- Friday, April 04, 2025
The minister said the new startups should focus on preparing the nation for the future and invest in high tech sectors like machine learning, robotics, and artificial intelligence
By: India Weekly
COMMERCE and Industry Minister Piyush Goyal has asked the Indian startup community to shift their focus from grocery delivery and ice cream making to high tech sectors like semiconductor, machine learning, robotics, and artificial intelligence.
He also said there is a need for more Indian investors into the startup ecosystem.
“Are we going to be happy being delivery boys and girls … Is that the destiny of India … this is not startup, this is entrepreneurship … What other side is doing — robotics, machine learning, 3D manufacturing and next generation factories factories,” Goyal said in New Delhi at the Startup Mahakumbh on Thursday (3), comparing the nature of Indian startups with that of Chinese.
The minister said the new startups should focus on preparing the nation for the future.
“Do we have to make ice cream or chips?” he asked.
He also underscored the evolving role of startups in driving India’s economic and technological growth.
He assured that the government will handhold and support those who face challenges in their startup journey, encouraging them to persevere and try again.
The minister stressed the need for increasing domestic capital investments, stating that a strong foundation of indigenous investment is crucial to reducing dependency on foreign capital and ensuring long-term economic resilience.
Goyal emphasised on the need to attract more domestic investors to strengthen India’s capital base and ensure self-reliance.
Indian startups raised $11.3 billion in venture capital funding in 2024, up 43 per cent from previous year.
While many social media users described the minister’s remarks as a ‘wake up call’, it drew sharp reaction from the startup industry.
Zepto CEO Aadit Palicha has put up a strong defence citing the company’s contribution to jobs, FDI and terming it a “miracle in Indian innovation”.
Underlining the role played by consumer internet companies in pushing technology-led innovation, Palicha – one of the most recognised faces in the startup circles, and the co-founder of quick commerce company Zepto – argued that the startup ecosystem, the government, and the owners of large pools of Indian capital need to actively support the creation of these local champions, “not pull down the teams that are trying hard to get there”.
“It is easy to criticise consumer internet startups in India, especially when you compare them to the deep technical excellence being built in US/China. Using our example, the reality is this: there are almost 150,000 real people who are earning livelihoods on Zepto today – a company that did not exist 3.5 years ago,” Palicha said in a LinkedIn post.
Palicha went on to count many other economic contributions, and placed many arguments.
Why doesn’t India have its own large-scale foundational AI model, he quipped, then added “It’s because we still haven’t built great internet companies”.
“Most technology-led innovation over the past 2 decades has originated from consumer internet companies. Who scaled cloud computing? Amazon (originally a consumer internet company). Who are the big players in AI today? Facebook, Google, Alibaba, Tencent etc. (all started as consumer internet companies),” he said.
Consumer internet companies drive innovation because they have the best data, talent, and capital to put behind it.
“We need to build great local champions in the internet that are generating hundreds of millions of dollars in free cash flow (FCF) first if we ever want to get a piece of great technology revolutions. The startup ecosystem, the government, and the owners of large pools of Indian capital need to actively support the creation of these local champions, not pull down the teams that are trying hard to get there,” he argued.
Zepto, he said, is still far away from being a great Internet company that can hold a candle to the global best, but is “executing day in and day out to get there”.
Former managing director of BharatPe Ashneer Grover said it is the politicians who need a reality check.
He wrote on X: “The only people in India who need a ‘reality check’ are it’s politicians. Everyone else is living in the absolute reality of India.
China also had food delivery first and then evolved to deep tech. It’s great to aspire for what they’ve done – maybe time for politicians to aspire for 10%+ economic growth rate for 20 years flat before chiding today’s job creators. Maybe time to change ‘public discourse’ from history to science !
Thanks Minister sir for starting this healthy debate.”
Former Infosys CFO Mohandas Pai strongly criticised Goyal for his comments on Indian startups and their ability to evolve quickly.
Pai wrote on X: “Minister Piyush Goyal should not belittle our startups but ask himself what has he done as our Minister to help deep tech start ups grow in India? It is easy to point fingers at them. We have a hostile Finance Minister who harassed start ups on Angel tax for many years, do not allow endowments to invest, insurance cos still do not invest whereas they do globally.”
