While appreciating growth of consumer-driven ventures (e.g. Food-delivery and Q-commerce apps) in India, minister highlighted lack of innovation in deep-tech startups.
- Deep-tech startups are high-risk, long-gestation ventures that leverage advanced technologies like AI/ML, block chain etc. to create novel solutions for complex problems. E.g. Skyroot Aerospace, Sarvam AI.
Issues with the Startup ecosystem in India
- Funding: Low government and private capital investment and a risk-averse investment culture stifle startups aiming to tackle complex problems.
- The total tech investment in India during 2014-2024 is estimated at $160 billion, against China’s $845 billion.
- India’s venture capital (VC) landscape prioritizes quick returns over patient capital.
- Education and research infrastructure: Lag in ecosystem development due to subpar quality, lack of industry-academia linkages, lack of skilled workforce, brain drain etc.
- Governance: Policy uncertainty and regulatory hurdles hinder ease of doing business.
- E.g. Access to credit, taxation and import barriers on raw materials, red tape and corruption in getting approvals etc.
Way Forward
- Policy reforms: Provide grants/access to regulatory sandboxes to test prototypes, logistical support for commercialization, deep-tech focused skill development programs.
- Investment promotion: Setting up deep-tech innovation funds; establish co-investment programs with VCs.
- Education reform: Promoting quality research by building strong academia-start-up bridges.
