Introduction

India’s startup ecosystem is often hailed as one of the fastest-growing in the world. And rightfully so. In just under a decade, India has transformed from a country of “jugaad” innovations to a powerhouse of scalable, tech-driven startups. We’ve seen the emergence of unicorns solving real-life problems—from payment bottlenecks to hyperlocal delivery—creating millions of jobs and reshaping consumer behaviour. The numbers speak for themselves: in 2016, India had fewer than 10 unicorns. By 2023, that number had surged past 110, making it the third-largest startup ecosystem globally, after the US and China. This growth hasn’t been random—it’s been catalyzed by a convergence of factors. Over 800 million internet users, widespread smartphone adoption, and the success of the India Stack (notably UPI, which clocked over 12 billion transactions in December 2023 alone) have created fertile ground for digital-first businesses. Add to that over USD 130 billion in venture capital funding funnelled into Indian startups between 2014 and 2023, and you get an ecosystem that’s moving from imitation to innovation. India’s fintech market is expected to reach USD 1.3 trillion by 2025.

Companies like Razorpay, PhonePe, and Cred have built sleek solutions on top of complex payment rails, making finance accessible even in tier-3 towns. With lower customer acquisition costs and deep engineering talent, Indian SaaS startups like Freshworks, Zoho, and Postman are now competing globally—Freshworks even listed on the Nasdaq in 2021. Though edtech faced a correction post-pandemic, it still raised over USD 2.5 billion in 2022, and health tech players like Pharmeasy and Practo are addressing access gaps in rural healthcare. But now, at the peak of this progress, a narrative is gaining steam, pushed by none other than Commerce and Industry Minister Piyush Goyal: that Indian startups are too focused on convenience and not enough on core innovation. We are stuck building food delivery apps while China races ahead in semiconductors and AI. These remarks by Commerce and Industry Minister Piyush Goyal have reignited a debate that has been brewing under the surface: Is India focusing too heavily on convenience-based startups at the cost of deep-tech innovation? Is the nation settling for comfort rather than pioneering core technologies that can drive strategic long-term growth?

Piyush Goyal’s Swipe at Indian Startups

​At the Startup Mahakumbh 2025 in New Delhi, Commerce and Industry Minister Piyush Goyal delivered a candid critique of India’s startup ecosystem. He expressed concern that Indian startups are predominantly focusing on consumer convenience sectors like food delivery and quick commerce, rather than investing in deep-tech areas such as electric vehicles, semiconductors, artificial intelligence, and robotics.​ Goyal highlighted this disparity by presenting a slide titled India vs. China: The Startup Reality Check, contrasting India’s consumer-focused startups with China’s advancements in high-end technologies. He sparked a storm with a provocative question “Should we aspire to be delivery boys and girls?” The statement, aimed at pushing India’s startup ecosystem beyond food delivery and lifestyle apps, has triggered a fierce debate between ambition and reality. He questioned whether India’s destiny is to be content with creating delivery services and luxury consumables, urging startups to aspire for more substantial technological contributions.​ He accused the ecosystem of prioritizing consumer convenience over critical technology, comparing India’s food and beauty startups with China’s breakthroughs in EVs, AI, and semiconductors. It implied that building a platform to ensure your biryani arrives hot is somehow less noble than designing a chipset. It was a rebuke masquerading as advice, and the startup community took notice.

Startup leaders were quick to respond. Zepto co-founder Aadit Palicha and Aarin Capital chairman Mohandas Pai criticized Goyal’s comments, suggesting that the government should focus on creating an environment conducive to deep-tech innovation rather than critiquing existing startup models.​ Aadit Palicha, among others, defended the economic and societal impact of these so-called convenience startups. He also highlighted the employment and tax contributions of quick commerce, calling it a miracle of Indian innovation. Mohandas Pai called out the government’s hypocrisy: How can you criticize the lack of deep tech while failing to provide the support structure such ventures need? He pointed to a massive investment gap: China invested USD 845 billion in startups from 2014–2024; India, only USD 160 billion. Ashneer Grover bluntly argued that policymakers, not founders, need a reality check.

China Comparisons: Apples and Missiles

Comparing India to China is a lazy, outdated tactic. China’s innovation is state-directed, subsidy-fueled, and often shielded from global competition. India is a democracy with a market-led startup model. And let’s not forget: many Chinese innovations are blatant copies, enabled by walled-off markets. We need to stop playing catch-up with China and instead build our trajectory. India has its innovation DNA—frugal, inclusive, and improvisational. Let’s embrace that rather than mimic a system we neither want nor can replicate. Instead of moralizing about startup priorities, the government should act. Here are a few places to start: Fund deep tech as a sovereign priority. Just as we created ISRO and BARC, create a national startup mission focused on next-gen tech. Enable public-private R&D. Offer tax breaks to companies investing in labs. Let IITs and IISc spin out commercial ventures as Stanford does. Stop punishing success. The moment a startup scales, it is burdened with compliance, tax scrutiny, and labour law headaches. Let them breathe. Create tiered startup incentives. Offer differentiated support for consumer tech vs deep tech. Both are essential. Treat them differently.

