India's G20 presidency is a ray of hope for entrepreneurs worldwide: OYO founder Ritesh Agarwal

ONCE ON THE PERIPHERY of India’s growth story and limited to a handful of industries, our start-ups have come a long way. The entrepreneurial spark among Indian youngsters has meant that new-age companies are now more mainstream than ever. The past decade has democratised entrepreneurship, especially in smaller towns and cities, which once seemed impossible to achieve. From e-commerce to agritech, modern Indian start-ups have emerged as trailblazers, pioneering innovation and problem-solving on a large scale. Never has this shift been more palpable than in the run-up to the G20 Summit in September.

India’s G20 presidency promises to be a major turning point for the country to firmly establish itself on the global stage, but for an entrepreneur, this is a watershed moment for a different reason: the focus on start-ups.

The Startup20 engagement group is the first such initiative that has been established under India’s presidency. It signals the arrival of start-ups as mainstays of the economy, bringing them a seat at the high table that was once fully occupied by large, legacy enterprises. A dedicated forum for discussions on start-ups—it was earlier the domain of the Business20 engagement group—could go a long way in tackling the unique challenges faced by the industry.

The progress made by the group has been stellar. With no common definition for start-ups across the G20 member states, the push for a comprehensive framework was much needed, given the need for streamlining regulatory procedures, while the proposed networked institution across countries augurs well for budding entrepreneurs seeking guidance and mentorship and cross-border collaboration as a whole. Going forward, Startup20 can act as a catalyst to strengthen knowledge sharing between governments and successful start-ups.

It also promises to put sustainability into focus, with investors being encouraged to get involved in green start-ups to mitigate the disastrous effects of climate change.

However, the G20 Summit offers a huge opportunity to showcase the might of the Indian start-up ecosystem to the world. For long, we have bemoaned the failure of Indian companies to make a mark on the global stage, but new-age domestic start-ups have shown that it is indeed possible to build sustainable businesses overseas—a stage like G20 could accelerate that progress.

Our technology prowess has long proven a boon for the world and the G20 platform offers a chance to maximise that advantage. India’s software exports hit a record high of $320 billion in FY23, increasing its share in global computer services exports to around 11 per cent. Now, home-grown platforms like the Unified Payments Interface (UPI), which have proven to be scaleable and offer cutting-edge precision, could be the next export frontier for India.

At the same time, it is perhaps time to look beyond just services like IT. India’s robust digital infrastructure can aid in exporting more services such as education and healthcare. With the advent of generative artificial intelligence (AI), an emerging economy like India has a huge opportunity to build a strong AI ecosystem to gain a competitive advantage and add great value to the global economy.

India’s start-up numbers are impressive: over 99,000 recognised start-ups and more than 100 unicorns have made it the third-largest start-up ecosystem in the world. But it is worth noting that there are reportedly over

850,000 start-ups across G20 countries, including around 1,600 unicorns. India’s vast talent pool and largely young population means that it has the potential to grab an even bigger slice of the pie. The size of the Indian market, after all, has enough room for more start-ups to gain a foothold in the industry.

But it would not all be plain sailing. For one, funding remains an issue for several early-stage start-ups, especially in the aftermath of the Covid-19 pandemic. According to a recent report by GlobalData, venture capital funding was down nearly 75 per cent in the first five months of the year compared to 2022. The Startup20 engagement group’s call for G20 members to invest $1 trillion in start-up ecosystems by 2030 is a step in the right direction but a stronger presence of more global venture capital and private equity funds in India would not hurt at all.

Supporting the growth of global start-ups should be coupled with a focus on easing cross-border trade reforms. This would allow G20 countries to reap the benefits of cross-border trade while overcoming bureaucratic hurdles. Additionally, there remains a need to simplify the regulatory procedures for new businesses, which would enable them to easily comply with laws across geographies.

Despite the challenges, there is little doubt that start-ups are poised to power the next wave of economic growth, and the G20 presidency presents us with an unprecedented opportunity to fast-track that objective. India’s digital capabilities combined with our workforce’s varied technical skills puts the country in a position to emerge as a global start-up hub. It is up to us to make this moment count.

The author is Ritesh Agarwal, Founder and Group CEO of OYO (Views are personal)