India’s economy is growing fast, as is the interest investors and foreign governments are showing in it. One area of the Indian economy that has really taken off lately is that of startups. In this report, Growth analysis’ New Delhi office presents an introduction of the Indian startup ecosystem to Swedish stakeholders.

In the last few years, India has emerged as one of the world’s largest startup centers. It is expected that India is home to 4 200 startups, making it the third largest startup nation in the world, after the US and the UK. 2015 was a record year for startups in India both in terms of deals being made and in terms of the value of those deals. Similarly, the number of incubators and accelerators has also increased dramatically. The Indian government too, has stepped up its support for startups, launching a special fund to invest in startups as well as offering startups tax breaks and bureaucratic simplifications within the Startup India program.

India’s young population and the country’s fast economic growth coupled with the mobile revolution that India is experiencing are likely to lead to massive consumer growth. A lot of firms are betting that this growth will come from e-commerce, which is the number one business sector of Indian startups. Interestingly, due to India’s large domestic market, most Indian startups, including all but one of its eight unicorns, focus on the Indian market.

Bengaluru is recognized as India’s startup-hub. Moving forward, other cities are beginning to challenge Bengaluru as well as Delhi and Mumbai as the best places to set up a startup in the country. However, the trend of startups shifting headquarters abroad – primarily to Singapore – is picking up steam as companies want to get out of India’s cumbersome bureaucracy, high taxes and poor record of successful public offerings.

More than launching the Startup India program, the key to sustaining India’s startup boom is for the government to continue its efforts in making India easier to do business with – and in.