India's Startup Dilemma: Government Funds Innovation But Fails to Procure From Its Own Ventures

Summary

Despite India's efforts to fund and encourage startups, government procurement from these ventures remains low, with startups receiving less than four percent of the ₹5.03 lakh crore spent on the Government e-Marketplace in FY26. This disparity highlights a policy gap where startups receive entry-side relief but lack buyer-side mandates, unlike Micro and Small Enterprises (MSEs) which have procurement targets.