India’s startup ecosystem has undeniably achieved significant milestones. In 2025, startups raised $2.5 billion in Q1 alone, marking an 8.7% increase from the previous year. The country ranks third globally in terms of startup funding, trailing only behind the US and the UK. Additionally, initial public offering (IPO) activity has surged, with 23 startups preparing for public listings this year, demonstrating investor confidence in Indian innovation.

Moreover, Tier 2 and Tier 3 cities are emerging as hubs of entrepreneurial activity, addressing local challenges in agriculture, health care, and education. This decentralisation is a promising trend that underscores the inclusivity and potential of the ecosystem.

Despite these achievements, the minister’s critique points to critical gaps that need addressing. Many startups focus on replicating existing business models rather than innovating in transformative sectors like deep-tech. For instance, while Chinese startups lead globally in semiconductors and EV technologies, Indian startups often prioritise instant grocery delivery or niche consumer products. This approach risks creating businesses with limited long-term economic value.

Then, as the minister pointed out, there are the concerns about brain drain, where innovative ideas are sold to foreign companies at undervalued prices. Without robust support for homegrown innovation, India risks losing its intellectual capital to global competitors.

Such critique is vital for fostering a culture of introspection and accountability within the startup ecosystem. While it is easy to bask in the glory of unicorn valuations and funding milestones, true progress lies in addressing systemic gaps and building businesses that create long-term economic value. Goyal’s remarks serve as a wake-up call for founders and investors to rethink their priorities and align their efforts with national goals.

India’s startup community must be unafraid to challenge the status quo and push for meaningful innovation. By embracing this vision, Indian entrepreneurs can rise to the occasion, leveraging their talent.

Deep-tech industries such as Artificial Intelligence (AI), robotics, and semiconductors are pivotal for driving economic growth and technological leadership. Globally, these sectors are shaping the future of industries ranging from health care to manufacturing. Yet, India has only about 1,000 startups in deep-tech.

Investing in deep-tech, of course, offers multiple benefits. One, high-tech industries generate higher revenue per employee compared to low-skill sectors. Two, innovation in AI and robotics positions India as a leader in cutting-edge technologies. Three, in terms of sustainability, unlike short-term ventures, deep-tech solutions address systemic challenges and create lasting impact.

To foster a more impactful startup ecosystem, several steps need to be taken. First, deep-tech funding must be encouraged. While late-stage funding dominates ($1.8 billion in Q1 FY25), early-stage investments in deep-tech must be prioritised. Second, there has to be the right policy support. Recent reforms like abolishing the angel tax have boosted investor confidence. Further incentives for R&D in high-tech sectors can accelerate growth. Third, intellectual property promotion and protection will be key. Startups should focus on building IP-driven solutions rather than adapting global models. This shift will ensure that Indian innovations remain competitive globally. Fourth, startups can leverage tier-2 and tier-3 cities to address localised challenges through deep-tech solutions. Fifth, they will need to collaborate with academia. Universities can serve as incubators for deep-tech innovation by fostering research partnerships with startups.

India’s startup ecosystem is at a crossroads. While it continues to attract record-breaking investments and global attention, its long-term success depends on aligning entrepreneurial efforts with national priorities. The path forward lies not in abandoning consumer-focused ventures but in diversifying into sectors that drive meaningful change. By doing so, Indian startups will not only capture global markets but also contribute significantly to domestic economic growth.

In conclusion, such critique is not an indictment but an invitation — an invitation to evolve beyond short-term gains toward creating an ecosystem that truly adds value to the nation’s economy and society. Indeed, this introspection could be the catalyst for the next wave of innovation-driven growth of the country.

Rohit Kumar Singh is member, National Consumer Disputes Redressal Commission, and former secretary, Government of India. The views expressed are personal