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Despite 6,385 closures, India’s 1.97 lakh startups created 21 lakh direct jobs

The maximum number of closed startups is in Maharashtra (1,200). It was followed by Karnataka (845), Delhi (737), Uttar Pradesh (598), Telangana (368), and Tamil Nadu (338).

3 min readNew DelhiUpdated: Dec 4, 2025 09:19 AM IST

In a separate reply, Commerce and Industry Minister Piyush Goyal said as of October 31, the recognized startups have reported having created over 21.11 lakh direct jobs (representative image/ Pexels)

As many as 6,385 recognised startups have been categorised as ‘closed’ as of October 31, according to the data from the Ministry of Corporate Affairs, Parliament was informed on Tuesday. These recognised startups are eligible for a number of incentives, such as income tax benefits under the Startup India initiative by the Department for Promotion of Industry and Internal Trade (DPIIT).

As of October 31 this year, a total of 1,97,692 entities have been recognised as startups.

“As on 31st October 2025, 6,385 recognised startups are categorized as closed (i.e., dissolved/struck-off), as per the Ministry of Corporate Affairs (basis data shared on 11th November 2025),” the Minister of State for Commerce and Industry Jitin Prasada said in a written reply to the Lok Sabha.

The maximum number of closed startups is in Maharashtra (1,200). It was followed by Karnataka (845), Delhi (737), Uttar Pradesh (598), Telangana (368), and Tamil Nadu (338).

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He said that the government has not observed any increase in startup closures.

“Closures that do occur are generally influenced by factors such as the viability of the business model, alignment with market demands, domestic and global economic conditions, the nature of products and services developed, the ability to attract funding, and other business-specific considerations,” he said.

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Startup India is an initiative of the government of India. Under this, the government is implementing three flagship schemes, Fund of Funds for Startups, Startup India Seed Fund Scheme, and Credit Guarantee Scheme for Startups, to provide funding opportunities and support startups across sectors at various stages of their business cycle.

Under Section 80-IAC of the Income Tax Act 1961, an eligible startup can claim a deduction of an amount equal to 100 per cent of the profits and gains derived from an eligible business for three consecutive assessment years.

As of October 31, 4,147 recognised startups have received certificates of eligibility under this section.

In a separate reply, Commerce and Industry Minister Piyush Goyal said as of October 31, the recognized startups have reported having created over 21.11 lakh direct jobs.

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Meanwhile, IIT Madras Incubation Cell (IITMIC) has incubated a total of 511 startups, with a combined valuation exceeding Rs 53,000 crore (US $6 billion) based on their most recent VC funding rounds, and generating over 11,000 direct jobs. In the financial year 2024-25, the incubator achieved a historic milestone of incubating 100+ new deep tech startups under its “Startup Shatam” mission in the financial year 2024-25, and continues to screen more than 100 new startup applications every month in the current financial year.