CII report: India's startups must shift from valuation to value-scale model
Synopsis
India has 120+ unicorns and $118 billion in cumulative funding — but the CII says chasing valuations is no longer enough. Its new report calls for a structural reset toward sustainable unit economics, deep-tech investment, and policy frameworks that support long-term global competitiveness, not just headline numbers.
Key Takeaways
CII released a report on 28 April 2025 urging India's startups to shift from valuation-centric to value-scale growth .
India is the world's third-largest startup ecosystem with over 120 unicorns and cumulative funding exceeding $118 billion .
The report calls for patient capital pools for deep-tech and capital-intensive sectors.
Growth-stage and late-stage funding gaps remain a key structural concern despite improved early-stage access.
Chandrajit Banerjee , Director General of CII, said the next phase must focus on sustainable, resilient, and globally competitive enterprises.
India's startup ecosystem must move away from valuation-centric growth and pivot toward a value-scale model anchored in sustainable unit economics and long-term global competitiveness, according to a report released by the Confederation of Indian Industry (CII) on Tuesday, 28 April 2025. The report urges policymakers to realign frameworks with the realities of high-growth, technology-led enterprises.
Key Recommendations from the CII Report
The industry body called on policymakers to improve access to growth capital, establish proportionate regulatory structures, strengthen digital public infrastructure, and foster innovation through dedicated R&D support. It specifically highlighted the need for patient and diversified capital pools to support startups through scale-up journeys, particularly in capital-intensive and deep-tech sectors.
The report also urged the creation of clear, predictable, and innovation-supportive regulatory frameworks that minimise compliance burdens while enabling responsible growth — a balance that critics argue has been difficult to strike in India's evolving policy environment.
Where India's Startup Ecosystem Stands
India has established itself as the world's third-largest startup ecosystem, with over 120 unicorns, a combined valuation exceeding $390 billion, and cumulative funding of over $118 billion. The ecosystem is supported by robust digital public infrastructure, a vibrant entrepreneurial base, and a progressively enabling policy environment, the report noted.
Notably, while access to early-stage funding has improved considerably, the availability of capital for growth-stage and late-stage expansion remains a structural gap — one that the CII report identifies as a priority concern.
The Structural Shift Underway
According to the report, India's startup ecosystem has matured into a new phase marked by a structural transition from valuation-led growth to value-driven, innovation-led development. This evolution signals a deeper focus on operational discipline, sustainable unit economics, and long-term global competitiveness.
Chandrajit Banerjee, Director General of CII, said that India's startup ecosystem is at an inflection point and that
Point of View
But the CII report implicitly acknowledges a deeper anxiety: that a decade of valuation-chasing has produced fragile enterprises rather than durable ones. The call for 'patient capital' and 'proportionate regulation' is well-worn language — the harder question is why late-stage capital remains scarce despite $118 billion in cumulative inflows. The structural gap between early-stage enthusiasm and growth-stage discipline points to a market failure that policy alone cannot fix. Without credible metrics for 'value-scale' — not just valuation — this risks becoming another well-intentioned report that reframes the problem without resolving it.
NationPress
2 May 2026
Frequently Asked Questions
What does the CII report on India's startup ecosystem recommend?
The CII report recommends shifting India's startup policy focus from valuation-centric growth to a value-scale model emphasising sustainable unit economics, operational discipline, and long-term global competitiveness. It calls for improved growth capital access, proportionate regulation, stronger digital infrastructure, and R&D support.
What is India's current standing in the global startup ecosystem?
India is the world's third-largest startup ecosystem, with over 120 unicorns, a combined valuation exceeding $390 billion, and cumulative funding of over $118 billion, according to the CII report released on 28 April 2025.
Why is late-stage startup funding a concern in India?
The CII report highlights that while early-stage funding has improved, capital availability for growth-stage and late-stage expansion remains a structural gap, particularly in capital-intensive and deep-tech sectors that require sustained, long-term investment.
Who is Chandrajit Banerjee and what did he say about Indian startups?
Chandrajit Banerjee is the Director General of the Confederation of Indian Industry (CII). He stated that India's startup ecosystem is at an inflection point and that the next phase of growth must be anchored in building enterprises that are sustainable, resilient, and globally competitive.
What is the difference between valuation-led and value-driven startup growth?
Valuation-led growth prioritises headline funding rounds and unicorn status, while value-driven growth focuses on sustainable unit economics, operational discipline, innovation capabilities, and long-term competitiveness — the model the CII report advocates for India's next phase.
