India’s Commerce Minister Piyush Goyal recently made headlines with remarks concerning the country’s start-up ecosystem, igniting a significant debate across social media platforms. Goyal emphasized that Indian entrepreneurs need a shift in priorities. He encouraged them to shift their focus from consumer products to going deeper with more ambitious innovations in deep tech. This ongoing dialogue has received mixed reviews from the entrepreneurial community and industry watchers.
At a recent event, Goyal made a passionate plea to Indian investors that they focus their funding on consumer internet companies. He argued that these enterprises should be profitable, allowing them to invest their earnings into aspirational projects. He cited Amazon as an example, starting as a consumer internet company and making the successful transition into cloud computing. Goyal further noted that major players in artificial intelligence, such as Facebook and Google, started within the consumer internet space before evolving into tech giants.
Goyal stated, “We have to be willing to evolve and learn. [If] we want to be bigger and better, then we have to be bolder and we should not fight shy of the competition.” His remarks resonated with large swathes of entrepreneurs. More importantly, they viewed ASICs’ initial success as a rallying cry for more ambition in the Indian start-up scene. As others pointed out, his comments represented a targeted criticism – at best – of a red-hot ecosystem that currently drives close to 20% of India’s GDP.
Boom in the Indian start-up ecosystem has been nothing short of spectacular in the last few years. Today, more than 4,000 of these deep-tech start-ups are flourishing around the country. This number is expected to more than double to 10,000 by 2030. Journalist Abhijeet Kumar highlighted this alarming trend in the Business Standard. In 2023, just 5% of start-up funding in India has flowed to deep-tech sectors, contrasted with a remarkable 35% invested in China. This aims to protect programs which are vital to India’s claim of leadership in these important technological areas.
Entrepreneurs such as Aadit Palicha, co-founder of the ultra-fast-delivery app Zepto, slammed Goyal’s view. Palicha emphasized the advancements in fields like machine learning and robotics that some of these other start-ups have been pioneers in. Too many Indian start-ups continue to focus on lifestyle products. He remarked, “They were making leaps in machine learning, robotics and building ‘next-gen factories that can compete with the rest of the world’, India’s start-ups were still largely focussed on lifestyle products like gluten-free ice creams.”
Further, the debate has served to shine greater light on the barriers that exist to prevent deep-tech initiatives reaching fruition. Mohandas Pai, one of the key figures behind India’s tech boom, was quoted expressing alarm over anti-investment sentiment. “People are not willing to take long-term risks. We need long-term ‘patient’ money [for deep tech start-ups to thrive],” he asserted. This call is for much larger investment. To us, it signals a telling and growing desire for financial backing to maintain the ambitious projects that they’ve completed for the long haul.
The reactions to Goyal’s comments underscore a broader concern about India’s position in the global race for technological advancement. As highlighted by an editorial in a leading newspaper, “As the deep-tech race intensifies globally, it is clear that India will have to do a lot to catch up with these countries.” This sentiment resonates among many who believe that fostering an environment conducive to deep-tech innovation is essential for India’s future economic success.
Despite the differing viewpoints, one common theme persists: there is a pressing need for Indian entrepreneurs and investors to embrace bold and innovative ideas. Most industry leaders agree that planting a culture of deep-tech creation can boost India’s ranking. This move would put the country in a much better position to compete globally.