At the grandly titled Start-up Mahakumbh last week, Union minister for commerce and industry Piyush Goyal delivered yet another controversial speech—one that swiftly turned into a lightning rod for criticism. This was not his first public takedown of Indian business or entrepreneurship; but the backlash this time was particularly swift, sharp and widespread. His comments on Indian start-ups being overly focused on food delivery, e-commerce, and even ‘vegan’ ventures rather than advanced technology like semiconductors and artificial intelligence (AI) raised eyebrows and hackles in equal measure—especially when juxtaposed with the harsh realities entrepreneurs face while navigating India’s policy and regulatory landscape.
The minister’s controversial remarks remind us of his August 2021 broadside, when he accused Indian corporate giants, including the Tata group, of putting profits above national interest and attempting to bypass local laws. That speech triggered such a backlash that the Confederation of Indian Industry (CII) pulled down video links of the event shared with journalists. This time, too, the fallout was significant.
On 4th April, the minister shared a slide titled “
India vs China”, forwarded to him by someone, comparing the focus of start-ups in both countries. It was enough for him to launch into a tirade against Indian start-ups for allegedly prioritising food delivery and e-commerce over more ‘serious’ technological pursuits like semiconductors and AI. “What should India do? Make ice cream or semiconductor chips?” he asked. Interestingly, this controversial line is missing from
the PIB release of his speech.
The minister’s attack was perhaps the best thing to have happened for start-ups. It evoked a sharp reaction with the strongest pushback coming from within the larger pro-BJP ecosystem. TV Mohandas Pai, former chief finance officer (CFO) of Infosys and a vocal supporter of the government, called out the unfair criticism. Others pointed to the persistent structural hurdles that the start-up ecosystem faces—ranging from red tape and corruption to harassment from tax authorities and regulatory opacity.
At a time when the world is bracing itself for the long-term impact of the trade wars unleashed by president Donald Trump and heads of forward-thinking nations like Singapore are addressing citizens to prepare them for tough times, hopefully, India will respond to the avalanche of criticism from genuine entrepreneurs.
So let’s start by examining the possible inspiration behind Mr Goyal’s speech. Here is a post of Satyamurthy Nageswaran (
https://x.com/satya_murthy) of 31st March with an image that has the exact elements and title referred to by the minister which framed the comparison as a
“Startup Reality Check”—it was not a takedown.
Mr Satyamurthy noted that India lags China by a decade in terms of economic development and innovation infrastructure. He rightly argued that India must first address foundational issues—capital access, talent development and ecosystem support—before chasing deep-tech dreams.
“India is 10 years behind China in terms of economic development and entrepreneurship. We need to solve ecosystem problems first before we leap towards futuristic technologies,” he wrote. This is largely due to a decade-long gap in economic development and a weaker foundation for innovation. Also, China has leveraged merit-based systems, substantial capital and layered growth—starting with hardware and scaling to deep tech, while India struggles with limited local funding. “China made merit-based appointments, India hires policymakers on the basis of ‘nepotistic policies,” he wrote; also, while “India’s potential is undeniable,” it must prioritise fixing structural issues before chasing the cutting edge. In effect, the buck stopped with the government. Meanwhile the start-up eco-system has managed to do what the government could not – provide jobs to millions of unemployed youth.
Another
X post on 31st March by @sachinsharmage compared India and China. It highlighted China’s systemic advantages: a more established eco-system, government-backed domestic venture capital providing greater stability, a deeper domestic footprint and layered support for innovation and larger global footprint.
In contrast, India’s start-up energy flows largely from private capital, often international. While India enjoys a more open regulatory environment and platforms like ‘Startup India’ and ‘Digital India’ have helped, China’s more closed approach often doubles up as a protective shield for domestic players. Consequently, India’s top sector in the start-up world was e-commerce, while it was AI for China.
Were these thoughtful comparisons meant as a wake-up call to the government before the Mahakumbh to create the right eco-system with genuine ease of doing business and predictable policies so that start-ups could focus on deep technological innovation? If so, Mr Goyal missed the message entirely. Instead, his speech exposed a deep disconnect between government’s flimsy understanding, its adversarial attitude and the actual lived experiences of India’s entrepreneurs.
