Startup reality check: Nearly 7,000 recognised firms 'closed', Minister tells why

Jitin Prasada, Union Minister of State for Commerce and Industry, informed Lok Sabha during the second leg Budget Session 2026 that 6,789 recognised startups have been categorized as "closed".

He further informed the House in a written reoply to a question that Department for Promotion of Industry and Internal Trade (DPIIT) has recognised 2,12,283 entities "startups", as of January 31, 2026.

"6,789 recognised startups are categorized as closed (i.e dissolved/struck-off)," Minister told the House, citing the Ministry of Corporate Affairs.

If we look at the break up of these 6789 closed startups, 875 such entities are from from the IT services sector. Healthcare and life sciences has 553, education has 491, food and beverages has 320, and 301 are from agriculture.

As per the minister viability of the business model and alignment with market demands can be driving factors behind the closure of startups.

He further said that there are some other factors domestic and global economic conditions, the nature of products and services developed, the ability to attract funding, and other business-specific considerations too contribute in not so favourable business environment for startups.

With inputs from PTI