Over 6,300 recognised startups marked as closed, government tells Parliament

A total of 6,385 recognised startups have been categorised as closed as of October 31, according to MCA data. Maharashtra accounts for the highest number. The government said no rise in startup closures has been observed, citing market and business factors

New Delhi: As many as 6,385 recognised startups have been categorised as ‘closed’ as of October 31, according to the data from the Ministry of Corporate Affairs, Parliament was informed on Tuesday.

Recognised startups are eligible for several incentives, such as income tax benefits under the Startup India initiative by the Department for Promotion of Industry and Internal Trade (DPIIT). As of October 31 this year, a total of 1,97,692 entities have been recognised as startups.

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“As on 31st October 2025, 6,385 recognised startups are categorized as closed (i.e., dissolved/struck-off), as per the Ministry of Corporate Affairs (basis data shared on 11th November 2025),” the Minister of State for Commerce and Industry Jitin Prasada said in a written reply to the Lok Sabha.

The maximum number of closed startups is in Maharashtra (1,200). It was followed by Karnataka (845), Delhi (737), Uttar Pradesh (598), Telangana (368), and Tamil Nadu (338).

He said that the government has not observed any increase in startup closures. “Closures that do occur are generally influenced by factors such as the viability of the business model, alignment with market demands, domestic and global economic conditions, the nature of products and services developed, the ability to attract funding, and other business-specific considerations,” he said.

Startup India is an initiative of the government of India. Under this, the government is implementing three flagship schemes, Fund of Funds for Startups, Startup India Seed Fund Scheme, and Credit Guarantee Scheme for Startups, to provide funding opportunities and support startups across sectors at various stages of their business cycle.

Under Section 80-IAC of the Income Tax Act 1961, an eligible startup can claim a deduction of an amount equal to 100 per cent of the profits and gains derived from an eligible business for three consecutive assessment years.

As of October 31, 4,147 recognised startups have received certificates of eligibility under this section. In a separate reply, Commerce and Industry Minister Piyush Goyal said as of October 31, the recognized startups have reported having created over 21.11 lakh direct jobs.