STPI bets on tier-2, tier-3 cities to build India’s next wave of tech entrepreneurs

STPI DG Arvind Kumar speaking to Moneycontrol at the Indian Mobile Congress

The Software Technology Parks of India (STPI) is shifting its focus from metro-driven software exports to building innovation ecosystems in India’s smaller cities, its director general Arvind Kumar said.

Speaking to Moneycontrol at the India Mobile Congress, Kumar said the organisation is now actively expanding its presence in Tier-2 and Tier-3 towns to make them key contributors to India’s digital economy.

“Most of the new development, innovations, and services are coming from Tier-2 and Tier-3 cities,” Kumar said. From just three centers in its early years -- Pune, Bengaluru and Bhubaneswar -- STPI today operates 68 centers across the country, with the majority in smaller towns.

These centers, he added, are not just office spaces but complete ecosystems providing startups with seed funding, mentorship and market access.

The Software Technology Parks of India (STPI) is an autonomous body under the IT ministry that manages technology infrastructure, incubates startups and supports product development across India’s IT and electronics sectors.

Software services to software products

Kumar said that while India has been a global leader in software services, it has lagged in building indigenous software products. STPI’s new chapter, which he calls “STPI 2.0,” is focused on changing that.

The organization has set up 24 domain-specific Centers of Entrepreneurship (CoEs) across India, each designed to promote innovation in specific sectors. These include a blockchain CoE in Gurugram, AI centers in Mohali and Bengaluru and a healthtech CoE in Lucknow.

“We are supporting more than 2,000 startups, many of them deep-tech,” Kumar said. “They have already created more than 1,000 IPRs and 2,000 products.”

Push for startup funding

Kumar said that STPI has also rolled out several funding schemes targeting different stages of startup development. STPI also participates in the GENESIS and Samriddhi initiatives under the Ministry of Electronics and IT, while its CoEs offer additional seed funding of ₹5–15 lakh.

"We have provided around Rs 30–40 crore to startups, and they have gone on to raise more than Rs 600 crore from private investors. That is our real success,” he said.

Talent, a challenge

Kumar noted that the challenges faced by India’s IT sector have evolved significantly. "Today, the challenge is talent,” he said.

STPI is also investing in skilling, upskilling and reskilling professionals, particularly in emerging technologies like AI and blockchain.

“Doesn’t matter whether you are six years old or sixty—you can adopt technology, unlearn and learn to stay relevant,” Kumar said.