On April 3, Union Commerce Minister Piyush Goyal drew parallels between Indian and Chinese startups and said the companies at home lack innovation.
During his speech at the Startup Mahakumbh, Goyal called out food delivery companies and said they “are turning unemployed youth into cheap labour so (the) rich can get their meals without moving out of the house.”
He further asked if we, as a nation, are “happy about being delivery girls and boys” while the Chinese startup ecosystem is “making semiconductor chips, EV batteries” and more.
Startup founders and operators, from Zepto CEO Aadit Palicha to former BharatPe chief Ashneer Grover and Shaadi.com’s founder Anupam Mittal, all weighed in and countered Goyal’s statements.
Zepto’s Palicha said Zepto has created over 1.5 lakh jobs, contributes over Rs 1,000 crore in taxes each year and has brought in over $1 billion of foreign direct investments (FDI) into India. “If that isn't a miracle in Indian innovation, I honestly don't know what is,” Palicha wrote on X (formerly Twitter).
He added that it is easy to criticise consumer internet startups in India but said that “the startup ecosystem, the government, and the owners of large pools of Indian capital need to actively support the creation of these local champions, not pull down the teams that are trying hard to get there.”
Former BharatPe chief Ashneer Grover said the Chinese startup ecosystem, the second-largest in the world, has evolved over time from what it was earlier.
“China also had food delivery first and then evolved to deep tech. It’s great to aspire for what they’ve done - maybe time for politicians to aspire for 10%+ economic growth rate for 20 years flat before chiding today’s job creators,” Grover wrote on X.
Credit where due
While Goyal did criticise Indian startups on April 3, he has, in the past, also lauded their efforts. “Young and vibrant minds are fuelling India's startup space with innovative digital solutions that enhance ease of living and generate employment opportunities for our large talent pool,” Goyal had posted on X on June 22, 2024 during his meeting with Zepto’s Palicha.
Like Grover, Zepto’s Palicha, in his recent post, said that the US and Chinese startup ecosystem – the largest two startup ecosystems in the world – have only evolved in the past two decades. And all the tech titans, such as Amazon, Facebook (meta), Google, Alibaba, Tencent and others started as consumer companies first and are now leading the charge on AI and other deep tech related products.
“Consumer internet companies drive this innovation because they have the best data, talent, and capital to put behind it. We need to build great local champions in internet that are generating hundreds of millions of dollars in free cash flow (FCF) first if we ever want to get a piece of great technology revolutions,” Palicha said while speaking on the need for consumer companies, including food delivery, rapid grocery and more.
Better ease of doing business
Other founders, running smaller businesses, also called out the government.
“...What we need is the government’s ongoing effort to reduce unnecessary regulations and compliance hurdles. The goal should be to align with the standards of innovative countries,” Ganesh Sonawane, founder of Frido, a consumer brand, posted on X, while urging the government to improve the ease of doing business.
Goyal said people only want to run a business, hence the country lacks innovation. He said “India has only 1,000 deep tech startups” which is not enough.
Shaadi.com’s Mittal said the main reason why India doesn’t have too many deep tech companies is because there is not enough support.
“From AI and space-tech to material science, Indian entrepreneurs are ready to take on the world. But capital and the ecosystem for growth and commercialisation are severely lacking. Founders can do most things but not everything,” Mittal rebutted.
In government’s support
While a slew of founders contested Goyal’s comments, others like Bhavish Aggarwal of Ola and Sridhar Vembu of Zoho were in support.
“Time to build the future not the past,” Aggarwal of Ola posted on X along with an emoji of “100” showing agreement. Aggarwal, runs an AI company (Krutrim), a consumer business (cabs and food delivery) and an electric vehicles arm (Ola Electric).
Sridhar Vembu, founder and chief scientist of Zoho Corporation, said that startups and entrepreneurs should not expect financial support from the Government but rather take the minister’s speech as a challenge.
“The government cannot invent a better operating system or a smarter robot. The government should not even fund such things - it is not usually good at picking winners and losers. The government can at best conduct competitions where companies participate and then buy the best Indian products.
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