Indian Startups are Making Fancy Ice Creams as China Builds EVs: Piyush Goyal
Indian Commerce Minister Piyush Goyal has called for a major introspection within India’s startup ecosystem, criticising its overemphasis on instant convenience services while lagging in deeptech and high-impact industries. Speaking at Startup Mahakumbh, Goyal warned that many Indian startups are creating businesses with little long-term value, urging a shift toward innovation that truly contributes to the country’s economic and technological growth, as reported by CNBC. “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,” Goyal stated. Comparing India’s startup landscape to China’s, he pointed out that while Chinese firms are pioneering developments in semiconductors, robotics, EVs, and battery technologies, many Indian startups are focused on “fancy ice creams” and grocery delivery. Goyal took aim at startups prioritising food delivery apps and hyper-fast logistics over deeptech innovation, stating that they often reduce unemployed youth to cheap labour rather than fostering meaningful technological advancements. Deeptech Remains a Weak Spot Goyal expressed concern over India’s underdeveloped deeptech sector, highlighting that only about 1,000 startups are engaged in this field. Calling it a “disturbing situation,” he stressed the urgency of increasing investment and focus in deeptech to keep up with global competition. While acknowledging the success of food delivery and e-commerce companies, he questioned their long-term contributions, arguing that such businesses fail to generate high-value employment or technological breakthroughs. “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 remarked. In a direct appeal to investors and entrepreneurs, Goyal urged them to reconsider their business models. He specifically mentioned Shark Tank India and called on investors like boAt’s Aman Gupta to focus on sustainable, innovation-driven startups rather than short-term, low-impact businesses. Goyal also raised concerns about India’s ongoing brain drain, lamenting that innovative startups are frequently sold to foreign companies for small sums. “It’s heartbreaking to see a bright startup idea sold for ₹50-60 lakh to foreign companies,” he said, calling on India’s unicorns and business leaders to create a fund to support domestic innovation. He urged industry bodies like CII, FICCI, and Assocham to step up and help scale homegrown deeptech ventures. “We must inspire the next generation to think creatively and work towards groundbreaking solutions, which are the true drivers of economic growth,” he concluded. “Lack of Capital Is the Real Problem, Not Just Innovation, ” Mohandas Pai Industry veteran and former CFO of Infosys, Mohandas Pai responded to Goyal’s remarks on X, acknowledging the presence of deeptech startups in chip design, IoT, robotics, and EV technologies but highlighting the severe lack of capital as a major bottleneck for their growth. “There are many small deeptech startups in India growing rapidly, but where is the capital? Indian startups received $160 billion from 2014-24, while China got $845 billion, and the US secured $2.3 trillion. Long-term investors like endowments and insurance funds still do not invest, despite the government’s efforts,” Pai pointed out. He also criticised regulatory challenges, stating that AIF investments are facing excessive oversight, and RBI’s remittance policies are discouraging overseas investors. Pai further noted that while India has the technology for fast-charging EV buses, most public transport systems are dominated by PSUs, making it nearly impossible for startups to sell their innovations. Calling for urgent intervention, he urged the government to address the regulatory roadblocks and investment gaps holding back India’s deeptech ecosystem.
Calling it a “disturbing situation,” he stressed the urgency of increasing investment and focus in deeptech to keep up with global competition.
Speaking at Startup Mahakumbh, Goyal warned that many Indian startups are creating businesses with little long-term value.
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Mohit writes about AI in simple, explainable, and often funny words. He's especially passionate about chatting with those building AI for Bharat, with the occasional detour into AGI.