Indian Startups and their Growth Challenges

In response to Commerce Minister Piyush Goyal’s comments about Indian startups during the Startup Mahakumbh, Anupam Mittal, a judge on Shark Tank India and the founder of Shaadi.com, offered his perspective to emphasize the importance of the current business environment in India.

Mittal highlighted the emergence of tech startups, stating in an X post, “Recently, several deep-tech companies have truly impressed me. From advancements in AI and space technology to developments in material science, Indian entrepreneurs are prepared to compete on a global scale.”

He, however, noted the obstacles in these tech sectors due to insufficient funding and a lack of exposure within the ecosystem for development and interaction. In response to Goyal’s remark about ‘fancy ice creams’, Mittal remarked, “Founders can accomplish numerous tasks but cannot handle everything.”

In his address at the Startup Mahakumbh, Goyal encouraged entrepreneurs to reconsider their value propositions, indicating that an excessive focus on food delivery and logistics may have limited long-term economic contributions. He pointed out that many startups are transforming unemployed youth into low-wage workers instead of innovating in critical fields such as semiconductors, robotics, electric vehicles, and battery technology, where Chinese startups are making strides.

Mittal was not alone in his reaction; others have also reacted strongly to the Commerce Minister’s comments. Aadit Palicha, co-founder of Zepto, shared a robust defense of the role that consumer internet companies play in fostering innovation and employment on X.

“It is simple to criticise consumer internet startups in India, especially when juxtaposed with the technical prowess seen in the US and China,” Palicha expressed.

He provided statistics regarding Zepto’s economic impact: “Today, nearly 150,000 people are earning a living through Zepto — a company that began just 3.5 years ago. The firm contributes over ₹1,000 crores in taxes to the government annually, has attracted over a billion dollars in foreign direct investment, and has invested hundreds of crores into enhancing India’s backend supply chains, particularly for fresh produce. If that isn’t a testament to Indian innovation, I genuinely don’t know what is.”

Additionally, Mohandas Pai, former CFO of Infosys, criticized Goyal’s statements, asserting that the minister should not undervalue startups. Pai questioned the actions taken by the Commerce Ministry to support deep-tech ventures, highlighting the existence of numerous deep-tech startups in India that struggle with adequate capital for rapid growth. He urged the government to provide necessary assistance while cautioning that the ministry’s startup division appears to have become disengaged.