New Delhi: Indias startup culture which was once touted as the poster child of New India stands at a crossroads now. Once a darling globally of innovation and entrepreneurship today it finds itself trapped in a policy quicksand—swirled in confusing signals non-synchronized incentives and an unsettling outflow of talent and money. In a recent remark Commerce Minister Piyush Goyal asked if it should be a source of pride that startups are making young people delivery boys and girls. But what his rhetorical dig overlooks is that these so-called delivery startups have done more than merely deliver milk—theyve delivered employment expansion and GDP growth when others didnt. Lets dissect whats actually holding up Indias startup aspiration—and why the issue is more a case of policy paralysis rather than entrepreneurs. 1. Oversimplistic Criticism Undermined Contributions Brushing aside quick commerce or gig economy startups as glorified delivery services reflects a deep disconnect. These businesses—such as Zepto Swiggy and Blinkit—are huge economic drivers. Zepto alone has more than 100000 employees and has paid ₹1000 crore in taxes. The industry is expected to generate 2–3 million jobs by 2030. Apart from jobs these startups provide the foundation for deep tech adoption through data logistics infrastructure and capital generation. Ironically even the Wests deep tech leaders—Amazon Google Tesla—began in consumer-facing businesses before becoming AI cloud and EV pioneers. Indias startup ecosystem is not static its still evolving—and consumer tech is the scaffolding on which future tech will be constructed. 2. The Tax Trap: Innovation Meets Interrogation While Goyal urges domestic investors to step up he conveniently overlooks the tax regime that has historically punished them for doing so. The now-defunct “angel tax” haunted startups for over a decade penalizing them for raising funds above an arbitrarily defined “fair market value.” Even today the 20% capital gains tax on unlisted shares the 42.7% tax on carried interest and the double taxation of ESOPs make India one of the least founder- and investor-friendly jurisdictions globally. In contrast Singapore offers 0% capital gains tax in some cases and the U.S. offers generous safe harbor rules. India needs capital—but its tax structure screams: go elsewhere. 3. Talent on Tap But Brain on a Plane India churns out 1.5 million engineers every year but sends its best minds packing. Almost 80% of IIT students migrate—enticed not only by higher salaries but also by research environments visas and VC-plentiful markets such as the U.S. India invests only 0.7% of GDP in R&D while the U.S. invests 2.8% and China 2.4%. Startups based here apply fewer patents than the Indian-based foreign MNCs. When domestic innovation is underinvested and not appreciated brain drain is not a treason—it is a logical option. 4. Where Are Indias Googles and Teslas? Look at the Policy Playbook Goyal compares Indias startup deliveries to Chinese and American tech giants. But thats outcomes comparison without inputs comparison. The U.S. subsidizes startups with DARPA and SBIR grants; China invested $845 billion in tech through Made in China 2025. Indias Fund of Funds hardly released ₹7500 crore in eight years. Our startups arent short on ambition—theyre short on state-enabled runway. 5. The Myth of Mass Support: More Promise Than Payout The ₹945 crore outlay of Startup India Seed Fund has disbursed only ₹300 crore. The Credit Guarantee Scheme has reached a mere 1200 companies. Meanwhile total VC funding in India declined from $36 billion in 2021 to $11 billion in 2024. Requesting a ₹500 crore prize pool at Startup Mahakumbh is a nice headline—startups require stable policy not pomp and circumstance. 6. Underestimating Job Creation If the Indian dream is Viksit Bharat 2047 its people are at the center of it. However Goyals rejection of delivery work disregards the fact that consumer technology generates employment opportunities with 1.5 million direct and 5 million indirect jobs from start-ups. Deep tech as important only works currently with 150000. It can (yet) not cure Indias employment problem. In mocking the jobs available at the expense of those which do not yet scale we risk destroying the very ecosystem we want to raise up. Conclusion: A Misguided Reality Check Minister Goyals intentions can be pure—encouraging India towards international innovation—but his criticisms are missing the forest for the trees. The issue is not with the startups its with the system. A hostile tax environment an underinvested R&D ecosystem dysfunctional funding pipelines and regulatory bottlenecks are making founders go international to get validation for Indian innovation. Unless these gaps are plugged brain drain tax pain and talent strain will remain Indias startup nightmares. India does not require a reality check from its policymakers. It requires a policy reset. Appalla Saikiran Founder & CEO SCOPE