Union Minister Piyush Goyal recently raised questions about the direction and direction of India’s startup environment, triggering a big controversy in the sector. Addressing a public forum, Goyal had stated that Indian startups were more interested in food delivery, betting, and fantasy sports, whereas Chinese startups were leading the way in electric vehicles, battery technology, semiconductors, and artificial intelligence.
“Do we have to produce ice cream or chips? Dukaandari hi karna hai (Do we just want to do shopkeeping?),” Piyush Goyal asked, underlining the imperative for innovation in core technologies rather than gig economy models.
Mohandas Pai Slams Remarks of Piyush Goyal
Responding quickly, Mohandas Pai, former CFO of Infosys and a prominent investor, labelled Goyal’s remarks as useless. “These are poor comparisons. India has startups in all those areas, too, but they are small. Minister @PiyushGoyal should not demean our start-ups but reflect on what he has done as our Minister to enable deep tech start-ups to scale up in India.” Pai wrote on X.
He additionally criticised the financial and regulatory structures of India. “We have an aggressive @FinMinIndia @nsitharaman who bullied start-ups on Angel tax for decades. Do not let endowments invest; insurance cos still do not invest while doing so overseas. @RBI intimidates foreign investors on remittances and AIFs again and again, mistreats them, cos FE rules. China invested 845 billion dollars between 2014 and 2024. India, just 160 billion dollars! Why is Minister @PiyushGoyal @AshwiniVaishnaw not working to address these problems?” he demanded.
Politicians Should Get a Reality Check, Ashneer Grover Demands
Ashneer Grover, who is the co-founder of BharatPe, didn’t have kind words for the politicians either. “The only individuals in India who require a ‘reality check’ are its politicians. Everybody else is staying in the definitive reality of India,” he commented on social media.
Grover has come in defense of the natural evolution of the Indian startup ecosystem, saying, “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% plus economic growth rate for 20 years flat before chiding today’s job creators. Maybe time to change ‘public discourse from history to science!
Zepto Founder Defends Consumer Startups in India
Aadit Palicha, Zepto’s co-founder and CEO, also reacted vehemently. He accepted the criticism but pointed out how consumer internet startups are vital to the economy.
It’s easy to snap at Indian consumer internet startups, particularly if you contrast them with the profound technical distinction being established in the US/China. The truth is this: there are nearly 1.5 lakh actual human beings earning livelihoods on Zepto today,” Palicha said.
He referred to Zepto’s key contributions—paying more than ₹1,000 crore in tax each year, drawing more than a billion dollars of FDI, and deeply investing in India’s supply chain, particularly for fresh produce.
“If that’s not a miracle in Indian innovation, I sincerely don’t know what is,” he said.
Why Consumer Internet Startups Matter for Deep Tech
Palicha argued that large internet companies often pave the way for deeper tech innovations. “Most technology-led innovation over the past two decades has originated from consumer internet companies. Who scaled cloud computing? Amazon. Who are the big players in AI today? Facebook, Google, Alibaba, Tencent – all started as consumer internet companies,” he explained.
He added that businesses such as Zepto can be the foundation for the future generation of Indian innovation if supported accordingly.
“Zepto is still a long way from being a great Internet company that can hold a candle to the world’s best. But we are working day in and day out to get there,” Palicha said.
Startup India: Growth, Unicorns, and Hurdles Ahead
India has close to 20,000 startups, of which there are approximately 4,750 tech-based startups, as per the Startup India platform. The nation has 110 unicorns, but the pace of new unicorn formation has significantly decreased. MoneyView was the last startup to join the unicorn club in September 2024, with a mere five new unicorns in that year.
As the sector keeps expanding, recent remarks by Piyush Goyal have once again sparked a critical debate regarding the future trajectory, policy backing, and promise of India’s dynamic startup ecosystem.