By: Rohit Kumar Singh
Commerce & Industry Minister Piyush Goyal’s recent remarks at the Startup Mahakumbh offer a timely and necessary critique of India’s startup ecosystem. While acknowledging and applauding the remarkable growth and innovation within the sector, Goyal urged startups to shift their focus from low-value ventures like food delivery and hyper-fast logistics to high-impact sectors such as semiconductors, robotics, and deep-tech.
This call for introspection is not only valid but essential for ensuring the long-term sustainability and global competitiveness of India’s entrepreneurial landscape.
Success Story – India’s startup ecosystem has undeniably achieved significant milestones. In 2025, startups raised $2.5 billion in Q1 alone, marking an 8.7% increase from the previous year. The country ranks third globally in terms of startup funding, trailing only behind the United States and United Kingdom. Additionally, IPO activity has surged, with 23 startups preparing for public listings this year, demonstrating investor confidence in Indian innovation.
Moreover, Tier 2 and Tier 3 cities are emerging as hubs of entrepreneurial activity, addressing local challenges in agriculture, healthcare, and education. This decentralization is a promising trend that underscores the inclusivity and potential of the ecosystem.
Challenges Highlighted by Goyal – Despite these achievements, Goyal’s critique points to critical gaps that need addressing. Many startups focus on replicating existing business models rather than innovating in transformative sectors like deep-tech. For instance, while Chinese startups lead globally in semiconductors and EV technologies, Indian startups often prioritize instant grocery delivery or niche consumer products. This approach risks creating businesses with limited long-term economic value.
Goyal also raised concerns about brain drain, where innovative ideas are sold to foreign companies at undervalued prices. Without robust support for homegrown innovation, India risks losing its intellectual capital to global competitors.
Introspection and Accountability – The minister’s statement is a welcome departure from usual platitudes showered upon the startup ecosystem. He chose to call a spade a spade. This candid critique should not be seen as a rebuke but rather as a constructive challenge to India’s brightest young minds—a nudge in the right direction.
Such statements from senior ministers are vital for fostering a culture of introspection and accountability within the startup ecosystem. While it is easy to bask in the glory of unicorn valuations and funding milestones, true progress lies in addressing systemic gaps and building businesses that create long-term economic value. Goyal’s remarks serve as a wake-up call for founders and investors to rethink their priorities and align their efforts with national goals.
India’s startup community must welcome this kind of leadership—one that is unafraid to challenge the status quo and push for meaningful innovation. By embracing this vision, Indian entrepreneurs can rise to the occasion, leveraging their talent
Why Deep-Tech Matters – Deep-tech industries such as artificial intelligence (AI), robotics, and semiconductors are pivotal for driving economic growth and technological leadership. Globally, these sectors are shaping the future of industries ranging from healthcare to manufacturing. Yet, India has only about 1,000 startups in deep-tech—a number Goyal described as “disturbing”.
Investing in deep-tech offers multiple benefits:
- Economic Value: High-tech industries generate higher revenue per employee compared to low-skill sectors.
- Global Competitiveness: Innovation in AI and robotics positions India as a leader in cutting-edge technologies.
- Sustainability: Unlike short-term ventures, deep-tech solutions address systemic challenges and create lasting impact.
Roubust Ecosystem the Way Forward: To realize Goyal’s vision for a more impactful startup ecosystem, several steps need to be taken:
- Encourage Deep-Tech Funding: While late-stage funding dominates ($1.8 billion in Q1 FY25), early-stage investments in deep-tech must be prioritized. Industry bodies like CII and FICCI can play a crucial role by facilitating the creation of dedicated funds for innovation-driven startups.
- Policy Support: Recent reforms like abolishing the angel tax have boosted investor confidence. Further incentives for R&D in high-tech sectors can accelerate growth.
- Promote Intellectual Property (IP): Startups should focus on building IP-driven solutions rather than adapting global models. This shift will ensure that Indian innovations remain competitive globally.
- Leverage Tier 2 & Tier 3 Cities: The rise of ‘Bharat’ presents an opportunity to address localized challenges through deep-tech solutions tailored to rural needs.
- Collaborate with Academia: Universities can serve as incubators for deep-tech innovation by fostering research partnerships with startups.
Balancing Growth with Purpose
India’s startup ecosystem is at a crossroads. While it continues to attract record-breaking investments and global attention, its long-term success depends on aligning entrepreneurial efforts with national priorities. Goyal’s remarks serve as a wake-up call for founders and investors alike to rethink their strategies.
The path forward lies not in abandoning consumer-focused ventures but in diversifying into sectors that drive meaningful change—whether through AI-powered healthcare diagnostics or sustainable EV technologies. By doing so, Indian startups can not only capture global markets but also contribute significantly to domestic economic growth.
In conclusion, Piyush Goyal’s critique is not an indictment but an invitation—an invitation to evolve beyond short-term gains toward creating an ecosystem that truly adds value to the nation’s economy and society. As India moves forward into 2025 with optimism and resilience, this introspection could be the catalyst for its next wave of innovation-driven growth.
(The author is Member, National Consumer Disputes Redressal Commission & former secretary to govt of India)
Courtesy PIB, Srinagar.
