A sharp exchange has erupted between the Indian startup ecosystem and Commerce Minister Piyush Goyal, following his critical remarks about the sector’s focus on consumer-centric services like grocery delivery. Zepto CEO Aadit Palicha has emerged as a vocal defender of the industry, highlighting its significant contributions to job creation, foreign direct investment (FDI), and technological advancement.
Goyal’s comments, made on Thursday, urged startups to shift their attention from “delivery boys and girls” roles to high-tech sectors such as semiconductors, machine learning, robotics, and artificial intelligence, drawing a comparison with the innovation priorities of Chinese startups.
Linkedin post by Aadit Palicha
Palicha, in a strongly worded LinkedIn post, countered Goyal’s assessment, arguing that consumer internet companies are crucial drivers of technology-led innovation. He cited Zepto’s rapid growth and its impact on the Indian economy as evidence.
“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,” Palicha stated.
He further emphasised the company’s financial contributions, including “Rs 1,000 plus 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 organising India’s back-end supply chains (especially for fresh fruits and vegetables).”
Palicha argued that the foundation for advanced technological innovation is often laid by consumer internet companies. He pointed to global giants like Amazon, Google, and Alibaba, which began as consumer-focused platforms and later became leaders in cloud computing and AI.
“Most technology-led innovation over the past 2 decades has originated from consumer internet companies. Who scaled cloud computing? Amazon (originally a consumer internet company). Who are the big players in AI today? Facebook, Google, Alibaba, Tencent etc. (all started as consumer internet companies),” he explained.
Need of startup ecosystem
He stressed the need for the startup ecosystem, the government, and Indian investors to support the growth of local internet champions, rather than undermining their efforts.
“We need to build great local champions in the internet that are generating hundreds of millions of dollars in free cash flow (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,” he asserted.
Palicha concluded by reiterating Zepto’s commitment to long-term innovation and value creation in India, pledging to reinvest any generated capital into the country’s technological advancement. The debate highlights the ongoing discussion about the direction and priorities of India’s rapidly evolving startup ecosystem.
(With PTI Inputs)
