Piyush Goyal Critiques Indian Startups: Are We Just Creating Delivery Jobs? Zepto CEO Responds
The Startup Mahakumbh, held from April 3-5, 2025, at Bharat Mandapam, is an initiative by the Indian government under the theme “Startup India @ 2047: Unfolding The Bharat Story.” Designed to shape the future of India’s startup ecosystem, it focuses on fostering innovation and self-reliance by 2047. During the inaugural ceremony, Union Minister Piyush Goyal set the stage for discussions about the ecosystem’s trajectory over the next two decades.
Detailed Comments by Piyush Goyal
In his address, Goyal presented a slide comparing Indian and Chinese startups—a comparison he found deeply disturbing. He criticized the heavy focus of Indian startups on convenience-driven businesses, such as food delivery, e-commerce, betting, and fantasy sports apps, contrasting them with Chinese startups making notable progress in deep-tech sectors like electric vehicles (EVs), battery technology, semiconductors, and artificial intelligence (AI).
Key Remarks by Goyal:
- Do we have to make ice cream or chips? Dukaandari hi karna hai (Do we just want to do shopkeeping)?
This rhetorical question underlined his concern about the lack of ambition within India’s startup ecosystem. - Low-Paying Gig Jobs:
He challenged whether India is content with creating low-paying gig jobs, such as those for delivery personnel, instead of aiming for significant technological advancements and innovations. - Questioning Business Ambition:
Goyal noted examples like billionaire children running successful ice cream or cookie brands, asking if such ventures truly represent India’s destiny.
He emphasized the need for more deep-tech startups, noting that only about 1,000 of India’s nearly 20,000 startups are in this space—a situation he described as “disturbing.” He urged the ecosystem to pivot toward high-impact sectors like robotics, machine learning, and semiconductors to establish India as a global innovation hub.
Response from Zepto’s CEO, Aadit Palicha
In response, Aadit Palicha, the CEO of Zepto, took to X (formerly Twitter) to defend the impact of consumer internet startups. His key points included:
- Job Creation:
Zepto has created 150,000 livelihoods in just 3.5 years, highlighting the real impact of his company on people’s lives. - Economic Contributions:
The company contributes over ₹1,000 crore in taxes annually and has attracted more than $1 billion in foreign direct investment (FDI). - Supply Chain Innovation:
Palicha argued that consumer internet startups play a crucial role in organizing India’s backend supply chains, particularly for fresh produce, and drive broader technological innovation. He cited global giants like Amazon, Facebook, Google, and Alibaba as examples of consumer companies that paved the way for other technological advancements.
Addressing the broader question of why India does not yet have its own large-scale foundational AI model, Palicha stated,
“Why doesn’t India have its own large-scale foundational AI model? It’s because we still haven’t built great internet companies.”
He pointed out that global tech leaders started as consumer-facing platforms before evolving into advanced technology companies.
Reactions and Aftermath
Goyal’s remarks sparked polarized reactions. Former Infosys CFO Mohandas Pai criticized him for making an unfair comparison with China and argued that government policies like the Angel tax are hindering deep-tech growth.
Similarly, Ashneer Grover, ex-MD of BharatPe, suggested that politicians need a reality check, comparing India’s startup evolution to China’s journey.
Anupam Mittal also noted the lack of capital and ecosystem support for deep-tech, calling for more backing from both the government and investors.
Following the backlash, Goyal announced a helpline for startups on April 6, 2025, inviting them to register complaints or provide feedback—an apparent response to the criticism.
Join our Lets code Community to transform your tech journey!
user
Contributing Writer