New Delhi: The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, has driven a sustained shift from a permission-based to a trust-based governance and regulatory framework.
Reforms spanning the startup ecosystem, compliance reduction, sectoral regulation, foreign direct investment (FDI) and single-window clearances have reduced the regulatory burden on businesses while delivering measurable outcomes in business entry, employment, investment and digital service delivery.
Startup India Supports 2.5 Lakh+ Startups
DPIIT has recognised 2,50,046 startups, reporting more than 25.42 lakh jobs across over 770 districts and 56 industries.
Of these startups, 52% are from non-metro cities, while 48% have at least one woman director.
Annual startup recognitions increased from 34,200 in FY 2023-24 to 36,440 in FY 2024-25, reflecting the continued expansion of the startup ecosystem under the trust-based governance approach.
Under the Startup India Seed Fund Scheme, ₹775.67 crore has been approved for 4,194 startups across 32 States/UTs through 244 incubators.
The scheme includes 2,147 women-led startups and 2,356 startups from Tier-II and Tier-III cities.
Under the Fund of Funds for Startups, SIDBI has committed ₹12,623 crore to 166 Alternative Investment Funds (AIFs). These funds have invested ₹28,254 crore in 1,475 startups.
The Credit Guarantee Scheme for Startups has guaranteed 532 loans worth ₹1,662.71 crore to startups employing 41,637 people.
The guarantee cover per borrower has been doubled from ₹10 crore to ₹20 crore, while the annual fee has been reduced to 1% for 27 Champion Sectors.
Trust-Based Governance: 63 Regulatory Reforms Strengthen Startup Ecosystem
A total of 63 regulatory reforms have been enabled, including the abolition of angel tax, harmonisation of long-term capital gains taxation for listed and unlisted shares, and permission for insurance companies, EPFO, superannuation funds and gratuity funds to invest in AIFs.
These measures form part of the broader trust-based governance framework aimed at reducing regulatory barriers for startups and businesses. Further, 4,467 startups hold the Section 80-IAC certificate of eligibility.
With prior-experience, prior-turnover and Earnest Money Deposit (EMD) requirements relaxed, the number of startups registered on the Government e-Marketplace (GeM) has increased from 7,929 in January 2021 to 43,260.
These startups have delivered 6.23 lakh orders worth ₹68,105 crore to public buyers. Dedicated startup policies have expanded from four States/UTs in 2016 to 32.
In addition, 104 new incubators have been established across 17 States/UTs, while the TEJAS initiative covers 132 districts in 27 States/UTs.
Trust-Based Governance: 47,957 Compliances Reduced Across India
A total of 47,957 compliances have been reduced across Central Ministries and States/UTs. Of these, 22,290 have been digitised, 16,141 simplified, 5,255 decriminalised and 4,271 eliminated.
The Jan Vishwas Acts have decriminalised 900 provisions of Central laws. This includes 183 provisions across 42 Acts in 2023 and 717 provisions across 79 Acts in 2026.
The measures are part of the shift towards trust-based governance, with the reforms focused on reducing unnecessary compliance requirements and simplifying interactions between businesses and government.
States/UTs have implemented more than 9,700 reforms across seven editions of the Business Reforms Action Plan (BRAP). The District BRAP extends 222 reforms to District Collectorates, Development Authorities and Urban Local Bodies.
Trust-Based Governance: Labour Law Consolidation Reduces Compliance Burden
Twenty-nine Central labour laws have been consolidated into four Labour Codes.
The threshold for prior permission for lay-off or closure has been raised from 100 to 300 workers.
The applicability threshold for factories has been increased from 10 to 20 workers for establishments using power and from 20 to 40 workers for those not using power.
The threshold for contract-labour licensing has been raised from 20 to 50 workers. A 30-day compliance notice is now mandatory before legal action.
The labour law changes further the trust-based governance objective of simplifying compliance and reducing the regulatory burden on businesses.
