Why Ratan Tata feels Indian startups are not as disruptive as global cos

Ratan Tata, an Indian industrialist, investor, philanthropist, and former chairman of Tata Sons, has made a strong observation on the Indian startup ecosystem. He thinks that in the Indian internet ecosystem domestic startups still have some distance to cover as far as disruptive businesses go.

“I don't think we have as many really disruptive startups in India as we do overseas," said Tata, speaking at an event organised by venture capital firm IDG Ventures India.

He, however, added that the reason is not so much talent as is the lack of an encouraging ecosystem.

Tata entered as an investor in the Indian startup ecosystem in August 2014, with his first investment in an e-commerce platform Snapdeal. Since then, he has made investments in more than 40 startups, including Paytm, Zivame, Ola, Bluestone, Cardekho and others.

Last year, Ratan Tata’s private investment firm RNT Associates set up a $300-million venture capital fund in partnership with the University of California. It aimed to make investment in starups at growth stage.

Despite the fact Tata is bullish on consumer internet companies, he is also betting big on the medical research sector. “In the 10 years that we have ahead of us, we may well see diseases that were terminal being treatable instead, and much of the work will be done in India," he said.

He added that with entry costs in India being low and talent available in abundance, the country is poised to become one of the centres of biological or biosciences in the future.

In his speech, he also urged the government to play a major role in (developing India's startup ecosystem) provided they can embody the entrepreneurial spirit which would be necessary.

“We must create an environment where (an individual) can be motivated here (in India) and that requires a community of investors, capitalists who take risks... Then you'll get those (globally successful results) here too. It cannot be a typical, bankable project. It has to be risk-bearing and there will be failures. The failures themselves will be lessons leading to successes."