly but something as minor as the placement, or misplacement, of a coma can make alter the way a particular clause in the contract might be interpreted by a court. When there are only two sides in a deal and things go south, there can only be one winner and one loser.


  • When you hire a contract lawyer to draft a legal document you are getting the expertise of someone who understands how the courts will interpret and enforce the different terms of a contract. Having a lawyer draft your contracts is the best way to make sure that a court will view your contract the same way you do. Contract lawyers add stability and predictability to financial and personal agreements.


  • When it comes to contracts, “close enough” is not good enough. The contract must be precise if it is to give you the maximum protection of the law. Because a contract has several technical legal requirements, if your written document leaves out a single key element, you will be left with something that describes the intentions of the parties, but is not legally enforceable. It leaves you unprotected in the event the other side fails to make good on their promises.



There are many dangers that come from writing your own contracts without the input of a contract lawyer;

  • One of the functions of a contract is to prevent future disputes between the two sides. This requires that the contract use precise language to describe the duties and responsibilities of both parties. When people create their own contracts, they often do not realize how vague their language is. For example, one common contractual term is “timely.” If timely is not defined in the contract, this one word can lead to expensive litigation. One side may feel that a delivery within 30 days is “timely” while the other side may face economic ruin because it understood “timely” to mean within a week. This vague term could land the two parties in court facing an uncertain outcome.


  • Another danger of DIY contracts is that they almost always fail to adequately address a number of potential issues that might come up, particularly in the event things do not go according to plan. Most people and businesses write contracts as if nothing will ever go wrong between the two parties because the deal is too important. Contract lawyers have seen enough deals go bad that they draft contracts to address common issues in commercial relationships.



  • When something bad happens down the road and the parties have not addressed it in their contract, one side usually gets it in the bum.


  • Another commonly seen issue with self-drafted contracts is that they may not be enforceable at all. Additionally, they may contain provisions that are enforceable in one state, but not enforceable in others. A contract lawyer will ensure that all of the essential elements for an enforceable agreement are present in the document.



  • These online contracts are boilerplate forms, which may not have been drafted with INDIA in mind. A lawyer who has never even practiced contract law in INDIA may have created the template you are thinking about downloading. This is a problem because not all countries/states have the same rules and laws when it comes to interpreting different contractual terms.


  • Another issue is that these templates do not take into account the specifics of your situation. No two people or businesses are exactly alike. If you are using a form contract, you may find yourself in serious trouble when a contract dispute arises. It is during contract disputes and resulting litigation over form contracts that people and businesses learn that it is much more expensive to edit a form contract than it is to have one drafted correctly in the first place.



  • Nor are these contracts tailored in any meaningful way to the specifics of your agreement. Instead, they usually spout a bunch of flowery legal gibberish that older attorneys or lay people think are significant. The modern trend in all legal writing, including contracts, is to write in plain, clear, and easily understood terms.


It is completely understandable that many people and businesses want to save money on legal costs and succumb to the temptation to grab a few form contracts off Google. However, the cost to hire an attorney, who properly prepare a contract is likely surprisingly cheaper than you might think. Moreover, the cost to litigate a contract dispute over poorly worded clauses will certainly cost much more than having a professional write the contract in the first place.

When you hire an attorney to draft a contract you are getting a custom document that was drafted specifically for your situation and to protect your specific interests.




If something is important enough to create a contract, you should invest in making sure the contract itself actually protects your interests. Experienced contract lawyers understand that when drafting a contract for their clients, they must create a legal document that serves both the business and legal needs of the person or company.


A legal firm has written thousands of legally binding contracts, in plain language, for a variety of personal and business situations. They use their extensive contract law experience to draft contracts that serve the purposes of your business, seek to avoid disputes, and in the event litigation becomes necessary, will be enforceable in court.

Often businesses use free online contracts for partnership agreements, employees, consultants, vendors, etc. Since these are such important relationships, you need to be confident those contracts indeed benefit and safeguard you and your business.



Your need for contracts can arise in several circumstances. With the growing demand for your service or products, you may need to expand your team. This necessitates employment and independent contractor agreements. If you’re offering a service, you have clients and you need to have a client service agreement to avoid problems. Same goes for products, if you’re selling products you need Terms and Conditions, a Privacy Policy, and a Refund and Exchange Policy.