Trust-Based Governance: PESO Licensing Digitised Through NSWS
The validity of licences issued by the Petroleum and Explosives Safety Organisation (PESO) has been extended from five to ten years, reducing the need for renewals.
All PESO modules have been digitised and integrated with the National Single Window System (NSWS). Online No Objection Certificates (NOCs) are issued by District Authorities, while fee relaxations have been provided for women and Micro, Small and Medium Enterprises (MSMEs).
The Boilers Act, 2025, has also replaced the colonial-era Boilers Act, 1923.
Trust-Based Governance: FDI Reforms Expand Automatic Route Across 17 Sectors
Seventeen sectors have moved to the automatic route for foreign direct investment (FDI).
In the defence sector, the FDI limit under the automatic route has been raised from 49% to 74% for new industrial licences.
The FDI limit in insurance was raised from 49% to 74% in 2021 and to 100% in 2026 for insurers investing their entire premium in India. The sector attracted approximately USD 8.79 billion in FDI from FY 2021-22 to FY 2024-25.
Up to 100% FDI is permitted under the automatic route in telecommunications, non-scheduled air transport services and ground handling in civil aviation, as well as satellite component manufacturing and broadcasting distribution.
These investment reforms are part of the broader trust-based governance framework aimed at simplifying regulatory processes and facilitating investment.
India Receives USD 843 Billion in FDI
India received USD 843 billion in FDI during FY 2014-15 to FY 2025-26, which was 169% higher than the USD 313 billion received during the preceding twelve years.
The FDI inflow reached an all-time high of USD 94.53 billion in FY 2025-26.
National Single Window System Simplifies Business Approvals
The National Single Window System (NSWS) has received 15,49,850 applications, registered 5,76,778 businesses and delivered more than 8.5 lakh approvals.
A total of 3,779 services are live on the platform, comprising 327 Central and 3,452 State services. This compares with 142 Central approvals and 14 States/UTs at its soft launch in September 2021.
The system has integrated 34 States/UTs and 32 Central Ministries/Departments, with 18 Central Ministries using NSWS.
The digital platform is a key component of trust-based governance, reducing procedural complexity and enabling businesses to access regulatory services through an integrated system.
KYA Module Provides Visibility of More Than 8,000 Approvals
The Know Your Approvals (KYA) module enables businesses to identify the Central and State approvals applicable to them at the outset, providing visibility of more than 8,000 approvals.
Of these, 2,825 approvals, comprising 592 Central and 2,233 State approvals, are integrated through KYA.
To eliminate repetitive data entry, 89 common data fields now auto-populate across 285 approvals.
The portal is available in 22 Indian languages, improving accessibility for entrepreneurs across regions and supporting the trust-based governance framework through greater transparency and digital access.
NSWS Eliminates Approval Steps Through Digital Integration
NSWS is also being used to eliminate approval steps altogether.
The Industrial Entrepreneur Memorandum (IEM) is now auto-generated using data drawn from the Ministry of Corporate Affairs (MCA), Goods and Services Tax Network (GSTN) and other databases, without requiring departmental approval.
Similarly, e-B4 production visa sponsorship letters for foreign professionals are generated through API integration between NSWS and the Visa portal, without requiring approval from the concerned line Ministry.
Single Window Systems Strengthen Digital Regulatory Delivery
States/UTs have been encouraged to establish and strengthen Single Window Systems (SWS) as integrated digital platforms providing businesses with a single point of access to regulatory approvals and compliances.
The framework promotes features such as Single Sign-On, Single Business ID, Know Your Approvals, Common Application Forms, online payments, inspection management, applicant guidance, grievance redressal and real-time dashboards.
These features are supported by inter-departmental integration and end-to-end digital processing, reinforcing the transition towards trust-based governance.
The initiatives aim to reduce procedural complexity, minimise physical touchpoints, improve transparency and ensure time-bound service delivery.
Taken together, the reforms mark a steady transition towards simpler, digital and less burdensome regulation, enabling businesses to start, grow and invest with greater ease.
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