Ahmedabad turns civic systems into start-up lab for urban fixes

NEw DelhiOn any daytime, an amerind metropolis malfunctions in myriad shipway — traffic signals that father’t adapt to real-time flow , drains that overflow after a brief spell of rain, or buses that either do not run frequently enough or fail to arrive on time. These are not mere engineering failures, but failures of systems that have struggled to adapt, learn, and respond to growing urban pressures.Ahmedabad is now attempting to change that.In a move that marks a significant shift in how Indian cities procure and deploy technology, the Ahmedabad Municipal Corporation (AMC) last month launched the ‘Ahmedabad Innovation and Startup Policy 2026’. The policy seeks to convert the city’s civic infrastructure — including its Bus Rapid Transit System (BRTS) corridors, CCTV networks, and utility systems — into a “living laboratory” for startups, with an annual allocation of up to ₹50 crore to fund pilot projects.This signals a departure from the municipal corporation’s traditional role as a buyer of technology towards a more collaborative, enabling model—allowing startups to test, refine, and scale solutions on real city systems. Importantly, it addresses long-standing barriers in conventional tendering system of procurement by offering relaxations for startups, including exemptions from prior experience, turnover requirements, and many other tender conditions, along with a Right of First Refusal (ROFR) mechanism for successful pilots.The vision, as stated in the policy document, is “to make Ahmedabad a sandbox of ideas and innovations for urban governance, where startups and innovators can nurture, develop, test, and prove their solutions on the city’s own infrastructure…”“As a city, we believe old ideas have run their course. We need fresh thinking, and our youngsters have plenty of it. This policy will encourage startups to come up with solutions that address local problems and have the potential to scale,” says Banchhanidhi Pani, commissioner, AMC.“Ahmedabad’s challenges are distinct from those of Mumbai or Delhi, so importing standard solutions makes little sense. We need to develop them within the city. Startups and local governments are naturally aligned, as both focus on solving local problems. We are creating strong incentives for innovation and will work closely with startups. In that sense, the corporation sees itself as a co-creator of customised solutions,” he adds.This bold new policy comes at a time when India’s cities grapple with several systemic challenges. Experts say that rigid procurement norms under the General Financial Rules (GFR) and state laws have favoured large contractors, sidelining agile startups capable of addressing hyper-local problems.AK Jain, former commissioner (planning) at the Delhi Development Authority (DDA), says such policies are important as many government engineers and architects are out of step with changing times. “Quite a lot of them have been in service for 30–40 years and are stuck in the old way of doing things. There is often a hesitation to embrace new ideas and technologies. Cities clearly need younger talent that can bring fresh perspectives,” he says.Vivek Agarwal, country director for India at the Tony Blair Institute for Global Change, says the issue runs deeper than procurement. “Technology adoption in Indian cities has been limited because there is no institutional host capable of nurturing pilots into scalable solutions,” he says. “For years, we have equated transformation with building physical infrastructure. Now Ahmedabad has done something more fundamental — it builds the policy infrastructure for innovation through procurement reform, IP protections, and incentive structures that allow solutions to be tested and scaled.”The outdated Tender RajFor decades, Indian municipalities have operated under a tender-driven system that demands high minimum turnover (often ₹50 lakh to several crores), prior government project experience, and substantial earnest money or tender fees.A 2025 analysis of public procurement by Primus Partners, a policy consulting firm, suggests that stringent eligibility criteria such as minimum turnover, prior government experience, and work completion certificates continue to hinder MSME and startup participation at the pre-qualification stage.This is despite several relaxations under the Startup India framework for DPIIT-recognised startups.“The biggest problem with the tendering system is that it is designed for large, established firms, which are geared toward standardised delivery and risk minimisation, leaving little room for experimentation or deeply localised solutions,” says Akash Hingorani, principal architect and co-founder of Oasis Designs, a firm that has worked on several large-scale urban regeneration projects.“A road is not just a road. The space under an elevated corridor, for example, can be activated, and roadside buffers can be used for rainwater management. What is required is a systems approach—enhancing climate resilience, increasing biodiversity, providing shade, and addressing urban heat and flooding,” he says.