The recent decision by the ministry of commerce and industry, Government of India, to include cooperatives within the definition of start-ups is a landmark moment. It sends a strong policy signal that cooperative enterprises are not relics of an earlier economic era, but current business models capable of innovation, scale, and impact. By placing cooperatives within the start-up ecosystem—at both central and state levels—the Government has opened a new door for collective entrepreneurship, particularly for youth, women, and community-based enterprises.
Yet, while this recognition is important, it is only a starting point. Cooperatives will not automatically line up to register as start-ups. Individuals in the start-up space will not instinctively form cooperatives. Nor will aspiring entrepreneurs suddenly choose cooperative models over investor-led structures simply because the policy door has been opened. Without deliberate follow-through, this announcement risks remaining symbolic rather than transformative.
The critical question, therefore, is not whether cooperatives have been recognized as start-ups—but what needs to be done now to translate this recognition into real outcomes.
The most immediate and fundamental gap is awareness. Despite India’s long cooperative history—spanning agriculture, dairy, banking, housing, labor, and consumer sectors—there is remarkably limited understanding of what cooperatives actually are, especially among younger generations, policy professionals, and the start-up ecosystem. Many continue to view cooperatives narrowly as government-linked institutions, confined to rural or legacy sectors, or burdened by governance that limits scale. This perception obscures the reality that cooperatives are member-owned enterprises that operate across sectors, generate livelihoods at scale, and combine economic activity with social purpose. The World Cooperative Monitor which ranks just the Top 300 Cooperatives and Mutuals shows they have a combined turnover of US$ 2.7 trillion. If cooperatives are to be meaningfully included in the start-up ecosystem, the first order of work must be active and sustained awareness-building. This is foundational.
What differentiates cooperatives from other start-ups is not merely their legal form, but their identity. This is articulated through the internationally recognized Statement of Cooperative Identity (SCI), which defines cooperatives through shared values—such as self-help, democracy, equity, and solidarity—and principles like member ownership, democratic control, and concern for community. This identity is not ideological ornamentation; it shapes how cooperatives raise capital, distribute surplus, govern themselves, and measure success. The SCI is recognized by United Nations bodies and governments worldwide and should form the conceptual backbone of how cooperatives are positioned within India’s start-up discourse. Ensuring that this understanding is embedded is not the task of government alone. National cooperative federations, cooperative universities, colleges, and training institutions must take responsibility for educating entrepreneurs, policymakers, and the wider public on what cooperative entrepreneurship truly entails.
Against normal start-ups, cooperative start-ups are uniquely positioned to take up more impactful problems of society. Collective entrepreneurship enables the recognition of shared challenges and the design of solutions that are rooted in lived realities, trust, and mutual accountability—often far better than individual or purely investor-driven models. As a result, cooperative start-ups can give rise to several high-impact social enterprises in the near term and provide much-needed innovation to address large, systemic problems that continue to affect the country’s inclusive growth and long-term progress.
The Department for Promotion of Industry and Internal Trade (DPIIT), which anchors the Startup India initiative, has a pivotal role to play. If cooperatives are now recognized as start-ups, this recognition must be visible, intelligible, and actionable. The Startup India portal should include: Clear information on cooperatives as an eligible start-up form, guidance on how cooperative enterprises can register and comply, illustrations of cooperative start-ups across sectors, and clarification on eligibility for incentives, exemptions, and schemes. Equally important, state governments need to explicitly integrate cooperatives into their own start-up policies and state-led innovation initiatives, many of which operate independently of national frameworks. Without this alignment, cooperatives risk being recognized in principle but excluded in practice at the implementation level.
India does not suffer from a lack of successful cooperatives—it suffers from a lack of visibility of their success. From dairy cooperatives (AMUL) that transformed rural economies, to credit cooperatives that enabled financial inclusion (Saraswat Bank, Cosmos Bank), to labour and service cooperatives (Uralungal Labor Contract Cooperative Society, SEWA) that provide dignified livelihoods, India has rich examples of cooperative enterprises that are economically viable and socially transformative. What is needed is a systematic effort to showcase cooperatives not only as economic entities, but as institutions that deliver social, environmental, and cultural value. In an era where start-ups are increasingly evaluated on impact as much as valuation, cooperatives have a compelling story to tell.
The ministry of cooperation has an especially important coordinating role. Recognition of cooperatives as start-ups cannot sit in isolation within one ministry. It requires active liaison with DPIIT, Startup India, finance-related departments, and sectoral ministries to ensure alignment. Key areas where coordination is essential include: Simplification of compliance procedures for cooperative start-ups, clarity on tax exemptions, grants, and eligibility for funding schemes, access to venture capital and blended finance models suitable for cooperatives. Creating multi-stakeholder cooperatives in addition to multi-sector cooperatives need to be encouraged. Without such alignment, cooperatives may be recognized in principle but excluded in practice.
Start-ups thrive not just on policy recognition, but on ecosystems—incubators, accelerators, mentoring networks, academic partnerships, and platforms for experimentation. Here lies a major opportunity. Cooperative-focused incubators, hackathons, and innovation challenges can help demonstrate how collective entrepreneurship can address local needs—from platform cooperatives in the gig economy to community-owned renewable energy, agri-processing, care services, and digital services. The winners of COOP Pitch by the ICA Domus Trust and the International Cooperative Alliance and IIM Kozhikode registered the first women transport (auto workers) cooperative in Chennai. Institutions such as the Tribhuvan Sahkari University, the National Cooperative Development Corporation, and sectoral federations can partner with universities, technical institutes, and innovation hubs to create pathways where cooperative start-ups are nurtured with the same seriousness as investor-backed venture
The recognition of cooperatives as start up aligns closely with the Government of India’s vision of “Sahkar se Samriddhi”—prosperity through cooperation. Treating cooperatives as start-ups reinforces the idea that growth need not be extractive or concentrated, but can be shared, democratic, and rooted in local realities. However, for Sahkar se Samriddhi to move from slogan to system, cooperatives must be fully integrated into the start-up imagination of India. That requires education, institutional support, visibility, and genuine ecosystem-building.
Recognizing cooperatives as start-ups is a welcome and progressive step. It affirms that innovation and entrepreneurship in India need not be limited to individual or investor-led models. Collective entrepreneurship—anchored in democratic ownership and community benefit—has an equal place in the future economy. But recognition alone will not change behavior. What comes next—awareness, alignment, ecosystem-building, and institutional commitment—will determine whether this policy moment becomes a turning point or a missed opportunity.
The door has been opened. Now the harder work of walking through it must begin.
Disclaimer
Views expressed above are the author’s own.
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