It has come in fits and starts, but India is slowly building a startup world.
FORTUNE – Most entrepreneurs remember vividly when they decided to strike out on their own. For Siddhartha Ahluwalia, the moment came over breakfast, in 2009. Then 22 years old and an engineering student at the Indian Institute of Information Technology & Management in Gwalior, he was interning at India's premier graduate business school -- the Ahmedabad campus of the Indian Institute of Management (IIM-A). An IIM-A student sat down at Ahluwalia's table and started to talk about his own business -- a tech platform that served TV ads at train stations.
"IIM-A is full of energy regarding entrepreneurship," Ahluwalia remembers. "You meet a lot of new entrepreneurs." The fired-up Ahluwalia enlisted three friends as co-founders, and they started work on an advertising platform for doctors' offices.
Ahluwalia went door to door in his hometown of Meerut -- an industrial city 50 miles from New Delhi -- trying to get doctors excited about the product. Ranked as one of India's fastest-growing cities, Meerut is frequently cited as a hub for future growth in India -- an international airport and a major Delhi-Meerut highway are in the works. More importantly for Ahluwalia and his friends, Meerut has several pharmaceutical companies and medical schools.
After receiving feedback from doctors, the team switched its focus from advertising to electronic medical records. They won first place in a business plan competition at an engineering college in a neighboring state. But then graduation hit, along with the harsh realities of the working world.
"We were students, so no one would give us funding," he says. And then there was the matter of family. "In India, when parents fund a child's education, the expectation is that he or she will then get a job and settle down."
So that's what he did. Ahluwalia moved to Delhi and got an IT job at a company that created and managed operational software for companies overseas. He lasted for 11 months before the monotony of it got to him. This time, he went to a relative -- for many years, family savings have provided seed funding for most Indian startups -- and asked for an initial investment.
By April 2012, Ahluwalia was knocking on doctors' doors again, but this time, he noticed an attitude change. "A lot of media attention has been given to entrepreneurship," he said, noting that his parents, who initially balked at his plan, had turned into supporters. "Also, several companies had successful IPOs and exits."
Local success stories have boosted the credibility of entrepreneurship in India. In late June, RedBus, the country's largest online bus ticket vendor, was acquired by a joint Chinese-South African venture for around $125 million. The deal, which is the biggest acquisition to date of an Indian Internet company by a strategic overseas investor, validated the notion that Indian entrepreneurs could create valuable online businesses catering to the domestic market.
Entrepreneurship is a potential boon to a country wondering how exactly to employ its rapidly growing population, especially in towns like Meerut. According to the most recent census in 2011, Meerut has a population of 3.4 million -- but job opportunities lag consumption, as suggested in a 2011 Morgan Stanley report tracking Indian urbanization.
Startups -- particularly tech companies – have been touted as a possible solution, if an ecosystem is built to support them.
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