Union Minister Piyush Goyal’s recent remarks questioning the direction of India’s startup ecosystem have sparked a wave of reactions from prominent startup leaders and tech entrepreneurs. While addressing an audience, Goyal questioned whether Indian startups are merely focused on "dukaandari"—running shops—by prioritizing delivery services, fantasy sports, and betting platforms, as opposed to Chinese startups that are innovating in areas like electric vehicles, semiconductors, and artificial intelligence. Goyal’s statement—"Do we have to make ice cream or chips? Dukaandari hi karna hai?"—triggered a broader debate on the evolving role and contribution of consumer-facing startups in India’s growing digital economy. India currently boasts the third-largest startup ecosystem in the world, behind only the United States and China. However, the Minister’s comments suggested dissatisfaction with the nature of innovation emerging from the Indian ecosystem, especially when compared to deeper technology sectors being developed in China.
 

The response from the startup community was swift and direct.

Mohandas Pai, former CFO of Infosys and an active startup investor, was among the first to challenge Goyal’s view. He called the comparison with China “bad” and “unfair” and pointed to government policy failures as a key reason deep-tech ventures in India are struggling. On social media platform X, Pai wrote, “Minister @PiyushGoyal should not belittle our startups but ask himself what has he done as our Minister to help deep tech startups grow in India?” Pai also criticized India’s financial ecosystem for creating barriers to funding and growth. He highlighted the role of the Finance Ministry and Reserve Bank of India (RBI) in stifling innovation through regulatory red tape, citing years of delay due to angel tax issues and limitations on investments by endowments and insurance companies. According to him, while China invested $845 billion into startups over the past decade, India managed only $160 billion.
 

Ashneer Grover, former co-founder of BharatPe, also responded strongly. “The only people in India who need a reality check are its politicians,” Grover said. He defended the evolution of India’s startup ecosystem, stating that China too began with food delivery before venturing into deep-tech innovation. “Maybe time to change ‘public discourse’ from history to science!” he added. Zepto co-founder Aadit Palicha, whose company has become a standout player in India’s fast-growing quick-commerce segment, emphasized the economic value created by consumer internet companies. He revealed that over 1.5 lakh people earn their livelihood through Zepto and the company pays ₹1,000 crore in taxes annually while attracting over $1 billion in FDI. “It is easy to criticise consumer internet startups in India, especially when you compare them to the deep technical excellence being built in US/China,” said Palicha. “But the reality is that we’re creating real jobs, revenue, investment, and infrastructure development.”
 

Palicha added that Zepto has helped transform the supply chain sector in India, especially in fresh produce. He argued that large-scale consumer internet companies are necessary stepping stones toward deeper tech innovation. “Most technology-led innovation over the past two decades has originated from consumer internet companies,” he said, citing Amazon, Google, Facebook, Alibaba, and Tencent as global examples. He also highlighted why India still lacks large foundational AI models—stating it’s because the country hasn’t yet built dominant internet platforms. “The best data, talent, and capital are concentrated in these consumer platforms, and they become the breeding grounds for deeper tech breakthroughs,” Palicha noted. He acknowledged that Zepto still has a long way to go in becoming a world-class tech company but reiterated his team’s commitment to long-term innovation and value creation.
 

According to Startup India, India is currently home to nearly 20,000 registered startups, of which around 4,750 are technology-led. However, only five startups reached unicorn status in 2024, indicating a slowdown in new unicorn creation compared to previous years. The most recent unicorn was MoneyView, which achieved the milestone in September 2024. While Goyal’s comments have triggered sharp debate, some founders appreciated the opportunity for dialogue. “Thanks Minister sir for starting this healthy debate,” Ashneer Grover noted.
 

The debate now highlights a deeper issue—India’s startup ecosystem is diverse and still developing. It includes both consumer-oriented platforms that address immediate urban needs and emerging tech ventures trying to solve long-term problems. Critics argue that rather than divide the ecosystem by sector, the focus should be on supporting innovation across all levels, removing regulatory bottlenecks, and building an environment conducive to both scale and deep R&D. With India’s goal of becoming a $5 trillion economy, the role of startups—be it in quick commerce or quantum computing—will be critical. The discussion around their direction should aim to strengthen the ecosystem, not divide it.