In a LinkedIn post, Aadit Palicha, Co-Founder and Chief Executive Officer of quick commerce platform Zepto, came to the defense of the Indian startup ecosystem and stated that it is simple to criticize consumer internet businesses and compare them with the technological advancements in the United States or China.

This was just a few hours after the Union Minister of Commerce and Industry, Piyush Goyal, made a dig at the Indian startup ecosystem.

Goyal, at the Startup Mahakumbh, explained that rather than any innovation in deep tech or more meaningful industries, a lot of startups tend to convert unemployed youth into cheap labor.

Palicha, in his blog, stated that there are nearly 1.5 lakh actual people earning livelihoods through Zepto today a firm that 'did not' exist three-and-a-half years ago.

More than Rs 1,000 crore of tax revenue to the government annually, more than a billion dollars of foreign direct investment infused into the nation, and hundreds of crore spent on arranging India's backend supply chains (particularly for fresh produce and vegetables). If that is not a miracle of Indian innovation, I genuinely do not know what is, he posted on the professional networking site LinkedIn.

It is simple to blame consumer internet startups in India, particularly when you compare them with the profound technical excellence that is being created in the United States or China," he said.

Palicha further explained that India presently does not have its own big foundational artificial intelligence (AI) model because the nation has yet to develop big internet companies. He gave instances of technology leaders such as Amazon, Google, and Alibaba and said that these global firms that now dominate innovation first gained success as consumer tech companies.

"Why does India lack a large-scale foundational AI model of its own? Because we still haven't created great internet companies. The majority of technology-led innovation in the last two decades has come from consumer internet companies. Who popularized cloud computing? Amazon (which was first a consumer internet company). Whose turn is it to be the big ones in AI today? Facebook, Google, Alibaba, Tencent, etc (all began as consumer internet companies)", Palicha replied.

Highlighting the requirement to support local consumer tech champions, Palicha stated that such companies fuel innovation because they possess a wealth of data, talent, and money. "The startup ecosystem, the government, and the owners of Indian capital pools need to help create these local champions rather than bring down the teams working hard to get there," he added.

Not only Palicha, but even former Infosys chief financial officer Mohandas Pai criticized Goyal for his remarks about the Indian startup culture and its comparison to other nations.

On a social media tweet on X, Pai wrote, "Minister Piyush Goyal shouldn't undermine our startups but reflect on what he has done as our Minister to enable deep-tech startups to flourish in India? It is so easy to accuse them. We have an adversary finance minister who terrorized startups on angel tax for decades, do not let endowments invest, insurance companies still do not invest whereas they do outside India".

Addressing the inaugural function of the second edition of Startup Mahakumbh on Thursday, Goyal stated that while China is investing huge money in artificial intelligence, robotics, machine learning, and next-gen factories, Indian startups are concentrating more on food delivery apps and hyperfast logistics. He stated: "Our aspirations are to compete with the best in the world". The government has been negotiating with various nations in order to establish a connection between startups, but we cannot carry grocery stores to them as our presents for startups".

Concerning the deep-tech startup ecosystem, Goyal stated that it is an alarming indicator that India has only around 1,000 startups.