The Wire Staff 
New Delhi: Days after Union minister Piyush Goyal asked Indian startups to shift their focus from food delivery apps, betting and fantasy sports apps to high-tech sectors like semiconductors and AI, a semiconductor startup founder has written an open letter to Goyal, criticising the government’s systemic inefficiencies hindering deep-tech innovation.
In his letter, the founder, a former Intel engineer mentioned that he has started a profitable chip design firm in 2018, serving US and EU clients, including a prominent AI pioneer. He argued that the problem lies not with startups, but with the government’s bureaucratic processes.
He also cited instances of unclear responses from the Ministry of Electronics and Information Technology (MeitY), including being asked to develop products without guaranteed purchases or market demand.
“I have attended quite a few RFQ’s by Meity. At a few sessions, I said, “We have the experience and capability to develop the chip as per your specification. We will incur a NRE cost of XX Crores. How many chips are you planning to buy?” I either got a “you build it then we will decide” or “we wont buy, you go and find whether there is a market for this”! No startup is going to burn 2 years and 10-20 crores on a product which has no buyer and no market,” he wrote.
Citing other instances, the founder said that at a defence conference he offered his company’s expertise in solving a specific technical problem, but was met with indifference. The government official dismissed the offer, claiming they could solve the issue on their own, he noted.
“From your defense genius I got a long rant on how they are not dumb, they are bright people capable of solving their problems, who have been working day and night and have not seen their families for months… They do not need help from private sector (it seems they were forced to seek help by govt hence that meeting) and will eventually solve it on their own! If your people are not open for help why waste our time holding a 2 days conference for PPP?” the startup founder mentioned in his post shared on Reddit.
He also underlined the government’s failure at providing ease of business and delaying the application process.
“My startup is eligible for certain tax breaks, your department sat on my application for over 2 years and returned it to me last week asking for “Additional documents” with a note that after submitting the documents my application will again go to the back of the queue (i.e. another 2 years)! Within a few hours of your rejection I got a call from a “facilitator” who promised me quick and guaranteed results if I use their service for “preparing my documents”!” he wrote.
He added: “Due to your tax laws, I end up paying 2X the amount (compared to my competitors outside India) for importing compute resources, EDA Licenses, equipment and raw material!”
Slamming the minister for his comments, the startup founder urged the government to focus on good governance and reduce interference, allowing entrepreneurs to build world-class products. He also drew attention towards regulatory hurdles and compliance burden. “I need to weed through a compliance calendar with over 300 items and identify compliance that are applicable to me and follow them!”
“Buddy instead of blaming others focused on your job (Good governance) and get out of our way, we entrepreneurs have the capability to build world class products,” he mentioned.
Piyush Goel: I am a semiconductor startup founder. Here is my rant in response to your rant during startup Mahakumbh!
byu/vijayvithal inStartUpIndia
While speaking at the Start-up Mahakumbh event on Thursday (April 3), Goyal criticised Indian startups by suggesting that they are focusing on food delivery apps, turning unemployed youth into cheap labour, while Chinese startups are working on electric mobility, battery technology, and building chips and AI models, commerce and industry. The minister’s comments have stirred a debate in the startup circles.