So, in April 2025, something interesting happened at the Startup Mahakumbh 2025. Indian Minister of Commerce & Industry Piyush Goyal spoke in front of a room of attendees about what’s afoot in India’s startup ecosystem.
Sure, you might have heard about India becoming the third-largest startup ecosystem in the world with close to 160,000 certificates issued to startups, as of December 2024. And you might have heard about India’s burgeoning startups and how they might contribute to India hitting the $5 trillion mark. Typically, startup-themed events might entail self-congratulatory applause or milestones or how to raise funding or how to scale more effectively, but Piyush wasn’t having any of it.
His premise seemed to be, without pulling any punches: India needs to focus on quality, not quantity, when it comes to its startups.
The Minister remarked that India is focusing on making food delivery or hyper-delivery apps and creating cheap labour in order for people with disposable incomes to have meals and groceries without leaving their homes, while, on the other hand, China was focusing on building EVs, AI, global logistics, robotics and semiconductors. He outlined that Indian startups were predominantly clustered around consumer Internet sectors, like food delivery, quick commerce, fantasy sports – which obstinately refuse to leave my YouTube ad space – and influencer-driven.
Piyush was said to have, also, lamented about the selling of promising Indian startups to foreign investors at sums he considered paltry, like ₹25 lakhs or ₹50 lakhs, urging entrepreneurs to grow and maintain their ownership and for more domestic capital to enter the ecosystem. So, is it that Indian innovation primarily ends up enriching foreign entities? In many ways, India might, already, be considered a back-office to the rest of the world in terms of software.
As a comparison and by my using two very extremes, one of the latest developments in India’s startup ecosystem is the idea of delivering humans in 10 minutes for expertise and guidance, while China shook the world with DeepSeek in 2025. It’s something that might make you wonder: are we getting complacent with our startups? Do we have limited ambition? Are our startup themes somewhat superficial, instead of hard-hitting and actually impactful? Do we have startups in India creating only convenience, thereby making us dumber, less creative and less agile?
Zepto co-founder Aadit Palicha, whose age is less than mine and whose success is infinitely greater, had some things to say about this damning indictment while not specifically referring to it. According to Aadit, whose startup is a q-comm unicorn, his venture created nearly 150,000 livelihoods, furnished more than ₹1000 crore in tax contributions annually, invested hundreds of crores in organizing India’s backend supply chain and a billion dollars in FDI.
Aadit, also, added that India doesn’t have its own large-scale foundational AI model, because great Internet companies haven’t been built yet, a claim that might raise an eyebrow or two in India. He stated that the big players in AI today include Facebook, Google, Alibaba and Tencent and cloud computing was scaled by Amazon; all of these started off as consumer Internet companies. According to him, consumer Internet companies have the ability to drive this innovation, because they have the best data, talent and capital to put behind it.
So, could we see a Swiggy or a JustDial build the next LLM in India that captivates the interest of the anticipating globe? Maybe, there might be a missing link between these consumer Internet startups and foundational DeepTech capabilities. What does that evolution from consumer Internet to foundational AI look like? If that’s a path to take, that means these Internet companies in India might need some real serious upskilling.
Piyush was said to have, also, outlined that India has the largest number of STEM graduates passing out of universities to play a role in facilitating more delivery personnel in India. The premise might be that the training one might get from a STEM university might be more for technical or innovative or more productive roles to build breakthrough inventions, but the outcome ends up being creating “low-skilled” gig jobs.
Does that mean that these STEM graduates are underutilizing their potential and training for high salaries? Should these STEM graduates be nurtured to help pioneer electric mobility solutions or semiconductor tech or help build the next RoboCop? Would some IIT graduate be happier contributing to building a semiconductor, as opposed to figuring out 10-minute rider logistics in Bengaluru?
Though, there might be some mavericks in Indian startups and it’s not all bad; maybe there are some who demonstrate that DeepTech or CleanTech or GreenTech aren’t entirely out of India’s reach. Unfortunately, startups in those sectors might still have to deal with inadequate funding ecosystems or regulations that might not necessarily be conducive to their growth. So, does that mean that India might continue to stagnate in the “shallow waters of surface-level innovation”? Is today’s complacency or comfort potentially burrowing the way for more vulnerabilities tomorrow?
Of course, it’s easy to say that these sectors should have capital pools willing to bolster R&D investment or that investors should embrace more risk. But, unfortunately, this kind of funding requires patient capital and investors have LPs to answer to, as well. Would anyone be interested in building a VC ecosystem with 10-15-year exit horizons? Anyone? Bueller?
But, is that investor shift even realistic? Would those focused on consumer-facing startups suddenly and dramatically pivot towards DeepTech? That’s, like, a total culture shift. Maybe, domestic VC funds might already be structured to have quick exits and may not care for long gestation periods for their portfolio businesses. Plus, nobody likes any of that science-y or technical jargon.