Thanks to social media, the reactions were fast, furious and eye-opening.
AaditPalicha, CEO of Zepto, was quick to point out that consumer start-ups like his had created 150,000 jobs, paid over Rs1,000 crore in taxes and attracted over US$1bn (billion) in foreign direct investment (FDI)—without the benefit of the kind of deep-tech ecosystem China enjoys. While these may not be cutting-edge tech jobs, they provide steady incomes and uplift family economies—it is no small feat in a country grappling with unemployment. Others chimed in to describe the hostile environment in which they operate. Chartered accountant Nikhil Vadia noted that approvals still require ‘red tape and bribes’. Mohandas Pai was even
more direct, asking what Mr Goyal himself had done to support deep-tech innovation. He listed structural challenges: the ‘Angel Tax’, restrictions on institutional investments, Reserve Bank of India’s (RBI’s) harsh treatment of foreign investors and alternative investment funds (AIFs) and the unfriendly stance of the finance ministry towards start-ups.
Perhaps the most compelling rebuttal came from Murtaza Amin, a semiconductor start-up founder in Burhanpur (Madhya Pradesh). In an open letter posted on Reddit, he said, "Piyush, I heard that you ranted that no one is doing semiconductors. Well I am, now you hear my rant!”He revealed how his application had languished with Mr Goyal’s ministry for two years before being returned with a note asking for ‘additional documents’. Within hours of the rejection, a ‘facilitator’ offered ‘guaranteed results’ if he used their service to prepare documents. Thanks to Indian tax laws, he pays “2X the amount (compared to my competitors outside India) for importing computer resources” in addition to corruption, frequent power cuts, harassment by officials and the constant threat of potential harassment for speaking up.
This is not an isolated story. Corruption and harassment by government agencies is among the biggest problems faced by Indian entrepreneurs and this has only increased. For all the talk of a ‘start-up ecosystem’, entrepreneurs say they survive despite the government—not because of it. The India Business Corruption Survey 2024 found that 66% of businesses admitted to paying bribes and 54% reported coercion for approvals and licences. This is in addition to endless harassment over and ever-changing compliances imposed by a multitude of regulatory agencies.
Government Response
Faced with this deluge of criticism, Mr Goyal announced a nationwide helpline for start-ups to report red tape, pitch policy tweaks and raise concerns about regulatory blind spots. While welcome in theory, the promise needs to be tested. India's experience with feedback and pitching concerns, even through formal, apolitical, not-for-profit bodies—has been disheartening. Government departments and regulators simply ignore such communications. One needs to file a Right to Information (RTI) application to track action, if any. This, too, is losing its impact since the RTI Act has been systematically weakened.
If Mr Goyal's intent was to spark introspection, perhaps it worked—but not in the way he planned. His remarks have reignited an important debate about what truly ails India’s start-up ecosystem or Indian enterprise system. And the answer, clearly, lies not in the ambitions of young entrepreneurs but in the apathy, inefficiency and often hostility of those in power.
This was founded in Bangalore in 2008, 17 years ago, by Janaagraha Centre for Citizenship and Democracy. If you look at the website you will find many well documented stories.
We need a similar website in every small and large city if we are serious about tackling this scourge.
The educated middle class needs to tackle this rather than expect the government to do this.
Will they?
Actually this trend is prevalent in many areas. In Pharma , for example we focus on manufacturing Vaccine or the Generic medicine but donot go in for higher end of developing by research new products
Even on the IT , we make software ( again lower end ) and leave the hardware aside . We body shop our engineers rather than go for the real
Time we take such ideas seriously and make planned changes to make us big
Goyal has to look within why India is not growing in the direction it shd rather than blasting businessmen,
All that he has to do is blame it all on the Muslims and he will be lauded by the BJP base.
Deflecting blame for everything on the hated minority is the answer to all problems in India according to the current govt.
This keeps their voter base happy, so the govt need not do anything else like actually solving problems like huge unemployment, drop in purchasing power of the average Indian, or helping the poor access their bank a/c which are frozen because of problems with linking them to Aadhar.
Today I heard from a friend that when a nurse was hired in a govt run taluka level medical facility, she was told that she would have to pay the doctor and the other nurses, and if she did not then she would be marked for harassment and demotion.