A report by Nasscom, an industry body, said that India will double its startups to 10,500 by 2020

New Delhi (Sputnik) — Russian companies are sparing no effort to make a splash in India, currently the hottest market in the world for startups. First off the block has been crowd-sourced courier service Dostavista which raised $800,000 to launch its services in the major metros of Mumbai, Delhi and Bangalore, with technical support from Russia.

A day later, India’s largest IT industry association Nasscom explained why Russian companies are also jostling for space in the Indian startup market. India now ranks as the third largest startup base and such ventures are likely to more than double by 2020, said a Nasscom report.

Interest in diversification into the Indian business sector is in keeping with the sentiments expressed by Russian President Vladimir Putin to widen the basket of commercial interaction with India.

Dostavista is not the only Russian firm eyeing India’s fast-growing startup community. Russian conglomerate Sistema JSFC aims to invest in two to three Indian startups every quarter to scale up its presence beyond telecom. The company has already launched an INR 3.4 billion fund called Sistema Asia Fund (SAF), which has a five-member team, including former Helion Venture executive Dhruv Kapoor.

The Nasscom report “Indian Startup Ecosystem Maturing-2016” said the country is in third position behind the US and UK. Nearly 1,400 new startups expected to take root by the end of 2016 and the numbers have risen by 8-10 % from the previous year. Nasscom expects the number of startups to keep growing and cross the 10,000 mark by 2020.

The Nasscom report identified India’s IT capital as Bengaluru (formerly Bangalore), the Delhi region (including the satellite towns of Gurgaon and Noida), and Mumbai as the major startup hubs.

In terms of vertical growth, the most sought after sectors are health-technology, finance-technology and education-technology. About 650 active startups have reportedly received total funding of approximately $4 billion suggesting a healthy growth of the ecosystem, the report said.

“The start-up landscape in the country is becoming the epitome of innovation, with companies bringing out solutions that are aimed at solving locally relevant issues. This is exactly what Dostavista is doing. Nasscom believes that the contribution by start-ups have been growing at a rapid rate and there is huge potential in terms of business stability, revenue growth and further innovation,” said Nasscom chairman C.P. Gurnani.

In fact, many of India’s top corporate leaders believe that job creation in the future will come from technology-driven startup platforms and services aggregators. Infosys co-founder Nandan Nilekani is one of them. “Somebody like Ola has a capacity to create a few hundred thousand driver entrepreneurs. So, I think you are going to see a lot more of that. And that’s how job creation will happen by aggregation on platforms,” Nilekani was quoted by News Agency PTI.

The startup ecosystem will also create thousands of jobs, a high priority goal for Prime Minister Narendra Modi. By 2020, the expected 10,500 startups will provide jobs to over 2,10,000 people, according to the report.

The government is promoting entrepreneurship and skill-based training through the “Start-up India Stand-up India” initiative, which has established over 30 new academic incubators. More significantly, a whopping 66% of the new incubators are being promoted in tier-2 and 3 cities across the country.

Another encouraging sign is that student entrepreneurs are showing increased interest this year with a reported 25% growth with over 350 startups being founded by young students.

As per the report, investor interest is moving beyond online retailing. New ventures generating investor interest are related to Fintech, Healthtech, Edutech, data analytics, B2B commerce and artificial intelligence, are seeing interest, said the report.