There’s been a lot of noise recently about the Indian startup ecosystem, sparked by a remark from our Industry Minister. He pointed out that Indian startups lean too much on consumer sales and e-commerce, with not enough focus on deep tech or innovation—unlike China, he said. The response was swift and sharp.
Many founders and veterans in the ecosystem trolled the comment, bringing up India’s low ease of doing business, the return of tax scrutiny, bureaucratic red tape, and how government capital support doesn’t come close to what China offers.
Now, as someone who has been in the trenches for nearly three decades, I can say this:
Both sides are right.
Yes, we lack patient capital and bold long-term bets.
And yes, navigating the regulatory maze in India often feels like running a marathon in quicksand.
But we also need to admit—many of us founders have been risk-averse. We look for quicker returns, shorter cycles, and hesitate to invest in moonshots unless someone else proves it first.
Let me give you a story from my own life.
I started my software products and services company in 1997, primarily serving clients in the West. It was a good time—post-1991 liberalisation, and then came the 1997 dream budget by Sri P. Chidambaram.
Things looked up. By 2004, riding on the ‘India Shining’ sentiment, I decided to double down on the domestic market. I took the profits from my export business and reinvested into India, hoping to tap into what felt like a rising tide.
But here’s the twist—while India did grow, it didn’t exactly boom at the pace I had bet on. Meanwhile, Indian IT services to global clients skyrocketed. Between 2005 and 2015, the sector had one of its best runs ever. And I, with my focus on local sales, missed much of that wave. The 2008 global recession made things worse. My business was saddled with debt, and ironically, it was only by returning to U.S. clients that I could stay afloat.
So what’s the lesson?
India in 2025 is not the India of 2005.The local software market is vibrant now, thanks to the SaaS boom and digital transformation across sectors. But that doesn’t mean global markets can be ignored.
Export dollars still pay the bills.
Founders, if you’re building now, balance your bets. Keep one foot rooted in homegrown innovation—vernacular AI, deep tech, climate tech, whatever gives you joy—and the other firmly in the global arena.
Hedge against policy zigzags with strong compliance and a buffer for surprises. Don’t over-index on hype, and don’t retreat when the economy stumbles. Rebalance, realign, rebuild.