Indian Startup’s Bottleneck

Indian startups often face an uphill battle in conducting business smoothly due to a mix of structural inefficiencies, regulatory uncertainty, and a lack of enabling infrastructure. Despite the enthusiasm of a growing entrepreneurial culture and increasing digital adoption, the ease of doing business remains questionable. Regulatory processes are notoriously cumbersome—startups must navigate GST complexities, ambiguous TDS rules on foreign payments, and recurring changes in FDI norms, particularly in sensitive sectors like e-commerce and fintech. For instance, Paytm and PhonePe have both faced frequent compliance heat due to shifting policies on digital payments and data storage requirements. Moreover, capital access remains uneven; while metro-based startups attract venture capital, those in smaller cities struggle due to investor risk aversion and lack of incubators. Deep-tech or hardware startups, like those attempting to build drone tech or EV infrastructure, often can’t raise enough funds because India’s VC landscape is still heavily skewed towards fast-scaling B2C platforms. Startups also frequently report long delays in payments from both government and enterprise clients—issues that even mature firms like B2B logistics platform Delhivery and SaaS giant Zoho have publicly flagged. Adding to that are bureaucratic barriers: acquiring land, dealing with outdated labour laws, and resolving tax disputes can drag on for months. Innovation suffers as India still ranks low in enforcement of IP rights, making it risky for startups in sectors like biotech, AI, and semiconductors to commercialize proprietary tech. Despite schemes like Startup India and Atal Innovation Mission, implementation on the ground is patchy. The result is a frustrating paradox—India has one of the world’s largest startup ecosystems by count, but a far smaller number of globally competitive, enduring companies. Without targeted reforms, startups will continue to be celebrated in pitch decks but throttled in execution.

Startups Deserve More Respect

Let’s be clear: India’s convenience startups are not the problem. They are, in many ways, the solution to a range of long-ignored issues. Think of Dunzo helping people navigate lockdown logistics. Think of PharmEasy as providing doorstep access to essential medicines in Tier-2 cities. Think of Meesho enabling rural micro-entrepreneurs to sell nationwide. Are these not tech-enabled transformations? Are they not reshaping India from the ground up? In response to the backlash, Goyal clarified that his intention was not to disparage Indian startups but to encourage them to pursue more ambitious, globally impactful innovations. He emphasized the need for the startup ecosystem to evolve beyond consumer-facing applications and contribute to India’s technological leadership on the world stage.​ Convenience startups aren’t just apps. They are infrastructural revolutions disguised as B2C platforms. These companies are solving India-specific problems at scale, often in high-friction, low-margin environments. Swiggy and Zomato are not merely food apps. They are part of a logistics web that operates across thousands of Indian towns. Paytm, PhonePe, and BharatPe aren’t just payment apps—they are digital public utilities that have brought millions into the formal economy. These startups are innovative, localised and weaponised for real-world impact. India is a country where traffic, weather, electricity and even internet connectivity can be hostile to precision. Building something that works reliably in this chaos is no less than engineering wizardry.

Building for Bharat

Let’s not kid ourselves—deep tech is important, but let’s also recognize what real innovation looks like in India. Creating a mobile payment system that works on a feature phone? That’s innovation. Designing a supply chain that handles both digital payments and cash-on-delivery in rural Bihar? That’s not trivial—that’s genius. Look at Kuku FM, which is making vernacular audio content mainstream. Or DeHaat, which connects farmers with agronomists and buyers. These startups aren’t just adding convenience; they are reshaping access, education, and livelihood. You don’t need a microchip lab to be a national asset. This isn’t an argument against deep-tech. Of course, India should build chipsets, AI platforms, EVs, and quantum computing. But deep-tech takes a decade to incubate. It needs patient capital, robust IP laws, high-end labs, and strategic state involvement. That ecosystem simply doesn’t exist at scale yet. If anything, the government should be held accountable for this gap. Where are the sovereign tech funds? Where are the tax holidays for deep-tech R&D? Where is the regulatory clarity on data localization, AI ethics, or export norms? Don’t berate entrepreneurs for building what the system allows them to. They are optimizing within the constraints handed to them. If you want moonshots, build a launchpad first.

Power of the Ecosystem

India’s startup ecosystem is not a monolith. It is a living organism with interdependencies. Today’s grocery delivery founder could be tomorrow’s AI hardware entrepreneur. Just look at how Flipkart alumni have seeded dozens of ventures. Or how Byju’s scale attracted edtech capital that now fuels newer players. Building a strong base of successful, revenue-generating startups creates talent, builds investor confidence, and pays taxes that the state can then reallocate. You don’t build rocket ships without first building roads. Piyush Goyal is right about one thing: India must dream bigger. But he is wrong to look down on those already delivering impact at scale. The young founders who dared to dream of on-demand groceries, real-time payments, or hyperlocal logistics didn’t just make life easier—they made India work better. If this government wants deep-tech heroes, it should first start by being a reliable partner to its current champions. Stop the patronizing lectures and start building the bridges that take us to the next level. Convenience startups are not the enemy of innovation. They are its first wave. Ignore them at your peril. Because the future will not be won by those who sneer at success, but by those who scale it.