India's Soft Power Rise at Rising Bharat Summit: Youth, Startup Challenges & Make in India Momentum

At the News18 Rising Bharat Summit, held at Bharat Mandapam in New Delhi on April 8-9, industry leaders Amitabh Kant, Suhel Seth, and Prasoon Joshi gathered to discuss India’s growing soft power and the critical role of its youth in driving the “Make in India” initiative.

Prime Minister Narendra Modi speaks during the inauguration ceremony of the 'Make In India' week in Mumbai, India, February 13, 2016. File Image/Reuters

Amitabh Kant, India’s G20 Sherpa and former CEO of NITI Aayog, highlighted the progress India has made, particularly in the digital payment sector, in comparison to other nations.

Kant highlighted, “Ten years ago, India was counted among the fragile five economies. Today, we’ve risen to become one of the top five. Over the past decade, we’ve made remarkable strides in infrastructure development and have driven significant innovation. India now leads the world in fast payments, accounting for 50 per cent of global transactions — while China follows with only 20 per cent."

Highlighting the distinctiveness of India’s digital payment ecosystem, Kant remarked, “We are the only country where PhonePe competes with Google Pay.”

Suhel Seth, the founder and managing partner of Counselage India, emphasized the importance of societal evolution, stating, “Every society needs to do a lot more.”

He praised India’s graceful rise on the world stage, stating that, “I think we are in the finest position of a global superpower which has behaved with dignity.” Seth’s insights highlight India’s balanced strategy of strengthening its global influence while preserving its cultural integrity.

“India is a force to reckon with," he added. Seth also highlighted the remarkable pace of innovation in Israel, noting that despite its small size—comparable to major cities in India—it has achieved significant technological progress.

Challenges Faced by Start-ups Under the “Make in India” Initiative

Launched in 2014, the "Make in India" initiative seeks to establish India as a global manufacturing powerhouse by motivating both multinational and domestic companies to manufacture their products locally.

This initiative has greatly enhanced Foreign Direct Investment (FDI) inflows, thanks to the streamlining of FDI regulations and improvements in the business environment. As a result, India has risen to the top 100 countries in the Ease of Doing Business index.

“A few years ago, there were only 156 start-ups in India, today we have 1,61,000 start-ups and more than 100 unicorns," Kant added.

The initiative has significantly contributed to employment generation, with around 8 lakh individuals securing jobs, representing a major step towards fulfilling the goals of the Production Linked Incentive (PLI) Scheme.

However, India's startup ecosystem continues to face challenges, particularly in terms of regulatory frameworks. Critics contend that, despite government initiatives like "Startup India" aimed at fostering entrepreneurship, there are gaps in policy execution and support structures.

Challenges such as complex compliance processes and insufficient infrastructure have been identified as obstacles to the growth of startups.

While India's startup landscape is dynamic and growing rapidly, several critical issues remain that impede its long-term growth.

Kant commented on the inherent challenges within the startup ecosystem, stating, “Startups have to fail. Startups are about failure, but one success will be worth all these failures.” His statement highlights the high-risk, high-reward nature of entrepreneurship and underscores the vital role of resilience in the journey of young entrepreneurs.

Kant hailed the contributions of Indian startups in the fields of Artificial Intelligence and health as "path-breaking."

Navigating India's intricate regulatory landscape remains a daunting challenge for startups. The vast array of compliance requirements, spanning labour laws, tax regulations, and industry-specific guidelines, can be overwhelming, particularly for early-stage ventures with limited resources.

Despite government initiatives to simplify procedures, many startups continue to struggle with bureaucratic hurdles and unpredictable regulatory shifts. For example, the Reserve Bank of India's unexpected restrictions on Paytm Payments Bank due to compliance issues resulted in a sharp decline in its parent company’s stock price.

Recent controversies have drawn attention to governance shortcomings within the startup ecosystem. High-profile cases, such as Byju’s financial mismanagement, which once held a $22 billion valuation, have raised concerns among investors and stakeholders.

The company’s entanglement in legal disputes over significant loans and unaccounted funds has underscored the urgent need for stronger governance frameworks. As a result, venture capitalists are placing greater emphasis on governance practices before committing funds, leading to more rigorous due diligence processes.

The global economic slowdown and rising interest rates have dampened venture capital investments in Indian startups. This funding crunch has forced many startups to implement layoffs, cut operational costs, and, in some cases, shut down entirely.

Early-stage startups, in particular, face difficulty securing the capital needed to scale their operations, stifling their growth potential.

The Indian government has voiced concerns about the nature of innovations emerging from the startup sector. Commerce Minister Piyush Goyal recently criticised startups for focusing on services like rapid delivery, which primarily serve affluent consumers, and called on entrepreneurs to follow China’s lead in advancing high-end technologies such as electric mobility and robotics.

This critique has sparked a debate about the direction of innovation, with some founders arguing that the ecosystem lacks sufficient support for deep-tech ventures.

In addition to regulatory and financial challenges, startups also struggle with infrastructural gaps and a shortage of skilled talent. The concentration of startup hubs in metropolitan cities leaves tier-2 and tier-3 cities underserved in terms of infrastructure, mentorship, and networking opportunities.

Furthermore, there is a noticeable skill gap, especially in emerging technologies, which limits startups' ability to innovate and compete on a global scale.

India's Rise as a Global Soft Power

India's rich cultural heritage, democratic ideals, and diplomatic initiatives have played a pivotal role in strengthening its soft power. The Indian Council for Cultural Relations (ICCR), founded in 1950, has been crucial in advancing cultural diplomacy.

Moreover, India’s focus on peaceful progress and its amicable policies towards neighboring nations have reinforced its legitimacy in South Asia.

Prasoon Joshi, CEO of McCann Worldgroup India and a panel member, emphasized the importance of India’s cultural exports as powerful tools of soft power. He also reflected on Indian civilization, describing it as "rooted in a larger truth."

He quoted lyrics from "Roobaroo" from the film Rang De Basanti, symbolizing the awakening and potential of India’s youth in shaping the nation's global identity.

The worldwide appeal of Indian cultural exports, including yoga, Ayurveda, and Bollywood, further highlights the country’s soft power. These cultural contributions have not only improved India’s global standing but also promoted international cooperation and mutual understanding.

(This Article was originally published by First Post)