India’s burgeoning startup ecosystem is grappling with a paradox in its patent landscape. Despite emerging as the world’s sixth-largest patent filer in FY26, the country faces significant challenges in converting applications into granted patents. This gap is particularly pronounced among startups, which are often seen as the engines of innovation.
### The Patent Chasm
In FY26, India recorded a remarkable 1.43 lakh patent applications, reflecting a 30% year-on-year increase. However, the number of patents granted dropped by 36% to 21,439, with startups securing only 649 approvals. This disparity highlights a critical issue: while Indian entrepreneurs are eager to innovate, they struggle to navigate the complexities of the patent system.
A significant obstacle is Section 3(k) of the Indian Patent Act, which excludes algorithms and computer programs from patentability unless they demonstrate a technical advancement. This provision leaves many software innovators in a legal grey area, leading to numerous abandoned applications.
### Administrative Hurdles
The Indian patent office has faced administrative challenges that have slowed the patent approval process. An internal restructuring in 2024 initially cleared backlogs but left a gap when 370 examiners were promoted to senior roles. Although 407 new examiners were sanctioned in early 2025, training delays have only recently restored processing capacity.
This administrative bottleneck affects sectors like AI, where filings have surged sevenfold over the past decade. Yet, India’s approval timelines lag behind those of advanced economies, potentially stalling high-quality innovation.
### Implications for Startups
The patenting challenges have broader implications for India’s startup ecosystem. With the government recognizing over 55,200 startups in FY26, the highest since the ‘Startup India’ initiative began in 2016, the need for a robust IP framework is critical. Startups, particularly in tech-driven sectors, rely on patents to secure funding and establish market credibility.
The current environment could deter foreign investors and stifle innovation if not addressed. As India aims to position itself as a global IP powerhouse, reforms in the patent system are essential to convert application surges into tangible competitive advantages.
As the government continues to recognize and support startups, addressing these patenting hurdles will be crucial. Streamlining the approval process and clarifying legal ambiguities could foster an environment where innovation thrives, ensuring that India’s startups remain competitive on the global stage.
