India

Purvi Asher, Partner - MHCO India’s startup ecosystem has entered a phase of maturity where growth is no longer limited to early-stage innovation. Expansion, scalability, and global integration now define the trajectory of modern startups. Entrepreneurs are not only building businesses for local markets but are also positioning their ventures for international reach. Several economic, regulatory, and technological factors are shaping this evolution. This article explores the key trends influencing business expansion within India’s startup ecosystem and how these developments are creating new opportunities for entrepreneurs. Strong Economic Momentum and Market Depth India continues to demonstrate strong economic resilience. Its expanding middle class and increasing purchasing power have created sustained demand across sectors. Startups benefit from access to a large and diverse consumer base. Urban markets are witnessing rapid digital adoption, while rural markets are gradually integrating into the digital economy. This dual growth pattern offers startups the opportunity to scale across multiple segments. The expanding consumer base also supports innovation. Businesses are able to test and refine products in varied market conditions, which strengthens their competitive position. Regulatory Reforms Supporting Business Growth Government reforms have played a crucial role in shaping the startup ecosystem. Policies aimed at simplifying compliance and encouraging entrepreneurship have improved the ease of doing business. Digital platforms have streamlined processes related to registrations, filings, and approvals. Entrepreneurs exploring company formation in India now experience greater efficiency and transparency. Regulatory clarity has reduced uncertainty and improved investor confidence. This has contributed to increased participation from both domestic and international stakeholders. Rise of Sector Specific Innovation India’s startup ecosystem is witnessing diversification across sectors. While technology remains dominant, other industries such as healthcare, fintech, edtech, and renewable energy are experiencing significant growth. Sector specific innovation allows startups to address unique challenges and create tailored solutions. This approach enhances scalability and market relevance. The growth of deep technology ventures is particularly notable. Startups are investing in artificial intelligence, blockchain, and data analytics to build advanced solutions. Such innovation attracts global investors and strengthens India’s position as a technology driven economy. Expansion Beyond Metropolitan Cities Startup activity is no longer confined to major cities. Tier two and tier three cities are emerging as new hubs for entrepreneurship. Improved infrastructure and digital connectivity have enabled this shift. Lower operational costs and access to untapped markets make these regions attractive for expansion. Startups can establish operations in smaller cities while serving national and global markets. This trend also contributes to inclusive economic growth. It creates employment opportunities and promotes regional development. Entrepreneurs are increasingly recognising the potential of these markets and incorporating them into their expansion strategies. Growth of Digital Infrastructure Digital transformation continues to shape business expansion in India. High internet penetration and widespread smartphone usage have created a robust digital ecosystem. Online platforms enable startups to reach customers across geographies. Digital payments and e commerce have simplified transactions and improved accessibility. Government initiatives aimed at digitalisation have further strengthened infrastructure. These developments support innovation and enable startups to scale efficiently. The integration of technology into business operations has become essential for growth and competitiveness. Increased Access to Funding and Investment Access to capital has improved significantly in recent years. Venture capital firms, private equity investors, and angel networks are actively investing in Indian startups. Global investors are showing increased interest in India due to its growth potential and market size. This has resulted in higher funding volumes and improved valuation of startups. Government backed funds and incentives have also supported early-stage ventures. These initiatives provide financial stability and encourage innovation. The availability of funding enables startups to expand operations, invest in research, and enter new markets. Focus on Scalable Business Models Startups are increasingly adopting scalable business models to support expansion. Technology driven platforms allow businesses to grow rapidly without proportional increase in costs. Subscription based services, digital marketplaces, and platform economies are gaining popularity. These models enable efficient resource utilisation and long-term sustainability. Scalability also enhances investor appeal. Businesses with clear growth potential are more likely to attract funding and strategic partnerships. Entrepreneurs are focusing on building flexible and adaptable models to navigate changing market conditions. Legal Structuring and Corporate Governance As startups expand, legal structuring becomes critical. Proper corporate governance ensures compliance with regulatory requirements and builds credibility. The preference for private limited company registration in India reflects the need for structured business operations. This form of entity offers advantages such as limited liability and ease of investment. Legal compliance is essential for maintaining investor confidence and avoiding disputes. Startups must adhere to statutory requirements and maintain transparent records. Professional guidance can assist in managing legal obligations and ensuring smooth operations during expansion. Globalisation and Cross Border Expansion Indian startups are increasingly exploring international markets. Global expansion provides access to new customers, partnerships, and revenue streams. Cross border operations require careful planning. Businesses must consider regulatory requirements, cultural differences, and market dynamics. Intellectual property protection and compliance with foreign laws are essential for successful expansion. Startups must adopt a strategic approach to manage risks and ensure sustainable growth. India’s