Indian Government Partners with Paytm to Boost Startup Growth

An Indian government agency has partnered with a prominent digital payments firm Paytm to promote innovation and boost the growth of manufacturing and fintech startups.

The Department for Promotion of Industry & Internal Trade (DPIIT) has entered into a Memorandum of Understanding (MoU) with Paytm, which stands for ‘Pay Through Mobile’. This collaboration will enable Paytm to offer mentorship, infrastructure support, market access, and funding opportunities to startups, aiding their growth and innovation.

According to the company’s website, over 20 million merchants and businesses in India utilize Paytm for digital payments, with a mission to integrate 500 million unserved and underserved Indians into the mainstream economy. Paytm is a subsidiary of One97 Communications, a multinational technology company based in India.

The aim of the DPIIT-Paytm partnership is to provide entrepreneurs with vital resources, empowering them to create advanced payment and financial technology solutions, as stated in a press release from the Indian Ministry of Commerce & Industry, which oversees DPIIT. 

Paytm made headlines internationally just over a year ago when the Reserve Bank of India imposed restrictions on Paytm Payments Bank due to compliance issues. A BBC report in February 2024 referred to Paytm as a ‘rockstar Indian fintech start-up fac[ing a] serious crisis’. In January, Paytm’s founder and CEO, Vijay Shekhar Sharma, clarified that the bank operates as a separate entity and acknowledged that “lessons had been learned.”

The MoU, signed by DPIIT director Dr. Sumeet Kumar Jarangal and Sharma, sets the stage for both parties to conduct workshops that focus on regulatory and compliance support, as well as guidance in collaboration with industry and government organizations.

The partnership will also support fintech hardware startups through ‘mentorship and innovation guidance’, and will offer infrastructure and market access support, allowing startups to test, validate, and refine their products while ‘leveraging Paytm’s extensive merchant network.’

DPIIT joint-secretary Sanjiv Singh said in the 26 February announcement that by “leveraging Paytm’s fintech expertise and infrastructure, we aim to support entrepreneurs in overcoming challenges, scaling their ventures, and contributing to India’s emergence as a global innovation hub.”

DPIIT was established in 1995 and assumed its current form more than six years ago (January 2019) when the Department of Industrial Policy & Promotion was renamed after internal trade was added to its responsibilities.

‘With this collaboration, DPIIT and Paytm reaffirm their commitment to positioning India as a global innovation hub, fostering technological advancements, and driving economic growth.’

The company will help fintech hardware manufacturers to grow through an initiative called ‘Paytm for Startups’.

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