Should the Indian government protect Indian startups?

A Question from an online forum: Do you think the Indian government, like China, should protect Indian startups, like helping the e-commerce industry?

Response by our editor, Mohan follows

The question is too broad and open-ended, so let us examine what Government and government bodies are already doing to help startups.Nascent, bootstrapped startups may have to be nurtured. What are Government and other incubators in India doing?

  • Central Government: The 10,000 Startup program ( “From seed capital to growth capital, the 10,000 Start-ups programs helps the startups shortlisted in its program to raise money from a wide range of investors- angels, micro VCs, VCs, and Government funds.”
  • State governments are also pitching in.For Example Karnataka Governments startup cell promotes startups “EVERY WINNING IDEA IN PHASE l… Receives INR 10 lakhs grant to prototype and demonstrate solution in 6 months. Gets access to mentors, resources and network. Is eligible to compete for Phase II piloting grant of INR 50 lakhs”

Keep in mind, a few kinds of ‘startups’ may need some nurturing (I am not using the term “protect”). And some government bodies are stepping in to nurture/incubate them.

You may also be taking a broader view, referring to “The founders of Indian unicorns Ola and Flipkart have been at the center of considerable controversy recently for comments made over how local companies should receive protection from the government.”Forbes

One school of thought says that startups need to grow up and act as a business. Refer to the blog “When do you stop calling yourself a startup ?” Business, even venture funded businesses take risks, and when they “grow up” they don’t need to be protected.

Of course, this is countered by the other view that sees Western leaders like Donald Trump trying to “protect” American businesses. If Trump can protect American businesses, shouldn’t Indian government be protecting and helping businesses like eCommerce?

Bottomline: the response to protectionism would be “it depends.

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