Indian Prime Minister Narendra Modi recently called on Indian startups and entrepreneurs. The PM wants Indian tech companies to lead the innovation required to solve the world's most pressing problems. But what can be achieved? And what have Indian entrepreneurs done to date?
January 16th has been announced as Indian National Startup Day. It will become one of the pillars of the PM's vision of building a young, modern, progressive India.
Indian entrepreneurs and startups have had a significant impact worldwide. They are running some of the world's biggest companies, like Microsoft, Adobe, Mastercard and Oxford Business School. But in light of Modi's call for more solutions, what does the future hold?
New Generation
There is a new generation of Indian entrepreneurs. Many of them are women. However, if the country is going to succeed, it needs to overcome the biases that several women face in the business world. Ragini Das began leap.com, a women-focused professional network. They've secured around $1m in funding, but they've had a challenging time with some investors.
There is no excuse for this kind of thinking. India has produced several excellent women entrepreneurs, like Falguni Nayar and Leena Nair. If the country is to achieve the PMs aims, it will need to draw on contributions from all 1.3bn of its citizens and not just men.
Red Tape
Another area that stifles innovation is government red tape. When famed entrepreneur Elon Musk tweeted recently about bureaucratic challenges in entering the Indian market, several ministers promised him the red carpet treatment.
However, Indian startups are also affected by red tape, taxation, land acquisition laws, and state labour laws. Reform, infrastructure, and more affordable finance are required for Indian companies to excel.
In fact, some commenters feel that easing regulations is not enough. India has had excellent tech startup success. Many feel that other sectors can learn a lot from the tech culture, which could lead to a breaking of the regulator shackles.
The PM's comments about tech should help. The government has committed to reducing red tape by easing the registration and taxation process.
India has the 3rd largest startup ecosystem globally, behind India and China. In 2021, the company produced 46 unicorns (startups worth over $1bn). The Indian Commerce Minister, Piyush Goyal, hopes that number will increase to 75 in 2022.
For India to succeed, it will need to draw from a vast, increasingly educated population. Citizens have plenty of young self-made founder CEOs to draw inspiration from. Ritesh Agarwal at OYO Rooms, Advait Thakur at Apex, and Suhas Gopinath of Globals Inc. all come to mind.
Emerging Sectors
There are several emerging industries that Indian startups could lead. One growth area is the cultivated meat sector. The "smart proteins" and plant-based meats have a considerable potential market. But to gain further success, they need more access to funding and world-class scientists. Which is something that India is not short on.
Another promising sector is Pharmaceuticals. India has a solid pharmaceutical history. The country exported $24bn in products last year and expects R&D to increase in the country in the future. With lots of experience and expertise, India is becoming a major hub of vaccine innovation.
While COVID-19 was devastating for the local population, it has brought opportunities for some companies. Over 60% of entrepreneurs have reported positive effects of COVID on their business.
The pandemic saw rapid digitisation and tech adoption across the country. This growth has been matched by foreign and domestic investment. Fintech is a huge growth area. It attracted more than $8bn in funding in 2021, up from $2bn the year previous.
Foreign investment has grown sharply over the last few years. India offers an excellent opportunity for investors because of its huge talent pool and robust IP protection. Upcoming regulatory reform will make India even more attractive to foreign inflows of capital.
Global reliance on China is reducing. The Chinese government's tech crackdown presents an opportunity. The bar to Chinese investment has become high, which means India could benefit. For many, this is India's moment.
One big part of ensuring future prosperity is good foreign trade deals. Much publicised discussions with the United Kingdom are going well. Additionally, close ties are being forged with the United States. The countries will collaborate on a range of issues, like the environment, security, and technology.
Summary
PM Modi wants Indian entrepreneurs to drive the country into a new era. With more than 90 unicorns currently operating, the talent is clearly there. However, red tape and regulation present barriers that need to be removed so that the population of 1.3bn people can reach their potential.