The purpose of written contracts with partners, shareholders, employees, contractors, suppliers, vendors, and customers is to:

  • Solidify your relationships with these parties,
  • Clearly describe each party’s rights and responsibilities,
  • Avoid liability
  • Avoid payment disputes or non-payments by clients and customers
  • Avoid future disagreements in general, and Preemptively agree on how to handle disagreements.

Your contracts can only do their job if they accurately reflect your situation and intentions. If you use a free contract template that you found online or got from a friend or another business to save money, you end up in agreements that may not fulfill their purpose or worse, harm you because you have clauses you don’t fully understand that the other party can take advantage of, placing your business at risk for costly disputes. You may save money now only to be forced to spend a lot more later.



Let’s say your startup is expanding and you want to improve your organic and social search traffic. You hire an SEO strategy consultant because you want more people to find you online. You now need an independent contractor agreement, and your first thought is to pull one from the internet, seriously!!!!

There is no shortage of free or low-cost independent contractor agreements online. However, broad issues with free contracts can be summed up with these questions:

  • Do you know how each provision affects both parties?

Many online business contract templates are full of gibberish in terms of art. You may see terms like “represents,” “warrants,” “indemnify,” “joint and several liabilities,” “damages,” “caveat emptor,” “de facto,” and the list can go on. If you lack experience with legal jargon, then there are times when you may not make the best guess as to what certain provisions mean. If you cannot understand how each provision impacts your business, your consultant, and your business relationship, then you need to speak with an attorney before signing.

  • Do you know if each provision is enforceable?

There are many restrictions to what you can agree to in a contract. A good example is an arbitration provision. Many online contracts include a boilerplate mandatory arbitration clause. This typically requires parties to submit a dispute to arbitration instead of immediately filing a lawsuit. There’s nothing inherently wrong with an arbitration provision, but you may not want to be at the mercy of someone else to make one final decision on who wins the case and the amount. You may want to be able to appeal the decision and request much more in damages though litigation.

There is also the question of whether the arbitration provision in your contract enforceable in your state or chosen venue? If you aren’t sure, then the arbitration provision in your free contract template can do you more harm than good. If your relationship with your consultant goes south, you could find yourself in costly litigation regarding whether the other party must abide by that provision or not.

  • Do you know what you’re missing?

You obtain an independent contractor agreement from the internet, read it over, and everything makes sense. There is a provision that makes it clear the person is an independent contractor and not an employee. There is a clause regarding your ownership of the work product. There is a place to insert duration and payment terms.


Everything looks ready to go, but do you know if the agreement is missing something essential? Is there a clause you should have in the agreement that is not there? Is there a part of a provision that should be clarified or expanded? One of the dangers of using online contracts is that you don’t know when something isn’t there that should be and how that could hurt you in the future.



If you answer one or more of these questions with a “no,” then it is best to work with an experienced attorney to negotiate and draft your contracts. Whether you’re a startup or a small to mid-size company, you need to protect the business as much as you can. By working with an attorney experienced with contract drafting, review, and negotiation instead of utilizing free contract templates, you obtain a clear understanding of how an agreement impacts your business, how the contract mitigates the risk of disputes, and how it controls the resolution of a potential disputes.









We have been hearing about the drone revolution for a couple of years now. Nothing has helped the drone industry more than the Covid 19 pandemic. India is the fastest-growing market for unmanned aerial vehicles (UAVs), according to the Indian Drone Market Report 2019-2024 by Drone Industry Insights. The global drone market is expected to cross $43 billion in 2024, up from $14 billion in 2018, the report said. The government has stepped in at the right time to help the industry take another leap forward by launching a Production Linked Initiative(PLI) scheme. This scheme offers an incentive of 20% of the value addition made by a manufacturer of drones and drone components. The government expects the incentive to see an investment of over Rs 5,000 crore over the next three years beginning current fiscal. According to a statement by the aviation ministry, the drone manufacturing sector is expected to create more than 10,000 direct jobs over the course of next 3 years. This scheme will bring down the prices of drones further and incentivize foreign investment in this sector as well.


