Piyush Goyal Gives Startup Reality Check at Startup Mahakumbh, Compares with China

In a powerful and thought-provoking address at the second edition of Startup Mahakumbh, Union Commerce Minister Piyush Goyal threw down the gauntlet to India’s startup ecosystem, urging entrepreneurs to rethink their priorities and step up their game. Drawing a stark comparison between Indian and Chinese startups, Goyal’s words acted as both a reality check and a wake-up call for innovators and investors alike.

The minister didn’t mince words as he highlighted a fundamental difference in the direction of startup development in both nations.

“We are making food/hyper delivery apps, creating cheap labor so that the rich can have a meal without stepping out, while the Chinese are working on EVs, AI, and semiconductors,” he remarked. 

His statement instantly sparked a wave of discussions, with many agreeing that India’s innovation landscape needs a stronger focus on deep-tech, manufacturing, and cutting-edge advancements.

Indian Startups vs. Chinese Startups: A Staggering Gap

During his speech, Goyal presented a slide comparing the areas of focus for startups in both countries. According to his assessment, Indian startups are primarily engaged in food delivery apps, influencer-driven content, betting and fantasy sports, and instant grocery services. While these businesses have undeniably flourished and attracted significant investment, Goyal pointed out that their long-term value in shaping India's technological and industrial future remains debatable.

On the other hand, he noted that Chinese startups are prioritizing industries that have far-reaching impacts on global economic structures.

“Chinese companies are working on EV and battery tech, semiconductors and AI, robotics and automation, global logistics and trade, and deep tech and infrastructure,” he highlighted.

By focusing on core technology and industrial advancements, China is positioning itself as a leader in high-value sectors that drive the world economy.

This comparison, Goyal insisted, is not meant to dishearten but to inspire.

“I am proud of what India has done. This comparison is not to discourage but to encourage,” he said, making it clear that he sees immense potential in Indian entrepreneurs. The key, he argued, is to pivot toward industries that can place India on the global innovation map in a more meaningful way.

The Need for Domestic Capital and Ownership

Beyond the nature of startups being built, Goyal also raised concerns about the ownership of Indian innovation. He expressed his disappointment at the trend of promising Indian startups being acquired by foreign entities at an early stage.

“Grow and maintain your ownership. I feel sad when I come to know that for Rs 25 lakh or Rs 50 lakh, a bright idea of a young startup got sold to a foreign company,” he lamented.

He emphasized the urgent need for more domestic capital to support Indian startups, calling upon unicorns and industry leaders to contribute to a funding pool.

“Let’s try and get some more domestic capital coming into this ecosystem,” he urged.

This would ensure that groundbreaking Indian ideas remain within the country and contribute to India’s long-term economic growth, rather than benefiting foreign investors.

Are We Just a ‘Food Delivery Nation’?

Goyal’s remarks also challenged the very definition of entrepreneurship in India.

“Dukandari hi karni hai, ya international standards business khade karne hai?” he asked, questioning whether Indian entrepreneurs want to limit themselves to quick-profit ventures or aim to build businesses that can compete on a global stage.

Bringing attention to Prime Minister Narendra Modi’s emphasis on research and development, Goyal reminded the audience of the addition of ‘Jai Anusandhaan’ (research) to the slogan of ‘Jai Jawan, Jai Kisan, Jai Vigyan.’ He urged startups to embrace innovation that goes beyond consumer convenience and taps into core technological advancements.

“India doesn’t want to be an ice cream nation, but a chip manufacturing nation,” he declared, reiterating the need for a shift toward high-impact industries.

A Call for Higher Standards in India’s Startup Ecosystem

Interestingly, Goyal even called out Aman Gupta, co-founder of boAt and a judge on Shark Tank India, suggesting that the popular startup reality show should encourage higher standards. His remark implied that while Indian startups are gaining visibility, they must strive for innovation that aligns with the country’s long-term economic and technological aspirations.

Furthermore, he criticized the growing trend of betting and fantasy sports apps, arguing that they foster gambling and addiction rather than contributing to real economic productivity.

“The Chinese are building supply chain giants like Shein, DJI & Alibaba that dictate global commerce,” he pointed out, implying that India must strive for a similar impact rather than creating platforms that offer only entertainment and convenience.

A Reality Check or an Opportunity?

While Goyal’s words may have been sharp, they also served as an invitation—an invitation for India’s startup ecosystem to evolve and embrace a more ambitious vision. His call for higher standards, domestic funding, and a shift toward deep-tech sectors could be the catalyst needed for the next phase of India’s startup revolution.

The question now is—will Indian entrepreneurs take up the challenge?

With a pool of the world’s largest STEM graduates and a rapidly growing digital economy, India undoubtedly has the potential to lead in areas like artificial intelligence, clean energy, and semiconductors. However, unlocking this potential requires a conscious effort from investors, policymakers, and entrepreneurs to prioritize long-term value creation over short-term gains.

As the dust settles on Goyal’s bold statements, one thing is clear—India’s startup ecosystem stands at a crossroads. It can either continue on its current trajectory or take a decisive leap toward becoming a global powerhouse in innovation. The choice, as Goyal said, is ours to make.