India is home to the third largest number of technology driven startups in the world, with the US and the UK occupying the top two positions, according to a report.

The study, done by Assocham in association with Thought Arbitrage Research Institute, also revealed that Bengaluru is host to the largest share of technology startups in the country, followed by Delhi NCR and Mumbai, while Hyderabad and Chennai are also quite popular among budding tech entrepreneurs.

"In the technology driven startups, India has moved up to third position with the US occupying the top position with more than 47,000 and the UK with over 4,500.

"India's tech startups numbered around 4,200 up to 2015," the report pointed out.

In terms of total number of startups, comprising both tech and non-tech areas, India again figured among the five largest hosts in the world, along with China (10,000 each).

The US occupies the top slot with 83,000 startups.

IT hub Bengaluru is host to 26 per cent of domestic tech startups, followed by Delhi NCR (23 per cent) and Mumbai (17 per cent). In the 'catching up' category were Hyderabad (8 per cent), Chennai and Pune (6 per cent each).

"The disruptive innovation in technology and process is creating newer Indian startups and foreign investors, including some of the well-known venture capital funds, are showing immense interest in these startups," Assocham President Sunil Kanoria said.

The awareness that a startup is a vehicle of rapid growth through technological disruption and innovation, has to spread across the economy, the report said. Otherwise, if any small traditional business is treated as a startup, then the ecosystem will never develop properly, it added.

The study recommended that synergising 'Startup India' with 'Make in India' and 'Digital India' initiatives has the potential to expand the domestic ecosystem for new entrepreneurs.

It also suggested tax exemption for research and experimentation to encourage fresh ideas without fear of failure. Recommending a Stanford University model in various Indian universities, the Assocham-Thought Arbitrage paper said courses on creation of small businesses should be encouraged in campuses.