From Ice Cream to Innovation: Are Indian Start-Ups Ready for the Deep-Tech Challenge?

Pivotal comments by India’s Commerce Minister Piyush Goyal during the Startup Mahakumbh have ignited a fervent debate over the direction of Indian start-ups. Goyal criticized the current trend of start-ups focusing on consumer products – like gluten-free ice creams and delivery apps – while urging them to pivot towards advanced technologies such as artificial intelligence, robotics, and semiconductors. He emphasized the necessity for Indian innovators to aim for ambitious projects if India is to progress competitively on the global stage, explicitly questioning, “Do we want to make ice creams or [semiconductor] chips?”

The remarks sparked a mixed response among entrepreneurs; some viewed it as an inspiring call to action while others deemed it an unfair critique of the thriving start-up landscape, which is hailed as the third-largest in the world. Goyal did acknowledge the burgeoning start-up scene but pressed for accelerated evolution and innovation.

Aadit Palicha, co-founder of Zepto, championed the role of consumer internet companies as critical innovating forces, highlighting their contributions to broader tech advancements. Investor Mohandas Pai echoed concerns regarding the lack of funding for deep-tech ventures, suggesting that investors prefer the quicker returns of lifestyle-focused start-ups over the long-term commitments required for deep-tech development.

Amidst the criticism and calls for increased ambition in tech creation, various entrepreneurs shared their own struggles, including access to funding, high import taxes, and bureaucratic hurdles. Some, however, supported Goyal’s perspective, arguing for a greater focus on deeper innovation and less on consumption-driven models. Journalist Abhijeet Kumar noted that only 5% of Indian start-up funding was directed towards deep-tech, starkly contrasting with 35% in China, highlighting a potential gap in India’s innovation strategy.

While the Nasscom report indicated promising growth in India’s deep-tech sector, projecting an increase from 4,000 to 10,000 deep-tech start-ups by 2030, there remains a significant challenge ahead. Goyal’s statements have served as a provocative call to action for start-ups, investors, and government alike, advocating for initiatives to spur innovation in hardware, biotech, AI, and clean energy, as India seeks to catch up with global competitors.