Maybe, support infrastructure might also vary. In the Union Budget 2024-2025, India was said to have allocated around $1.2 billion to AI, while China is said to be planning to invest about $140 billion to develop AI tech. Will India have to depend on countries, like China or Taiwan, for foundational tech? If there are tensions between India and one of those countries, oops! So, will that tech sovereignty by India be built brick by brick?
Quick commerce and food delivery is something we might exalt. For instance, Zepto was the most funded startup in 2024 from a VC perspective and one of the most funded from a PE perspective. But, if one were to zoom back, instant grocery delivery seemed to be suffering in 2022, which is pretty close to the funding gold rush year of 2021.
A Turkish startup called Getir had announced it was cutting more than 4000 people from its staff globally at a time when it was valued at around $12 billion. Getir, also, acquired a company called Gorillas which had about a billion dollars invested into it. England-bound Zapp was said to have shuttered operations across regions in the UK. To be fair, any company can have operational issues, but it was interesting how q-comm companies seemed to have a slightly turbulent time after 2021’s funding profligacy. So, should these styles of ventures build the future of India? Can they sustain?
And can education play a role in building the kind of ventures Piyush wishes for India? Where more experiential learning can be fostered to make students more hands-on, irrespective of whether it’s a STEM field or not? To think entrepreneurially instead of just securing employment somewhere?
What about media coverage? How many times have you seen Zomato in the headlines or mentioned on social media? Could more be done to celebrate entrepreneurs who are solving hard problems or those creating breakthroughs in complex or cumbersome realms? Maybe, if the role models change, so do the aspirations.
But, if suddenly all these big startups were inspired by Piyush’s words, left their startups and focused on building India’s next wave of DeepTech ventures, would that even play out or are they in too deep? Could someone, like Sriharsha or Deepinder or Aadit or Sachin (not Tendulkar), accomplish that with all their institutional knowledge and network and whatever they’ve accumulated and accomplished till now?
Could India’s established consumer-facing startup founders build factories, supply chains and logistics effectively for their hypothetical hardware startups? When there’s a brain drain going on in India, maybe, they might know how to build company culture or how to structure compensation in a way that might retain Indians. Or maybe, with all their past experience, they could attract specialized operational leaders based on their connections and reputations. Plus, with their investor relationships, they might get to curry favour and raise large amounts of patient capital to fund R&D. Now, that could make an Indian DeepTech venture feasible or even cool. When was the last time a DeepTech venture curated the kind of cool marketing Zomato or Duolingo engages in?
Maybe, these renowned Internet startup founders might not know all the science and jargon underpinning DeepTech startups, but they might know a thing or two about building a successful business. In theory, their co-founder or CTO could provide that deep and practical DeepTech expertise, so it all works out.
At the same time, maybe, consumer-focused operations, which might be at high speed and at high volume, might differ from manufacturing complexities. Perhaps, it’s a whole different ball game. Would these consumer-facing startup founders be able to play the long game? Or would they just end up being figureheads?
Maybe, consumer-facing startups provide income to people from a lower strata of society or those with not much education. A robotics or AI or semiconductor startup, on the other hand, might only make those from elite universities or those with the most technical training super-rich. So, who’s more sweet and impactful between the two?
At the same time, are we giving too much importance to DeepTech? It might be a classic case of caring about science over humanities. Typical Indian parent mentality. A startup can create value, irrespective of sector. Just because it’s an AI startup, is it creating more value than a food delivery startup? One might have to go by the lowest common denominator.
People might use AI and relinquish their creativity, decision-making and analytical thinking to technology. In what world is that good or noble? Compare that to someone getting a tiny bit of freedom in the gig economy of a food delivery platform. Maybe, that AI is, also, then, creating convenience the way a q-comm platform is. Is Alibaba profoundly advancing human knowledge, intellect and creativity? Maybe, it’s just feeding the machine of global consumerism, not being altruistic in the spirit of human innovation and progress for the betterment of human society. If China’s killing it in the robot department and if those take away jobs from human beings, is it something to applaud and cheer, the way all the Kangs were at the end of Ant-Man & The Wasp: Quantimania?
Basically, one may not be better than the other. Both might have their upsides and downsides without the need to glorify startups from either country.
And it’s not like India’s darling startups haven’t built foundational infrastructure in terms of logistics or warehousing. It’s because Blinkit could leverage its logistics that it could flirt with the idea of 10-minute ambulance services. Maybe, these startups have dramatically improved access to fresh food or groceries or medicines in smaller regions. Can one say that an AI startup, like DeepSeek, has direct and immediate human outcomes? Maybe, it’s too early to say.
And one might even question why someone wants to become an entrepreneur. Is it about having autonomy or agency, as opposed to some corporate job? Is it a desire to become a unicorn or get on Shark Tank? Is it about the name and fame around becoming an established startup founder? Is it a desire to get bought out? If so, should it go back to being about solving fundamental challenges that plague society and genuinely change lives for the better? Or will someone’s business be transient, evaporating with the next market downturn? Are you craving meaningful impact? Legacy? Purpose? Genuine and long-term influence?
Is it time for India to innovate beyond convenience or does the way India delivers suffice, for now?
