11 April 2025 : Indian Express Editorial Analysis
1. Startups need an enabling climate
(Source – Indian Express, Section – The Ideas Page – Page No. – 09)
| Context |
| On April 3, Commerce Minister Piyush Goyal criticized Indian startups for focusing on consumer-centric ventures over deep-tech innovation, sparking a national debate on the direction of India’s innovation ecosystem. |
A Provocative Wake-Up Call for Indian Startups
- On April 3, Commerce and Industry Minister Piyush Goyal stirred controversy with his candid remarks at the Startup Mahakumbh, criticizing the Indian startup ecosystem for focusing on consumer-driven ventures.
- By singling out food delivery apps, quick commerce platforms, and boutique brands like fancy ice creams, Goyal highlighted what he perceives as a misplaced priority in the startup space.
- Contrasting this with China’s emphasis on electric vehicles, semiconductors, and AI, he urged a deeper reflection on India’s innovation trajectory.
The Innovation Deficit: A Growing Concern
- Goyal’s comments underscore a crucial concern — India’s inability to produce pathbreaking innovation despite being rich in tech talent.
- While Indian-origin professionals are pioneering global breakthroughs in companies like Google, Microsoft, and Tesla, the domestic ecosystem remains fixated on low-risk, high-return models.
- As India eyes Viksit Bharat 2047, innovation must be the engine of transformation. Prime Minister Modi’s repeated emphasis on innovation aligns with this vision, but systemic gaps remain unaddressed.
Global Comparison: Where India Stands
- The 2024 Global Innovation Index paints a telling picture: India is ranked 39th while China holds the 11th spot.
- This disparity highlights how India’s startup boom, despite birthing over 100 unicorns, has largely revolved around consumer-facing applications.
- Goyal’s juxtaposition with China may seem simplistic, but it underscores India’s lag in deep-tech sectors that define the future — such as AI, quantum computing, and advanced robotics.
Structural Barriers to Innovation
- A key reason for India’s innovation shortfall lies in systemic deficiencies. Unlike China’s “Made in China 2025” initiative, which channeled billions into strategic sectors with incentives and tax breaks, India’s support remains modest.
- The IndiaAI Mission and Fund of Funds initiatives are promising, but insufficient. From 2014 to 2024, India invested $160 billion in tech, a fraction of China’s $845 billion, leading to an unequal playing field.
Education and Research: The Weak Link
- India’s educational institutions produce a large number of engineering graduates annually, yet few contribute to groundbreaking research.
- A lack of world-class research facilities and emphasis on rote learning stifles innovation.
- This skills mismatch leads many talented Indians to seek opportunities abroad, where they excel.
- India has the minds, but not yet the mechanisms to retain and harness them effectively.
Venture Capital and Risk Appetite
- India’s venture capital ecosystem also contributes to the problem. Investors often prioritize short-term gains over long-term, deep-tech investments.
- Unlike in the U.S., where VCs back ambitious ventures like SpaceX, Indian investors tend to fund safer, consumer-oriented startups.
- The regulatory environment, exemplified by the now-defunct angel tax, has further discouraged bold investments.
Success Stories Amidst the Gaps
- Despite the challenges, India has witnessed some deep-tech successes.
- Startups like Digantara, Skyroot Aerospace, and Agnikul Cosmos have made notable strides in the space sector.
- Fintech players like Paytm and PhonePe revolutionized digital payments, and cybersecurity startups have shown promise.
- However, many promising ventures are acquired prematurely, preventing the growth of iconic, globally competitive companies.
The Way Forward
- The 78% rise in funding for deep-tech startups in 2024, as reported by Nasscom, is a hopeful sign.
- However, to truly shift gears, India needs to prioritize sectors like AI, med-tech, smart manufacturing, defense tech, and climate innovation.
- This requires dismantling bureaucratic barriers, increasing R&D investments, and reforming education to foster critical thinking and experimentation.
A National Innovation Culture is the Need of the Hour
- India’s ascent in the IT services sector decades ago was commendable, but today’s innovation landscape demands a more ambitious leap.
- The country must file more patents, encourage tinkering, and build a culture that celebrates long-term risk-taking. Goyal’s critique, while blunt, is a necessary provocation.
- It calls for a unified effort from the government, industry, academia, and the VC community to shift from incremental innovation to foundational change.
Conclusion
- Minister Goyal’s warning should not be dismissed as mere rhetoric.
- It’s a clarion call for India to evolve from a “shopkeeping” mindset to a nation that builds world-changing technologies.
- Achieving this demands an ecosystem that supports experimentation, rewards boldness, and nurtures ideas from the lab to the market.
- If India wants to lead in the tech-driven global order of tomorrow, the time to act is now.
| Practice Question: India’s startup ecosystem has achieved scale but lacks depth in transformative innovation.” In the light of recent remarks by the Commerce Minister, critically examine the structural and policy challenges hindering deep-tech innovation in India. Suggest measures to build a robust, innovation-driven economy. (250 Words /15 marks) |
Read more – 10 April 2025 : Indian Express Editorial Analysis