“So, cities now need to engage people who have the mental space to truly experience and think deeply about them. Younger generations approach mobility, life, and public spaces very differently,” he adds.Milind Mhaske, CEO, Praja Foundation, a Mumbai-based non-profit working on urban governance, agrees: “The problem is while we want good technological solutions, companies are evaluated on turnover, prior experience, and financial strength. As a result, large firms tend to win, while smaller, more capable players are left out. This is not about favouring startups—it’s about getting the best solution for citizens.”He adds that the government often fails to play an enabling role. “It simply releases a tender and steps back. Ahmedabad seems to be attempting to create that enabling environment. But this should not remain a one-off initiative driven by individual officers; it has to become a standard operating procedure. Open up data, invite competition, test solutions, and then select the best one. If it depends on individual officers, it will disappear when they are transferred,” he says.The city as a laboratoryIn fact, Ahmedabad’s model reflects a broader global shift towards treating cities as sites of experimentation. European cities such as Amsterdam, for example, have pioneered the Urban Living Labs approach. Through AMS Institute (Amsterdam Institute for Advanced Metropolitan Solutions) and the city’s Startup-in-Residence (STIR) programme, the municipality provides real urban sites — streets, energy systems, and public infrastructure — for co-creation with startups, researchers, and citizens. Experiments test mobility, energy, circular economy, and other solutions directly in real-world conditions, with clear mechanism for procurement of successful innovations. In the United States, cities such as New York and San Francisco have experimented with GovTech sandboxes — controlled testing environments that allow startups to pilot their solutions on real city problems with relaxed procurement rules, effectively bypassing rigid RFPs (Requests for Proposal) and the lengthy traditional tender process.Hitesh Vaidya, urban expert and former director of the National Institute of Urban Affairs (NIUA), says that like Ahmedabad, all Indian cities should strive to become living laboratories.“Just like students from IIT Kharagpur or IIT Kanpur often go to Delhi or Mumbai to work on urban problems, why can’t the city where the institute is located become their laboratory? If IIT Kanpur develops air quality monitoring devices, they should first test them in Kanpur itself. If successful, the solution can then be scaled to other cities,” says Vaidya, adding every city needs a robust knowledge platform where academic institutions, startups, and the municipal government collaborate. “Only then will ideas move beyond academic exercises and actually get implemented on the ground.”He describes Ahmedabad’s new policy as “bold”, but cautions that Indian cities are generally risk-averse. “Any municipal commissioner thinks twice before trying something new. They will have to learn to take calculated risks for the right solutions. Even under the National Urban Digital Mission, procuring software was relatively easy—the real challenge lies in embedding these solutions into the municipality’s day-to-day processes,” he says, adding, “Innovation cannot operate in isolation; it must align with the city’s long-term vision and strategy.”A template for other cities? One of the biggest barriers startups face in working with municipalities is access to real civic infrastructure and data for testing, says Abhinav Shekhar Vashishtha, co-founder and CEO, WeVOIS, a civic-tech startup specialising in IoT-based waste management solutions.“So, the most important shift is that the city is opening up access to real infrastructure and data. Otherwise it is extremely difficult for startups to get reliable civic data or test solutions on live systems. Governments would usually ask for three completed pilots, but how do you get those pilots in the first place?” says Vashishtha.Agarwal emphasises the need for strong safeguards for data governance. “All civic-tech is built on the foundation of urban data. “However, as Elinor Ostrom, the American political economist, showed, common-pool resources do not manage themselves—they need clear rules on access, purpose, and accountability,” he says.Agarwal advocates for a stronger national institutional framework to support municipal innovation.“Just as the RBI oversees the NPCI for payments, we need a similar institution for city municipalities. The most credible option is a permanent City Innovation Authority under the Ministry of Housing and Urban Affairs (MoHUA), not a temporary mission-mode body, but a statutory authority with in-house engineering capability, co-funding mechanisms, and special procurement rules. States should be required to follow its framework to access central urban grants,” he says.While such institutional reforms could create the enabling framework, their success will ultimately depend on whether startups are able to translate this opportunity into effective real-world solutions.“Unlike large companies, startups have more hunger, work harder, and are more willing to take risks. Given a real chance, startups are more capable than bigger players in solving our urban problems. I believe Ahmedabad’s new policy has the potential to transform public-startup partnerships,” says Vashishtha.