“Why doesn’t India have its own large-scale foundational AI model? It’s because we still haven’t built great internet companies. Consumer internet companies drive this innovation because they have the best data, talent, and capital to put behind it,” said Palicha in a post on X.
Union commerce minister Piyush Goyal gave a reality check to India’s startup ecosystem at the Startup Maha Kumbh on Thursday, comparing them with Chinese counterparts. “We are making food/hyper delivery apps, creating cheap labour so the rich can eat without stepping out, while the Chinese work on EVs, AI, and semiconductors,” he said.
Showing a comparison slide, Goyal noted Indian startups focus on food delivery, instant groceries, fantasy sports, and influencer-driven apps. Meanwhile, Chinese startups develop EVs, battery tech, semiconductors, AI, robotics, and deep tech. He urged Indian startups to retain ownership, criticizing the sale of promising ideas to foreign firms. “India produces the most STEM graduates, yet we create delivery jobs. We must focus on research and future technologies,” he said, slamming betting apps while praising China’s dominance in global supply chains like Shein, DJI, and Alibaba.
What did Zepto CEO say?
Further reacting to the controversy, he said “We need to build great local champions in internet that are generating hundreds of millions of dollars in FCF first if we ever want to get a piece of great technology revolutions. The startup ecosystem, the government, and the owners of large pools of Indian capital need to actively support the creation of these local champions, not pull down the teams that are trying hard to get there.”
“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. Using our example, the reality is this: there are almost 1.5 Lakh real people who are earning livelihoods on Zepto today – a company that did not exist 3.5 years ago. ₹1,000+ Crores of tax contribution to the government per year, over a billion dollars of FDI brought into the country and hundreds of crores invested in organizing India’s backend supply chains (especially for fresh fruits and vegetables). If that isn’t a miracle in Indian innovation, I honestly don’t know what is,” added the CEO.
“I can promise that any capital we generate from this business (and it honestly looks like we will) will be invested towards long-term innovation and value creation in India. That is essentially what I am dedicating the next few decades of my life to try to do: create dynamism in the Indian economy and our capital markets, in the same way the Americans have for decades. We have the talent and capital; we just need the execution,” added Palicha.
