India’s vibrant startup ecosystem erupted in debate this week after Commerce and Industry Minister Piyush Goyal urged founders to move beyond food delivery apps and focus on cutting-edge sectors like semiconductors and artificial intelligence. While the minister intended to promote innovation in emerging technologies, his comments sparked a backlash from entrepreneurs who felt that he dismissed the value and impact of consumer-focused platforms.
The startup community, particularly those involved in quick-commerce, delivery, and consumer services, pushed back with strong responses. Prominent voices such as Zepto co-founder Aadit Palicha and investor Mohandas Pai defended the sector’s contribution to employment, efficiency, and consumer convenience. They emphasized that building a successful startup—especially in the competitive consumer service space—requires innovation, agility, and massive execution.
This controversy has reignited the broader conversation about the role of consumer tech in India’s startup landscape and whether the government truly understands the operational and technological challenges entrepreneurs face.
Goyal’s Statement Sparks Outrage
At a startup-related event this week, Piyush Goyal stated that India must stop building more grocery and food delivery apps and instead redirect energy toward more “serious” pursuits like AI, deep tech, and semiconductor development. He argued that India cannot afford to waste its top engineering talent on developing apps that deliver food or groceries in under 10 minutes.
The minister praised the potential of Indian engineers and asked them to solve “big problems” rather than build “yet another food app.” While he acknowledged the success of some delivery startups, he urged the ecosystem to focus on more ambitious technology goals that could compete on the global stage.
Quick Rebuttal From Startup Leaders
His remarks didn’t sit well with startup founders. Zepto co-founder Aadit Palicha, whose 10-minute grocery delivery platform recently became a unicorn, responded swiftly. He emphasized the technological complexity and operational precision required to run a hyperlocal delivery business.
“Building a company like Zepto isn’t just about pushing groceries through an app,” Palicha said. “It’s a real-time logistics challenge, backed by data science, route optimization, demand forecasting, and last-mile delivery innovation.”
He pointed out that startups like Zepto generate thousands of jobs, optimize urban supply chains, and contribute to GDP growth. Palicha added that delivery startups rely on AI, real-time analytics, and supply chain tech—fields that the minister himself promoted.
Veteran investor Mohandas Pai also weighed in. He defended the freedom of entrepreneurs to choose their areas of innovation. “You cannot dictate which sector an entrepreneur should work in,” Pai stated. “Solving last-mile delivery and building efficient consumer networks also requires deep tech and strategic thinking.”
Broader Startup Ecosystem Joins the Debate
Several other founders and investors joined the debate on social media and industry forums. Many argued that India’s success in digital payments, ecommerce, and food delivery shows the country’s capacity to lead in consumer-facing innovation.
Entrepreneurs like Deepinder Goyal (Zomato) and Albinder Dhindsa (Blinkit) have transformed how Indians shop, eat, and live. These businesses combine advanced data infrastructure, user-centric design, and scalable operations. Critics of Goyal’s remarks questioned why these achievements received so little recognition.
Others pointed to the sheer difficulty of building trust in a cost-sensitive market like India. Delivery startups operate on razor-thin margins, and they must balance logistics, supply chains, customer satisfaction, and hyperlocal nuances. This complexity demands creativity and execution—traits that form the foundation of any innovative enterprise.
The Government’s Perspective
Supporters of Goyal’s comments clarified that the minister did not intend to demean any specific sector. Instead, they claimed that he aimed to inspire startups to aim higher and tackle more foundational challenges in science and technology.
Government officials emphasized that India needs homegrown champions in fields like AI, robotics, and semiconductor manufacturing if it hopes to compete with China and the West. They pointed to global tech trends and the increasing need for digital sovereignty and technological self-reliance.
Still, many observers believe the minister should have framed his message more constructively. Criticizing sectors that have flourished in India can discourage risk-taking and undermine the confidence of founders already navigating tough business environments.
Impact on Startup Morale
Goyal’s comments may not impact venture funding or startup valuations directly, but they affect the morale of founders and teams working hard to build customer-centric platforms. Many founders expressed disappointment that their efforts and contributions to job creation, infrastructure improvement, and urban efficiency went underappreciated.
Some startup employees also voiced concern over the government’s messaging. “If the government doesn’t value our innovation because we’re delivering groceries, what motivation do we have to stay in India?” one employee at a leading q-commerce startup asked.
For many, the real question is not whether food delivery or AI is more valuable. The issue lies in building a diverse ecosystem where both types of innovation can thrive. Startups should not feel like they must choose between impact and recognition.
The Larger Innovation Picture
India has witnessed massive growth in sectors like fintech, mobility, ecommerce, and q-commerce over the last decade. These platforms serve millions of customers, especially in Tier 2 and Tier 3 cities, and build digital infrastructure where none existed.
Startups like Swiggy, Zomato, Zepto, Dunzo, and Blinkit have introduced millions of people to the convenience of digital services. In doing so, they have also created data flows, mapped urban logistics, and helped other services scale in parallel—like UPI payments and online customer service.
Meanwhile, several of these startups already invest in AI and automation to enhance operations. Delivery route planning, demand prediction, personalized customer engagement, and warehouse optimization depend on advanced tech. Critics argue that labeling such startups as “low-tech” oversimplifies their actual work.
Moving Forward: A Need for Nuanced Dialogue
The episode has highlighted a gap between policy vision and ground realities. Government officials want to see more deep-tech innovation, but they must also recognize that consumer-facing startups play a vital role in creating the ecosystem that makes those innovations possible.
India must celebrate all types of startups—whether they build chipsets, AI systems, or grocery delivery networks. The economy benefits when entrepreneurs solve real-world problems, regardless of the sector. Rather than pushing a specific vision, policymakers should support flexibility and offer incentives for innovation across domains.
Entrepreneurs must remain free to experiment, fail, iterate, and eventually succeed—without the fear of ridicule or marginalization from the very institutions that should support them.
Conclusion
Minister Piyush Goyal’s comments may have stemmed from a genuine desire to see India shine in deep-tech sectors. However, his criticism of food and grocery delivery apps missed the mark for many entrepreneurs. Startups like Zepto, Swiggy, and Blinkit have transformed India’s consumer landscape, built technology-driven operations, and generated thousands of jobs.
By questioning their value, the government risks alienating the very innovators driving India’s digital revolution. If India truly wants to lead in global innovation, it must embrace a broader definition of technology and recognize the hard-earned achievements of all sectors—whether they deliver code or curry.