Indian Drone Start-ups

Indian Drone Startups 1

With the rise in automation, drones, or the unmanned aerial vehicles have become deployable in several industries and can perform different functions. A wide range of innovative drone solutions have come up as a result of rising demand for drones in the market which has driven innovators. Some of the most prominent Indian drone start-ups have been discussed below.

Aarav Unmanned Systems(AUS) is a start-up which provides drone solutions for enterprises and is currently working from Bengaluru. AUS is constantly setting world-class technology benchmarks because of the continuous efforts on Drone Intelligence, Hardware optimization & Design innovation. Having served key players across various verticals both for the private and public sectors, AUS is a company that has already the undisputed leader of commercial drones in India. It originated out of IIT Kanpur in 2013 and has risen several notches above the rest in recent years. AUS is backed by firms such as GrowX, 500 Startups, Valpro, StartupXseed etc. which adds to its credibility.

DroniTech is a drone service provider based in Mumbai offering multiple services ranging from aerial photography and industrial inspections etc. to other such services. In addition, the company uses its in-house developed drone management software to manage, monitor, and process the images collected by the drones. Founded in 2018, it has been growing steadily.

Terra Drone India is a startup founded in 2018 and currently located in Pune, provides cloud based 3D image sensors for topographical survey and inspection. It also offers multi-antenna GNSS LiDAR systems for plant height assessment, asset mapping, power line sag inspection, and topographical mapping. This organization also offers cloud-based software for the processing and visualization of captured data. So, the basic services it offers are providing drones for end to end topographical surveys.

Detect Technologies, incubated in 2016 at the IIT Madras Research Park, with the aim to assist process industries in driving digital transformation for asset integrity solutions. An intelligent drone for reliable inspection of assets- is the first of its kind truly automated drone. As the assets differ in sizes and locations, Noctua can be programmed to cater to specific requirements of each equipment such as columns, vessels, reactors, etc. This flight path is repeatable with extreme precision making it a truly repeatable periodic inspection.



Trends and Growth

Trends and Growth


Chief Executive of Skylark Drones recently stated in an interview that foreign investors have been eyeing the Indian drone market and will make significant investments in the near future because of the growing drone market in India. Bengaluru based start-up Skylark Drones has witnessed a 3 times growth in sales and is planning to double its team of 30. They will also be looking to partner with drone pilot training institutes to train their own pilots.[i]

Aarav Unmanned Systems plans to add 500 people to its organization by the next year. Most of these new positions will be filled with drone pilots but some positions will be filled by other personnel as well namely engineering and fabrication manufacturing teams.

Rituparna Chakraborty, executive vice-president at executive search firm TeamLease Services, said niche jobs such as drone photographer and filmmaker, drone 3-D modeler, drone pilot trainer, precision agriculture surveyor, drone surveillance, search and rescue, and wildlife conservation jobs would also open up in the sector in the long term.

India is one of the fastest growing markets for drones according to a report by Drone Industry Insights 2019-2024. There are a lot of new opportunities opening up where drones can be put to use. The main increase in demand is seen in the entertainment, agriculture, defense and surveillance sectors. Skye Air Mobility, which is working on making a business case for drone deliveries, is in conversations with multiple hospital chains. The company is in talks with several North East states to deliver drones as part of their trials. They are already doing that with Blue Dart and Flipkart on a trial basis.

All of these companies are trying to explore new territories to put the drone technology to use. Defence is one of the key areas especially after a recent drone attack in the sensitive Jammu and Kashmir region.

The new Drone Rules

The new drone rules

The Ministry of Civil Aviation published liberalized drone rules repealing the earlier rules perceived to be causing hindrance to the growth of the drone industry in India.[ii]

Key features of Drone Rules-

1. Application

(i) the drones which are either registered or operating in India and (ii) the people who possesses, own or engage in the leasing, in operating, transferring or in maintaining any drone in our country. The New Rules that are passed should not apply to the drones which belong to or which are used by naval, military or air forces. These New Rules gives a further clarification that Aircraft Rules 1937 will not apply to any Unmanned Aircraft System (UAS) except only for UAS with the maximum all-up-weight of approximately more than 500 kilograms.

