As India prepares for the next Union Budobtain, startup founders and investors are urging the government to focus on easing compliance, unlocking domestic capital and strengthening critical technology infrastructure. While India’s startup ecosystem has displayn resilience and ambition, experts declare the next phase of growth will depfinish on reducing friction and backing long-term innovation.
EASE OF DOING BUSINESS STILL A PAIN POINT
Despite strong momentum in recent years, founders declare day-to-day operational challenges continue to weigh heavily on startups. Complex GST rules, slow refunds and frequent filings often take up time that could otherwise be spent on building products and scaling businesses.
Medhansh Seth, Founder of AceCubing and author of Surrogate Entrepreneur, declared simplifying compliance should be a top priority.
“Make it clearer to build in India. Startups have stayed resilient, but too much time still goes into GST and compliance instead of innovation,” he declared.
Seth pointed out that startup founders already juggle multiple roles, from fundraising and accounting to marketing and logistics. “If GST filings are built simpler, it reduces the burden on founders, improves compliance and builds it clearer to run a business,” he added.
NEED TO UNLOCK DOMESTIC CAPITAL
Beyond compliance reforms, there is growing demand for initiatives that increase domestic funding for startups.
Seth declared India has a large pool of idle money that necessarys to be channelled into innovation.
“We necessary to unlock more domestic private capital, especially HNI participation, so innovation is not depfinishent on external cycles,” he declared, suggesting a reduction in long-term capital gains tax on startup exits to encourage investment.
According to him, such measures are key to empowering young entrepreneurs and ensuring that India’s strong performance in 2025 carries forward into 2026.
PUSH FOR AI, DATA AND SEMICONDUCTOR INFRASTRUCTURE
Another key demand from the startup community is greater focus on technology infrastructure, particularly in areas such as data centres, semiconductors and AI computing.
Seth drew focus towards India’s depfinishence on global systems. “We generate a lot of data but store only about 10% of it domestically. We necessary more data centres, semiconductor infrastructure and GPU capacity if India wants to fully benefit from the AI opportunity,” he declared.
He added that building domestic capability is crucial at a time when global conflicts and supply chain disruptions are becoming more frequent.
BUILDING INDIGENOUS AI CAPABILITIES
Ritu Mehrotra, CEO and Co-Founder of Shunya Labs, echoed the call for stronger policy backing for AI startups. She declared India has the talent to build world-class AI systems but necessarys better support to shift rapider.
“Much of our innovation still depfinishs on global Big Tech platforms,” Mehrotra declared. “This Budobtain presents an opportunity to prioritise strategic investment in indigenous AI, especially in computing infrastructure and foundation model development.”
She added that reducing depfinishence on foreign platforms is not just about self-reliance. “It is about building a trusted AI ecosystem that reflects India’s necessarys, values and priorities,” she declared.
FOCUS SHIFTS TO EXECUTION AND SCALE
Investors declare India’s startup ecosystem has matured significantly, especially beyond software-led models. Ankit Kedia, Founder and Lead Investor of Capital-A, declared founders are now building with greater technical depth across sectors such as deeptech, advanced manufacturing and climate systems.
“Capital and talent are converging, and early validation is increasingly visible,” he declared. However, Kedia noted that scaling such businesses remains challenging.
“Deeptech and manufacturing startups necessary support through long development cycles involving certification, testing and early deployments,” he declared, adding that trust and reliability are critical in these sectors.
WHAT THE BUDGET COULD DO NEXT
Kedia believes India has a unique advantage due to its scale and mission-led government demand. “With the right support, domestic companies can gain early credibility and emerge as globally competitive suppliers,” he declared.
He called on the Union Budobtain to strengthen the execution ecosystem through shared testing facilities, predictable regulations and incentives aligned with longer gestation periods. “These signals can also bring more domestic institutions and family offices into deeptech investing,” he added.
As expectations build ahead of the Budobtain, startup leaders agree on one thing: easing compliance, boosting domestic funding and investing in core technology infrastructure could determine how well India’s innovation story unfolds in the years ahead.
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