16 January 2026: MAINS CURRENT AFFAIRS

MAINS Current Affairs includes A Decade of Startup India & 18th Japan–India Foreign Ministers’ Strategic Dialogue

ECONOMY

1. A Decade of Startup India

Context

PM Modi participated in a programme marking 10 years of the Startup India initiative on National Startup Day.

Startup India, launched on January 16, 2016, is a transformative national programme aimed at promoting entrepreneurship and enabling investment-led growth.

India’s Startup Ecosystem

India has become one of the world’s largest startup ecosystems, with over 2 lakh startups (2025).
India ranks as the 3rd largest startup ecosystem globally.
Major hubs—Bengaluru, Hyderabad, Mumbai, Delhi-NCR—lead the transformation.
India hosts 120+ unicorns valued at $350+ billion.
Global Innovation Index (GII) 2025: India improved from 48th (2020) to 38th (2025).
Nearly 50% of startups now originate from Tier-II and Tier-III cities, showing widespread entrepreneurial diffusion.

Challenges in the Startup Ecosystem

Funding Constraints & Volatility

Startups face inconsistent access to capital, especially during global downturns.
High dependence on foreign venture capital makes them vulnerable to external shocks.
Early-stage and deep-tech startups struggle with funding due to long gestation periods.

Regulatory Complexity

Multiple compliance rules across Centre and States increase costs.
Frequent regulatory changes and tax ambiguities discourage innovation and risk-taking.

Talent Shortage & Skill Gaps

Shortage of skilled professionals in AI, semiconductors, cybersecurity, and other emerging domains.
Infrastructure & Ecosystem Gaps
Startup infrastructure is concentrated in metro cities, limiting growth in smaller towns.

Weak R&D and Innovation Culture

Low private-sector R&D spending.
Poor industry–academia collaboration.
Limited awareness of intellectual property rights, restricting innovation and commercialization.

Government Initiatives

Sector-Specific and Ministry-Led Measures

AI Centres of Excellence: Dedicated AI hubs and innovation clusters to boost AI-based startups and research.
India’s Digital Public Infrastructure (DPI): Combines public investment with private innovation, accelerating digital transformation across payments, identity, lending, health, logistics and governance.

Conclusion

Over the last decade, India’s startup ecosystem has grown exponentially, making it the world’s third largest.

The collaborative efforts of government, industry, investors, and innovators have strengthened the ecosystem, driving economic growth and empowering the next generation of entrepreneurs.

International Relations

2. 18th Japan–India Foreign Ministers’ Strategic Dialogue

Context

At the 18th India–Japan Strategic Dialogue, both countries reaffirmed the upward trajectory of their Special Strategic and Global Partnership, with focus on economic security, resilient supply chains, critical technologies, and defence cooperation.

Key Highlights

Launch of the Japan–India Private-Sector Dialogue on Economic Security (B2B) in early 2026.
Will identify five priority sectors:

Semiconductors, Critical Minerals, ICT, Clean Energy, Pharmaceuticals.

Establishment of the Japan–India AI Strategic Dialogue under the Japan–India AI Cooperation Initiative (JAI).
Japan will invite 500 highly skilled Indian AI professionals by 2030 for joint research and collaboration.
Early convening of the Joint Working Group on Mineral Resources to strengthen resilient supply chains.
Both sides emphasised de-risking the global economy and ensuring stability of critical supply chains.

Significance of Japan for India

Economic Partner

- Major source of FDI, infrastructure financing, and advanced technology.

Strategic Ally

- Shares India’s vision of a Free, Open, and Inclusive Indo-Pacific (FOIP).

Supply Chain Resilience

- Key partner in India’s strategy to diversify and de-risk supply chains from over-concentrated global hubs.

Technology & Innovation

- Deepening cooperation in AI, semiconductors, clean energy, and advanced manufacturing.

Global Governance

- Supports India’s role in promoting a rules-based international order and reforms in multilateral bodies.

Challenges / Concerns

Implementation Gap

Numerous dialogues exist, but slow conversion into large-scale industrial and technological outcomes.
Limited Trade Volume
Despite strong ties, bilateral trade remains below potential, especially compared to Japan’s trade with other partners.

Technology Transfer Constraints

Export controls, high costs, and procedural delays limit access to cutting-edge defence and semiconductor technologies.
Discussions on UNICORN radar technology show promise but progress is slow.

Supply Chain Vulnerabilities

Continued dependence on third countries for critical minerals and components.

Way Ahead

Strategic convergence must be converted into co-production, co-innovation, and co-investment to realise the full potential of the partnership.
Greater focus on joint manufacturing, technology sharing, and long-term supply chain partnerships will enhance resilience and confidence.