growing reputation as a startup hub enhances its global standing and attracts international collaboration. Emphasis on Sustainability and Responsible Growth Sustainability has become a key consideration for modern businesses. Startups are integrating environmental and social responsibility into their operations. Investors are increasingly prioritising businesses with sustainable practices. This shift influences funding decisions and market perception. Startups focusing on clean energy, waste management, and sustainable products are gaining traction. This trend reflects a broader movement towards responsible business practices. Sustainability not only addresses environmental concerns but also creates long term value for businesses. Challenges in Business Expansion Despite significant opportunities, startups face several challenges during expansion. Regulatory compliance can be complex, particularly for businesses entering multiple markets. Competition is intense, requiring continuous innovation and differentiation. Access to skilled talent may also vary across regions. Infrastructure limitations in certain areas can affect operations. However, ongoing reforms and investments aim to address these challenges. Entrepreneurs must adopt a strategic approach and remain adaptable to overcome these obstacles. Future Outlook of India’s Startup Ecosystem The future of India’s startup ecosystem remains promising. Continued economic growth, technological advancement, and policy support are expected to drive expansion. Emerging technologies will create new opportunities for innovation. Startups will play a key role in shaping industries and addressing global challenges. Collaboration between government, industry, and academia will further strengthen the ecosystem. This integrated approach supports sustainable growth and development. India is likely to remain a leading destination for entrepreneurship and investment in the coming years. Conclusion India’s startup ecosystem is undergoing a transformative phase. Key trends such as digitalisation, regulatory reforms, and access to funding are shaping business expansion. Entrepreneurs are leveraging these developments to build scalable and innovative ventures. While challenges exist, the opportunities for growth are substantial. A strategic approach, supported by legal compliance and market understanding, is essential for success. As the ecosystem continues to evolve, startups in India are well positioned to achieve global impact.

Argus Partners is pleased to announce that it has advised health and wellness platform, Cult.fit (Curefit Healthcare Private Limited), on its Series G fundraise of approximately INR 440 crore from Temasek, through its investment arm, MacRitchie. This transaction is significant as a late-stage investment in one of India’s leading integrated health and fitness platforms, reflecting continued institutional investor confidence in the consumer wellness and fitness sector. The team at Argus Partners advising Cult.fit consisted of Ashwin Krishnan (Partner) and Shivali Srivastava (Associate). Anindya Ghosh (Partner) provided strategic inputs on the transaction. Read more at: Entrackr, INC42.  

Chandhiok & Mahajan (C&M) has elevated 12 lawyers in its latest promotions round, reinforcing its next-generation leadership as the firm continues to grow on the back of complex, high-value work across practices. The promotions cut across corporate and M&A, disputes, restructuring, real estate, and competition—areas that have seen sustained demand as clients navigate increasingly sophisticated transactional and regulatory environments in India. Two lawyers have been promoted to Counsel, three to Managing Associate, and seven to Senior Associate. The cohort has played a central role in advising on a range of mandates, including cross-border M&A, private equity investments, high-stakes disputes and arbitration, large insolvency processes, and multi-jurisdictional merger control filings. Counsel The Counsel promotions strengthen the firm’s disputes and restructuring capabilities. Saurabh Bachhawat brings extensive experience in securities law and commercial litigation, with a strong presence before the Supreme Court, High Courts, and key tribunals such as SEBI and SAT. Savar Mahajan continues to build the firm’s restructuring and insolvency practice, advising creditors, resolution professionals, and stakeholders across complex proceedings. Managing Associates At the Managing Associate level, the promotions reflect depth across corporate and transactional work, alongside regulatory and sectoral expertise. Shivani Pathak focuses on M&A and private equity transactions, advising on cross-border investments and complex commercial arrangements. Nicky Collins has been closely involved in regulatory aspects of transactions, particularly in competition law and merger control, including in technology-driven markets. Aditya Pandey has developed a well-rounded real estate practice spanning transactions, advisory, and disputes. Senior Associates The Senior Associate cohort highlights the firm’s investment in building specialist capability at scale. In disputes, Naman Golechha and Zoya Junaid advise on complex commercial litigation, arbitration, and regulatory matters, including cross-border disputes. In restructuring and insolvency, Aishwarya Adlakha has developed a strong practice, regularly appearing before the NCLT, NCLAT, and the Supreme Court of India. The competition team—Aileen Aditi Sundardas, Bhavika Chhabra, Riddhika Dumane, and Uday Bharat Bali—has been actively involved in merger control filings, enforcement matters, and behavioural advisory across sectors including technology, insurance, chemicals, pharmaceuticals, digital platforms, and manufacturing.   Managing partner Sujoy Bhatia said: “Our clients increasingly expect nuanced, commercially grounded advice on complex matters. Each of these colleagues has demonstrated strong judgment, technical depth, and a commitment to client service. They represent the next generation of leadership at the firm, and we are delighted to recognise their contributions. These promotions reflect both the strength of our people and our commitment to building a deep, institution-led practice.”   With more than 100 lawyers across New Delhi, Mumbai, Bengaluru, and Hyderabad, C&M continues to position itself as a full-service firm focused on high-quality, bespoke advice for sophisticated mandates.  

