India is encouraging large corporations and unicorns to establish incubators for manufacturing startups.

The Department for Promotion of Industry and Internal Trade (DPIIT) has reached out to major corporations such as Apple, Tata Group, Hyundai, Skoda, and Maruti, as well as unicorn companies like boat, Moglix, Meesho, and Ease My Trip, to establish incubators for manufacturing startups in India, according to informed sources.

The DPIIT has provided these companies with a memo outlining a blueprint for creating these incubators and indicating that they can apply for government funding. Moneycontrol has examined this document. An insider mentioned, "It's a voluntary initiative. The government believes there are currently not enough manufacturing incubators in the country... Nearly all major companies and unicorns have been approached." He also noted, "There is no specific monetary fund planned for the initiative at this time. However, it could be established in the future."

The memo highlights the strategies and impacts of six major corporations—Amazon, Nike, Samsung, BMW, AstraZeneca, and Spotify—that collaborate with startups. It states, "Corporates can gain a competitive edge and attract new customers through technology transfer from incubated startups. Developing new innovations is resource and time-intensive. Collaborating with incubated startups can help mitigate these costs."

The document outlines various funding avenues for corporate incubators, including government funding and support programs, partnerships with academic institutions or other entities through co-investment models, and using corporate social responsibility funds in accordance with the seventh schedule of the Companies Act.

This initiative coincides with the government’s efforts to boost the manufacturing sector's contribution to the economy, which has remained around 15% for a long period. As part of this effort, production-linked incentive schemes have been launched for 14 sectors, including electronics, textiles, food products, high-efficiency solar PV modules, advanced chemistry cell batteries, drones, and pharmaceuticals, with a total outlay of ₹1.97 lakh crore.

The memo emphasizes that the government has "proactively recognized the importance of incubators as key components of the startup ecosystem and launched several initiatives to enhance the incubation landscape in the country." Various ministries and departments, such as the DPIIT, NITI Aayog, Ministry of Micro, Small and Medium Enterprises, Ministry of Science and Technology, Ministry of Electronics and Information Technology, Department of Agriculture and Farmers Welfare, Department of Defence Production, and the Ministry of Mines, are all running programs to support incubators.

Despite a slight slowdown in April, the Indian manufacturing sector started the first fiscal quarter strongly, according to the latest HSBC PMI data. Operating conditions improved at the second-fastest pace in over three-and-a-half years, driven by strong demand. Companies saw a significant increase in new business and scaled up production accordingly, leading to the third-fastest buildup of raw material stocks since the survey began 19 years ago.