OPINION | Indian startups: Why Piyush Goyal touched a raw nerve?

Commerce Minister Piyush Goyal has stirred a hornets' nest by asking the Indian startup community to shift its focus from grocery delivery to deep tech sector like semiconductor, machine learning, robots and AI. At the Startup Maha Kumbh, he presented a slide titled "India vs China : The Startup Reality Check". Goyal asked: "Are we going to be happy being delivery boys and girls?..Is that the destiny of India?..This is not a startup, this is entrepreneurship... What are Chinese startups doing? Robotics, machine learning, electric vehicles, 3D manufacturing and next generation factories". Goyal said, he knew he would be criticized for his remarks, but "we have to be willing to learn, to evolve, and aspire for bigger and better...we have to be bolder and we should not shy of competition." The minister said, "among our startups, somebody is making fancy icecreams, or gluten free biscuits, while some are happy making quick delivery apps. How can we develop our infrastructure through such startups? How can they benefit our economy?" I think, Goyal's remarks carry weight. Such startups will never be helpful in achieving our goal to make India "viksit" (developed) by 2047. The issue is serious. It is about our nation's future. Goyal said, India has the world's third largest eco-system after the US and China.  In 2006, India had only 450 startups. Today, there are 1,69,000+ startups and out of them more than 100 are unicorns (meaning startups having valuation of more than a billion dollars). Of course, there are Indian startups working in space, defence, critical and emerging technology sectors, and in deep tech and making chips, but their number is few. Goyal's remarks were countered by quick commerce starup Zepto founder Aadit Palicha, BharatPe founder Ashneer Grover, Infosys board member Mohandas Pai on social media. Palicha wrote, "it is easy to criticize consumer internet startups in India, especially when you compare them to the deep technical excellence being built in US/China... there are almost 1.5 lakh real people who are earning livelihoods on Zepto today...Rs 1,000-plus crores of tax contribution to the govt per year, over a billion dollars of FDI brought into the country and hundreds of crores invested in organizing India's backend supply chains (for fresh fruits and vegetable). If that isn't a mriacle in Indian innovation, I honestly don't know what is." Mohandas Pai wrote that India has no shortage of innovators, the problem lies with government polices and lack of investment. Piyush Goyal went to the Startup Maha Kumbh again and clarified saying,  he only wanted to raise the morale of our startups. I think what Piyush Goyal said was correct. He showed the mirror to Indian startup founders because he wanted to encourage young innovators. His remarks should be taken in that spirit. Indian startups today are giving jobs to lakhs of young people, but most of them hail from poor and lower middle class. Whether  food delivery apps or marketing or service apps, only young people from economically weaker sections are getting jobs. This is a positive side. But these startups are only creating delivery boys and it is not helping our economy, infrastructure or exports. Piyush Goyal's worries are justified. The government earmarked Rs 2500 crore for startups, kept Rs 500 crore outlay in budget for giving them loans at cheaper rates, provided tax-free holiday and no capital gains tax for first three years, big companies which give loans to startups are getting tax benefit, and yet after giving so many incentives, many of the startup founders are happy creating home delivery apps. This is surely cause for worry. The world is changing fast. Our new delivery apps cannot compete with giants like Amazon and Flipkart, and by the time, our startups reach their level, many new changes would have occured in the marketplace. Our startup founders will have to look at the future. That is why Piyush Goyal cited the example of China, which began work on semiconducters, microchips, AI nearly ten years ago, and is today reaping benefits. Had our startups worked on those lines, India would have benefited. Now that the US has imposed stiff tariff on China, our companies have found good openings in international market, but we neither have the products nor the infrastructure to take advantage. Countries like Taiwan and South Korea may get the edge.

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