The consumption of real estate space has evolved significantly over time, particularly in the commercial segment. According to a report published by Cushman & Wakefield, India is a leading global player in the strength and maturity of flexible working spaces. It is therefore safe to state that flexible and managed working or co-working spaces represent the future of corporate and commercial  real estate. Until a few years ago, most occupants of corporate commercial space would execute a leave and licence or a conventional lease deed, which would be registered as per The Registration Act, 1908, if such agreement was executed from year to year, or for any term exceeding one year. Such an evolution has blurred the lines between traditional leases and service agreements. A significant question that arises in the context of service agreements is whether they are mandatorily required to be registered under the provisions of The Registration Act, 1908. Understanding the concept of service agreements: Managed working spaces typically operate on a model wherein the owner of such space offers fully equipped premises, inter alia furniture, fixtures, and internet connectivity required for an office setup. Additionally, the space provider offers amenities such as maintenance, upkeep, and other operational support to ensure the setup remains functional. The occupants of such spaces are usually charged service fees computed on the basis of the number of seats occupied. Crucially, the structure of the agreement is such that no rights in the immovable property are transferred in favour of the occupant or service recipient. These agreements are intentionally designed to grant only limited usage rights to the occupant of the premises, while the service provider or owner retains all rights in the immovable property. Decoding the requirement for registration of service agreements under The Registration Act, 1908 (“Act”): Section 17 of the Act provides for the documents for which registration is mandatory. The relevant extract of the provision is reproduced below: “17. Documents of which registration is compulsory.—(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely:— (b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property; (d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;” Now, as per the aforesaid provision, leases for immovable property for a term exceeding one year are required to be registered. The rise in managed office spaces has given way to service agreements that do not sit harmoniously within the traditional property law framework, including section 17 of the Act as stated above. The key question is whether such service agreements fall within the ambit of section 17 of the Act and are thereby required to be compulsorily registered. To determine the requirement of registration of a service agreement, it is pertinent to analyse the substance of the agreement over its nomenclature. “What’s in a name?” A great deal, as it turns out the courts of law in India have consistently pierced through the “name” of a document to examine the substance therein, as analysed hereinbelow: In the matter of Associated Hotels of India Ltd. v. R.N. Kapoor, AIR 1959 SC 1262 the Hon’ble Supreme Court of India laid down the tests to distinguish a lease from a licence. The Court held that the substance of the document prevails over its form, and the real test is the intention of the parties. If the document creates an interest in the property, it amounts to a lease; whereas if it merely permits use of the property while legal possession remains with the owner, it is a licence. The Court further observed that exclusive possession generally indicates tenancy, though surrounding circumstances may rebut such inference. In the matter of M.N. Clubwala v. Fida Hussain Saheb, AIR 1965 SC 610, the Hon’ble Supreme Court of India held that since the stallholders had only limited, conditional, day-time use of the stalls and the landlords retained the legal possession and control necessary to fulfil their statutory duties, no leasehold interest arose. The above principle is of particular relevance to managed office spaces, wherein the occupant is granted limited and conditional use of the premises during specified hours, while the service provider retains legal possession and overall control of the property, thereby negating the creation of any leasehold interest in favour of the occupant. Similarly, in the matter of Delta International Ltd. v. Shyam Sundar Ganeriwalla, AIR 1999 SC 2607, the Hon’ble Supreme Court of India reiterated that the intention of the parties must be ascertained primarily from the terms of the document itself. However, where the language of the document is ambiguous or alleged to be camouflage, the surrounding circumstances and the conduct of the parties may also be taken into consideration to determine the true nature of the relationship between the parties, i.e., whether it constitutes a lease or a licence. From a combined reading of the said judicial pronouncements, the following principles emerge to determine whether a service agreement for a managed office space requires registration under the Act: First, the substance of the agreement must be examined over its form or nomenclature. If the agreement, in effect, creates an interest in immovable property, it would be treated as a lease regardless of the nomenclature assigned to it by the parties. Second, if the legal possession and control over the premises remain with the service provider, and the occupant is merely granted a right to use the space in conjunction with services, the arrangement would constitute a licence or a service agreement and not a lease. Third, the retention of the right to relocate the occupant, the provision of shared amenities, the charging of fees on a per-seat basis, and the absence of exclusive possession are indicative of a service arrangement rather than a traditional lease. While the judicial position broadly supports the view that a bona fide service agreement does not require registration under the Act, it is imperative that such agreements are carefully structured to reflect the true nature of the arrangement. Conclusion: The emergence of managed office spaces has introduced a paradigm that does not fit harmoniously within the traditional property law framework. An agreement that is genuinely structured as a service arrangement wherein the provider retains possession and control, offers bundled services, and does not transfer any interest in immovable property would not attract the requirement of compulsory registration under section 17 of the Act. On the contrary, an agreement that is merely dressed as a service agreement but operates, in substance, as a lease would be subject to the registration requirement regardless of its nomenclature. Author: Ms. Shruti Choudhary - Senior Associate