In a sharp critique of India’s startup ecosystem, Commerce Minister Piyush Goyal has urged them to reflect on their true value proposition and the impact they are making on the Indian economy.
Speaking at Startup Mahakumbh, Goyal highlighted the challenges within the startup sector, pointing that many startups in the country are overly focused on food delivery apps and hyperfast logistics. Instead of any innovation in deeptech or more impactful industries, they often turn unemployed youth into cheap labour, Goyal added.
India vs China: A Tale of Two Ecosystems
Goyal pointed out that while Chinese startups are leading the way in areas such as semiconductors, robotics, electric vehicles (EVs), and battery technologies, many Indian startups are focusing on creating “fancy ice creams” or instant grocery delivery services, which he suggested offer limited long-term value.
“Indian startups need a reality check in terms of what they are doing. It is essential that we focus on industries that truly add value to our economy. We shouldn’t shy away from competition, but rather strive for innovation and long-term sustainability,” the commerce minister said.
‘Focus on Deeptech Innovation’
Goyal further emphasised that the deeptech sector, which has the potential to drive India’s future growth, remains underdeveloped, with only about 1,000 startups currently involved in this area. Describing this number as a “disturbing situation,” the minister added that greater focus on deeptech innovation was needed to stay competitive globally.
While acknowledging the success of India’s food delivery and e-commerce platforms, Goyal raised concerns about their long-term contributions to the economy. He questioned whether these companies were truly adding value or merely serving to perpetuate low-wage, low-skill labour.
“We need to move beyond the cycle of creating businesses that don’t have any real value. Hyper-fast logistics and instant food deliveries may seem glamorous, but they are not shaping the future of the nation,” he added.
Where Shark Tank India can make a difference
In his remarks, Goyal also called out entrepreneurs and investors, urging them to reconsider their business models and adopt a more holistic approach to growth. He specifically addressed the entrepreneurs featured on the popular show Shark Tank India, appealing to investors and mentors — such as boAt’s Aman Gupta — to reconsider their perspectives and focus on sustainable, value-added businesses.
Persisting brain drain
Expressing concern over the brain drain, Goyal lamented that many innovative ideas are being sold to foreign companies for a fraction of their value. “It’s heartbreaking to see a bright startup idea sold for ₹50-60 lakh to foreign companies.”
Goyal concluded by urging India’s unicorns and established businesses to step up and contribute to a fund dedicated to fostering domestic innovation. He urged industry bodies such as CII, FICCI, and Assocham to collaborate in creating pools of domestic capital that could help scale up homegrown startups, particularly those in the deep-tech and innovation sectors.
Cultivating curiosity and critical thinking
To foster this, Goyal stressed the need to cultivate curiosity and critical thinking among children from an early age in order to prepare them for a future in technological innovation.
“We must inspire the next generation to think creatively and work towards groundbreaking solutions, which are the true drivers of economic growth,” he said.