2.Classification and Certification-

The New Rules enforced also provides a brief matrix for analyzing the category, sub-category as well as classification on the basis of maximum weight which includes payload of drones. On the basis of this detailed matrix, each and every drone operating in our country is required to have a type certification as well as a unique identification number. On an interesting note, this type certification is not necessary for manufacturing or for importing drones in India.

3. Mandatory Safety Features-

According to the rule 12 of New Rules, the Central Government can prescribe certain mandatory safety features in future which can be installed on a UAS and they may include some features like – (i) including no permission, like, no take-off hardware as well as firmware, (ii) Real-time beacon which communicates the drone’s speed, it’s altitude, as well as its unique identification number, and (iii) the geo-fencing capability.

4. Digital Sky Platform-

In order to reduce the human interface along with delay which is attributable to our bureaucratic procedures, the Ministry of Civil Aviation has devised something known as the digital sky platform. This digital sky platform works as a one sided window for the registration of drones along with a window for generating approvals automatically. Nodal officers of the State Governments, the Union Territory Administrations as well as the law enforcement agencies should be given a direct access to this digital sky platform. New Rules that are passed requires each and every drone to go through certain standards that are prescribed by Quality Council of India to obtain a airworthiness certificate. These standards can promote the use of original technologies, the designs, components and drones together with the Indian regional navigation satellite system also known as Navigation with Indian Constellation or NavIC.

5. Classification of Zones and Traffic Management-

These new sets of rules divide the airspace into categories like, green, yellow, and red zones. The drones are permitted to operate in only the green zone without any prior permission. On the other hand, for the yellow and red zones, these drones require certain permissions to fly. The Central Government of India shall publish a policy structure within the next sixty days of date of notification of the Rules in respect for Unmanned Aircraft System for the Traffic Management System (UTM System) on digital sky platform. The UTM can enable the traffic management of these drones through air, ground, or even space based communications, navigation, as well as surveillance.

6. Reduced Compliance Requirements-

Newly passed rules make a significant change when it comes to decreasing lengthy list of the compliances as were present in the Old Rules. Several approvals have been abolished: unique authorisation number, unique prototype identification number, certificate of manufacturing and airworthiness, certificate of conformance, certificate of maintenance, import clearance, acceptance of existing drones, operator permit, authorization of R&D organization, student remote pilot license, remote pilot instructor authorization, drone port authorization etc. have all been done away with.  Number of forms have been reduced from 25 to 5 and the types of fee reduced from 72 to 4.

7.  Remote Pilot License-

These new rules which are passed makes it mandatory that no person other than the holder of a valid remote pilot license which is listed on digital sky platform and can operate a UAS. The remote pilot license should basically set the details of all category, sub-category, together with classification of the UAS for which this license should be issued. Moreover, we can use nano drones for all kinds of use, and micro drones for only non-commercial use for the requirements of a remote pilot are exempted.

8. Research, Development, and Testing-

Newly passed rules exempt few persons which are engaged in research work, development as well as testing of the UAS from the requirements of the type certificate, the unique identification number, a prior permission and the remote pilot licence for the operation of UAS.



As is already clear, Unmanned Aircraft Systems, commonly known as drones, offer tremendous benefits to almost all sectors of the economy alike- agriculture, infrastructure, surveillance, emergency response, mining, transportation, law enforcement etc. to name a few. Their uses will only increase in the future. Drones can be significant creators of employment and economic growth due to their reach, versatility, and ease of use, especially in India’s remote and inaccessible areas. In view of its traditional strengths in innovation, information technology, frugal engineering and huge domestic demand, India certainly has the potential to become a global drone hub by the end of this decade.

The growth in jobs in this particular sector can be noticed. Most new jobs are for drone pilots but the jobs in other areas have also risen significantly. It is an opportunity to invite foreign investment for the growth of domestic drone industry. The new entrepreneurs in India must take note of this and try and take advantage of this growing sector. The government has also stepped in and relaxed the rules and made certain policy decisions which will help the industry grow.



[ii] https://tracxn.com/explore/Drones-Startups-in-India


[ii] https://economictimes.indiatimes.com/tech/startups/drone-companies-step-up-offerings-hiring-after-pli-scheme/articleshow/86720678.cms


[ii] https://pib.gov.in/PressReleseDetailm.aspx?PRID=1749154