Opinion Express View: Piyush Goyal’s comments on startups are a sobering reality check

To view Union Commerce Minister Piyush Goyal’s remarks, drawing a distinction between the nature of work that startups are engaged in in India and China, as belittling the startup ecosystem in the country, is a misreading. While his comments have elicited sharp reactions from sections of the startup universe, for a sector that is prone to patting itself on the back, they serve a timely note of caution. They are a reality check for not only the private ecosystem — which encompasses sections of India Inc, universities, and private capital — but also the government which has positioned itself as a valuable stakeholder in the start-up story.

It is true that the startup ecosystem in the country has made strides, offered an array of services and provided employment opportunities. But it is telling that most of the startups that have become big companies — Flipkart and Zomato, to name two — are more geared towards domestic consumption oriented sectors. In contrast, the Chinese companies that are dominating the global headlines are involved in cutting edge high-tech research. They are competing in global markets, rivaling even US giants across a range of sectors like BYD (automobiles), TikTok (social media) and Shein (fast fashion). China’s technological prowess has been on full display with the launch of its AI model DeepSeek, developed at a fraction of the budget that many thought was needed.

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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). Equally worrying, the private sector in India contributes just 36.4 per cent of the spending on R&D, compared to 77 per cent in the case of China and 75 per cent in the US. As of 2023, China accounted for almost 70 per cent of AI patents as per the Stanford University’s AI Index Report 2025. In the same year, it installed 2,76,300 industrial robots — 7.3 times more than the US. It is not just a question of entrepreneurs. The ecosystem that drives such innovation — technical universities, a skilled labour force, industry — does not exist in India at the scale required to catapult the country into the top league. There is also the question of capital. The long development timelines in deep tech require patient capital. What needs to be done to ensure that the country has access to such capital or is the kind of money extended to startups looking for a quick exit within the low-risk high-reward matrix? Minister Goyal’s wake-up call is timely, the challenge is to ensure it’s heard on campuses, in labs, in boardrooms — both private and public.