Burning Foreign Capital to Dismantle Local Stores, Not Innovation: BJP MP to Zepto’s Aadit
The ongoing debate on the role of foreign capital in India’s start-up ecosystem has taken a new turn with a BJP MP, Praveen Khandelwal, lashing out at Zepto’s CEO, Aadit Palicha, for his company’s claims of creating jobs and paying taxes. Khandelwal, who is also the Secretary-General of the Confederation of All India Traders (CAIT), has accused Zepto of “burning foreign capital to dismantle India’s small neighborhood kirana stores” and not making any meaningful contribution to innovation.
The controversy began when Union Minister Piyush Goyal criticized Indian start-ups, saying that they were “dependent on foreign capital” and not contributing to the country’s growth. Zepto’s CEO, Aadit Palicha, responded to the criticism, saying that his company had created jobs and paid a whopping ₹1,000 crore in taxes. However, Khandelwal has taken a strong objection to Zepto’s claims, saying that the company’s actions are not aligned with the principles of innovation.
“Claiming to create jobs and pay taxes while burning foreign capital to dismantle India’s small neighborhood kirana stores is not innovation,” Khandelwal said. He added that Zepto’s business model is based on “importing foreign capital to dismantle the local retail ecosystem” and not on any innovative technology or product.
Khandelwal’s criticism is not without merit. Zepto’s business model is based on delivering grocery items and other essentials to customers’ doorsteps through a network of local stores. While this may seem convenient and innovative, it has also led to the closure of many small neighborhood kirana stores, which are an integral part of India’s retail ecosystem. These small stores provide employment opportunities to thousands of people and are a vital part of the country’s economic fabric.
Moreover, Zepto’s reliance on foreign capital has raised questions about the sustainability of its business model. The company has received significant funding from foreign investors, which has allowed it to scale its operations rapidly. However, this has also led to concerns about the company’s ability to operate sustainably in the long term, without the support of foreign capital.
Zepto’s critics argue that the company’s business model is not only unsustainable, but also detrimental to India’s retail ecosystem. By importing foreign capital and using it to dismantle local stores, Zepto is essentially destroying the very fabric of India’s retail industry. This is not innovation, but rather a short-sighted attempt to make a quick buck.
Khandelwal’s criticism of Zepto is part of a larger debate on the role of foreign capital in India’s start-up ecosystem. While foreign capital can be a valuable source of funding for start-ups, it can also lead to the destruction of India’s local businesses and industries. The government and regulatory bodies need to take a closer look at the impact of foreign capital on India’s start-up ecosystem and ensure that it is used in a way that benefits the country and its people.
In conclusion, Zepto’s CEO, Aadit Palicha, may have responded to Union Minister Piyush Goyal’s criticism, but his claims of creating jobs and paying taxes are not enough to justify the company’s actions. The company’s reliance on foreign capital to dismantle local stores is not innovation, but rather a shortcut to quick profits. The government and regulatory bodies need to take a closer look at the impact of foreign capital on India’s start-up ecosystem and ensure that it is used in a way that benefits the country and its people.
