In a rare moment of candid introspection, Commerce Minister Piyush Goyal sparked a much-needed debate on the true direction of India’s booming start-up ecosystem. The Minister’s comments should be seen as a call to action — not condemnation

It’s not very often that an important Union Minister makes a statement of honest introspection as Commerce Minister Piyush Goyal did recently at the conclave of the start-ups. Unfortunately, given the nature of social media debates, a serious economic issue has come to be embroiled in fisticuffs between pro-government and anti-government troll creatures.

First, it’s important to know what the Minister said in his very candid interaction with the business community. Goyal showed a slide comparing start-ups in India and China, and said that Indian start-ups are busy making food delivery apps, fancy ice cream and cookies, instant grocery delivery, betting and fantasy sports apps and reels and influencer economy, whereas businesses in China are working on “EV and battery tech, semiconductors and AI, robotics and automation, global logistics & trade and deep tech & infrastructure.”

Those who thought that the Minister was deriding his own government’s policy should not be under any illusion that Piyush Goyal would have spoken these words without the approval of his boss.

He set aside the talking points given by the Ministry and brought out his text, probably with the approval of the Prime Minister’s Office. Goyal must have been chosen for the task because he belongs to the business community and his chartered accountancy firm audits accounts of some of the biggest business houses. Through his message, he delivered the Prime Minister’s angst at India’s business not meeting the government’s expectations.

He was ruthless in saying, “What are India’s start-ups of today? We are focused on food delivery apps, turning unemployed youths into cheap labour so the rich can get their meals without moving out of their house.” After Goyal’s address, the industry has been rallying to assure the government. Instead of drowning it in the cacophony caused by social media, it’s important to understand what the Minister said.

India’s start-up ecosystem is the third largest in the world after the United States and China — however, the first two, to use words from the Minister’s lexicon, are not in the business of creating mere ‘dukandaars’ (shopkeepers).

After all, the success stories of Indian start-ups like Flipkart, Zomato, Swiggy, Myntra, Blinkit and Zepto are all in end shops — ‘dukes’ with a delivery army largely of men and a few women.

It’s important to understand what the expected contributions from start-ups is. While there could be a long list, there are a few points to focus on. First and foremost, job creation — provide employment opportunities, especially for skilled youth. Contribute to reducing unemployment rates.

Next is innovation and R&D — drive research, innovation, and technological advancement. Influence larger industries to innovate. Third, boost to entrepreneurship, inspire entrepreneurial culture and spirit, encourage risk-taking and creativity.

And of course, GDP growth — that is, contribute to national income through new business activities and help boost exports and attract foreign investment. The Minister’s angst is that our start-up ecosystem may not have contributed on any of the four counts despite its founders making it big. The Minister’s jibe of ‘dukans’ could also be understood from the fact that the Indian start-ups which have made it big are more geared towards domestic ingestion-focused segments. On the other hand, the Chinese are competing in the global market.

The technological competence of the Chinese companies has been displayed best in the launch of DeepSeek, its AI model created at a fraction of the budget estimated worldwide.The malaise lies in the lack of investment in research and development (R&D). While India compares unfavourably with the other economic powers it wants to compete with, the malady is deeper.

The private sector here has left the responsibility of research to the government.India spends just 0.64 per cent of GDP on research and development, considerably lower than that spent by China (2.41 per cent) and the US (3.47 per cent). Worse is the fact that the private sector in India contributes just 36.4 per cent of the spending on R&D.

On the other hand, in China 77 per cent of the total R&D expenses comes from the private sector; the US is just a notch below with 75 per cent.

At whose door do we blame? Shaadi.com founder Anupam Mittal said, “From AI & space tech to material science, Indian entrepreneurs are ready to take on the world. But capital & the eco-system for growth & commercialisation are severely lacking. Founders can do most things but not everything.”

This brings focus to the established corporations and how much has been spent on the R&D.Each of the answers would come with a question, but the fact is, as Goyal has said, our start-up ecosystem, despite a fancy name and garb in nature, has remained a traditional ‘dukan’ — a trading shop.

The Minister has started a debate; let’s see what conclusion it brings. Commerce Minister Piyush Goyal’s blunt critique of India’s start-up ecosystem sparked necessary introspection. His comparison with China highlighted a stark contrast: while Indian start-ups thrive on convenience-based models, Chinese firms push deep-tech frontiers. Goyal’s remarks reflect broader concerns about the lack of innovation, limited R&D investment, and insufficient private sector contribution.

Though India boasts the world’s third-largest start-up ecosystem, its impact on job creation, technological advancement, and global competitiveness remains questionable. The Minister’s comments should be seen as a call to action — not condemnation. The debate he triggered must now lead to meaningful policy shifts and corporate accountability in innovation.

(The author is President of, the Centre for Reforms, Development and Justice. Views are personal)