Piyush Goyal’s recent comments about Indian startups have sparked a heated debate among entrepreneurs, investors, and the public. At the Startup Mahakumbh, a government-led conclave, Goyal criticized the focus of many Indian startups on lifestyle products like food delivery apps and artisanal brands. He compared this to the innovations in countries like China, which are making strides in machine learning and robotics.
Goyal’s remarks drew strong reactions from the startup community. Some, like Zepto co-founder Aadit Palicha, argued that consumer internet companies are leading technological innovation in India and globally. Palicha pointed out that companies like Amazon, Facebook, and Google, now major players in cloud computing and AI, started as consumer internet companies.
Others, like angel investor Mohandas Pai, highlighted the lack of capital investment in deep-tech startups from both the government and private players. Pai explained that investors favor lifestyle-focused startups because they yield quicker returns, while deep-tech innovations require long-term “patient” money and expensive infrastructure. Many social media users shared their own experiences of the challenges they faced when starting tech businesses in India.
These included difficulties in securing loans, high import taxes on foreign equipment, and excessive bureaucracy in approval processes. However, some entrepreneurs defended Goyal’s comments as a necessary reality check for the startup ecosystem.
Goyal’s critique of startup focus
Vironika S, founder of the edtech app Proxy Gyan, agreed that India’s future global leadership depends on breakthroughs in areas like AI and semiconductors but noted that realistic barriers exist that the government could help alleviate. Despite the challenges, there are positive signs for India’s deep-tech sector. The country currently has 4,000 deep-tech startups, a number expected to rise to 10,000 by 2030.
In 2024, these startups attracted $1.6 billion in funding, a 78% year-on-year increase. As the global deep-tech race intensifies, experts say India will need to do more to catch up with other countries. Recommendations include setting up deep-tech innovation funds, building stronger links between academia and startups, and offering incentives for faster developments in key areas like hardware, AI, biotech, and clean energy.
Meanwhile, veteran investor Sanjeev Bikhchandani has strongly defended Indian startup founders, calling them “heroes” who take risks with their careers and futures. Bikhchandani, who has backed companies like Zomato and PolicyBazaar, emphasized the importance of foreign investment in India’s capital-short economy, especially at a time when Chinese capital is restricted. As the debate continues, it is clear that India’s startup ecosystem faces both challenges and opportunities.
While lifestyle-focused startups have dominated in recent years, there is growing recognition of the need for more ambitious innovation in deep-tech sectors. How the government, investors, and entrepreneurs respond to this challenge could shape India’s economic future in the years to come.
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