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According to recent headlines, the government’s initiatives have increased the visibility of technology-driven businesses in the nation—as a stand-in for innovation. Last September, a union minister noted that between 2015 and 2022, India’s position on the World Intellectual Property Organization’s (WIPO) annual index of global innovation had increased by 41 places, from 81 to 40.
The most recent budget plans made by Finance Minister Nirmala Sitharaman were viewed as a guarantee that the nation would continue to foster innovation. Her most recent suggestions include creating three centers of excellence for AI, 100 labs in engineering colleges around the nation to work on 5G wireless, and an accelerator fund specifically designed to aid aggrotech startups in rural India.
Anjali Bansal, a seasoned venture capital (VC) investor, responded, “Easy of doing business,” when recently asked to name one item she would change to enhance the Indian startup ecosystem. One of those driving the Indian VC ecosystem’s investments into climate tech is Bansal, a founding partner at Avaana Capital.
Bansal has built and oversaw the Indian operations of multinational corporations in the past, and he currently serves on a committee overseeing the implementation of ONDC, or the open network for digital commerce, which many believe will transform the country’s e-commerce in the same way that UPI transformed payments.
More bluntly stated is Suresh Sambandam, founder and CEO of Kissflow, a company that offers cloud-based software for workflow management and no-code business applications: “In India, the government is the largest obstacle.”
He claims that the government isn’t doing enough to reduce the burdensome paperwork that businesses must submit. Compliance is “a tremendous disaster,” according to him, due to restrictions governing intellectual property, employee stock options or restricted stock units, and numerous taxes.
He claims that a similar conundrum also affects the Indian biotechnology industry. In the budget for the previous year, a sizeable portion of the funding allotted to the Department of Biotechnology was allocated to independent organizations and research institutes that specialize in biotechnology. He claims that there is still little commercialization support available for businesses and startups.
Bagaria hoped that the most recent budget will include scale-up funding as well, “regardless of whether or not any startup had previously taken use of a smaller award.”
While talking to one of the leading business magazines he added, if the startup is prepared, he believes, they should be given financial support to expand. If any such provisions were made in the most recent Budget, it is still unclear. Moreover, Sitharaman did not immediately state how much or from whence the money for the acceleration fund, for instance, would come.
The process of turning scientific discoveries into profitable ventures that can address significant national concerns is another one where change is still in its infancy.
According to Vivek Mishra, co-founder and CEO of Fibroheal, a Bengaluru-based company that is creating wound-care products based on silk proteins, “there is a lot of good scientific research that isn’t being converted into businesses because a lot of collaborations between academia and industry happen only on paper.”
In addition, he adds, “many times, products are designed without taking into account market needs. According to him, academic scholars are still hesitant to publish papers, expand their research, and engage in other activities outside of it in India, unlike in Silicon Valley (and Stanford), for instance.
Only a small number of scholars have ventured into creating firms based on their scientific expertise, he notes, even in circumstances where a researcher holds patents for anything novel.