Introduction

The Indian startup ecosystem has witnessed significant growth over the past decade, with increasing participation from women entrepreneurs. Government initiatives such as Startup India and financial support schemes have played a crucial role in encouraging women-led businesses. Today, nearly half of the government-recognized startups in India have at least one woman director, reflecting a gradual shift towards gender inclusivity in entrepreneurship.

• Despite these advancements, challenges remain. Societal norms, financial constraints, and limited access to mentorship often hinder the growth of women-led startups. While many women have successfully established businesses, the overall share of female-led startups in India remains relatively low. Addressing these challenges requires sustained policy support, financial accessibility, and a shift in traditional perceptions of women’s roles in business.

Understanding the Startup Ecosystem and Women’s Role

A startup is a newly established business that aims to develop a product or service with limited resources. In India, the Department for Promotion of Industry and Internal Trade (DPIIT) recognizes startups based on specific criteria, such as age (not older than 10 years), turnover (not exceeding ₹100 crore), and innovation potential.

According to government data, India has over 1.6 lakh recognized startups, out of which nearly 73,000 have at least one woman director. India ranks second globally, after the US, in terms of funding raised by women-led startups. However, despite these achievements, only 7.5% of all startups in India are women-led, showing that gender disparities remain a significant challenge.

Women entrepreneurs contribute significantly to India’s economic growth and social progress..

• Economic Impact: Encouraging women’s entrepreneurship could lead to over 30 million women-led enterprises, creating 150-170 million jobs (NITI Aayog). Additionally, integrating more women into the workforce could increase India's GDP growth by 1.5 percentage points (World Bank).
• Gender Equality: Currently, only 19.2% of Indian women participate in the workforce, compared to 70.1% of men (ILO). Women entrepreneurs play a key role in narrowing this employment gap and ensuring better utilization of human capital.
• Developing Local Markets: Women-led businesses, especially those leveraging digital platforms, contribute to rural development and urban employment by expanding market access and connecting to global customers.
• Social Change & Role Models: Women entrepreneurs inspire other women to pursue financial independence, fostering a cultural shift toward gender parity.

Government Support for Women Entrepreneurs

To encourage women’s participation in entrepreneurship, the Indian government has launched several policy initiatives and financial schemes:

·         Startup India Seed Fund Scheme (SISFS) – Provides early-stage funding to startups.

·         Fund of Funds for Startups (FFS) – Helps startups get access to capital.

·         Credit Guarantee Scheme for Startups (CGSS) – Supports risk coverage for lenders funding startups.

·         Capacity Development Programme for Women Entrepreneurs – Has provided training and mentorship to over 1,300 women entrepreneurs across 10 states.

·         Mudra Yojana for Women (Mahila Udhyami Yojana): Offers collateral-free loans up to ₹10 lakh to support small businesses.

·         Women Entrepreneurship Platform (WEP) by NITI Aayog: Aggregates mentorship, resources, and funding opportunities for women entrepreneurs.

·         Pradhan Mantri Virasat Ka Samvardhan (PM Vikas) Scheme: Focuses on livelihood improvement for minority women.

Sectors Where Women Entrepreneurs Thrive

• Retail and E-commerce (Business-to-Consumer models, online platforms)
• Education Technology (EdTech)
• HealthTech and Wellness
• Sustainable and Social Enterprises

Despite this growth, the number of acquisitions of women-led startups declined from 45 in 2021 to just 16 in 2024, indicating challenges in scaling businesses. However, in 2024, five women-led startups went public, including MobiKwik, Usha Financial, Tunwal, Interiors and More, and LawSikho, showcasing growing opportunities in certain sectors.

Women Entrepreneurship and Gender Norms

• Financial Independence: Women-led businesses contribute to household income and economic empowerment.
• Decision-Making Power: Greater financial contributions can improve women’s role in household and business decision-making.
• Breaking Stereotypes: Successful women entrepreneurs serve as role models for younger generations.

However, challenges persist. Many women entrepreneurs continue to face the double burden of managing both work and domestic responsibilities. Financial independence does not always translate into complete social empowerment due to deeply ingrained gender roles.

Challenges Faced by Women Entrepreneurs

1.     Access to Funding:

o    Women-led startups receive less investment compared to male-led ones.

o    Many investors hesitate to fund women entrepreneurs due to gender biases.

2.     Societal and Familial Pressures:

o    Women are often expected to prioritize family over business.

o    Lack of family support and societal expectations discourage entrepreneurial ambitions.

3.     Regulatory and Market Challenges:

o    Women entrepreneurs often struggle with complex legal regulations and compliance burdens.

o    Supply chain disruptions, lack of skilled workforce, and limited market access hinder business growth.

4.     Limited Representation in High-Growth Sectors:

o    Women entrepreneurs are often concentrated in micro-enterprises rather than high-growth industries like technology, manufacturing, and finance.

o    Only 18.42% of enterprises in urban India are owned by women.

5.     Necessity-Driven vs. Opportunity-Driven Entrepreneurship:

o    Many women turn to entrepreneurship due to a lack of employment opportunities rather than a genuine interest in business.

o    This limits the scalability and long-term sustainability of their ventures.

Steps to Strengthen Women’s Role in the Startup Ecosystem

1.     Increased Financial Access:

o    More women-focused venture capital funds should be established.

o    Simplified loan procedures and lower interest rates can encourage more women to start businesses.

2.     Skill Development and Mentorship:

o    Training programs should focus on business strategy, financial literacy, and digital skills.

o    More mentorship networks should be created to connect women entrepreneurs with experienced business leaders.

3.     Policy Reforms:

o    The government should introduce gender-responsive policies that ease compliance burdens for women-led businesses.

o    Improved maternity benefits and workplace childcare support can help women balance work and family responsibilities.

4.     Market Access and Networking:

o    Women entrepreneurs need better access to B2B partnerships, government procurement programs, and global markets.

o    Initiatives like Women Entrepreneurship Platforms (WEPs) can help in market expansion.

5.     Encouraging STEM Participation:

o    More women should be encouraged to enter technology and innovation-driven sectors.

o    Scholarships and funding for women in STEM (Science, Technology, Engineering, and Mathematics) can help bridge the gender gap.

Conclusion

Women entrepreneurship in India is growing but still faces structural and cultural challenges. While initiatives like Startup India have created a more inclusive environment, gender biases, financial barriers, and societal norms continue to limit the full potential of women entrepreneurs.

To ensure true empowerment, India must focus on financial inclusion, policy reforms, and skill-building programs. Women-led startups have the potential to drive economic growth, create jobs, and inspire social change—but this requires a concerted effort from the government, industry, and society as a whole.