Much of it is due to a report by Confederation of Indian Industry, titled Unicorn 2.0: Adding the next trillion, released on March 14, which forecasts that the startup and venture economy could likely contribute US$ 1 trillion to the Indian economy and also add over 50 million jobs by FY 2030.

While there can be no question about the game-changing potential of the startup arena, there are some vital aspects that should not be overlooked amidst all the celebrations of startup prowess, and the excitement surrounding India potentially emerging as the “startup capital” of the world.

First, why is it that the world’s most populous nation, which has been one of the strongest ambassadors of clean energy and is also an ardent champion of environment-friendly lifestyles to counter the adverse effects of climate change, has not seen large successful startups in the clean technology and climate technology segments so far?

Secondly, why is there a seeming reluctance on the part of the influential voices in the Indian startup ecosystem to talk further on the reasons behind clean-tech and climate-tech startups that are not securing the kind of funding received by other domains within the local startup space?

The leading startup sectors in India that have bagged funding include fintech, edtech, e-commerce, D2C brands, SaaS (software as a service), food tech, etc. According to data by Invest India, a national investment promotion and facilitation agency, the fintech, edtech, and e-commerce segments accounted for 19.7 per cent, 9.4 per cent, and 6.2 per cent respectively of the total funding that has been received. 

Globally, the climate-tech startup space has seen a lot of funding, the most in the United States. In October 2021, a CNBC report cited Blackrock CEO Larry Fink saying at a programme that there is a possibility of the climate-tech startup space spawning a thousand unicorns. 

The questions surrounding the lack of big, well-funded climate-tech and clean-tech startups in India assume further significance in light of the fact that such startups can play a pivotal role in addressing the huge challenges posed to lives and livelihoods by extreme weather events caused by climate change. 

These startups can also aid in finding a remedy for the perennial air pollution problem. Moreover, such startups can lessen India’s dependence on developed nations for these critical technologies.

Having an increasing number of successful clean-tech and climate-tech startups can also add vibrancy to the Indian startup arena and raise the bar on innovations. Besides, these entities can assist in the quicker realisation of many of the targets associated with the Sustainable Development Goals (SDGs), especially goals 3 (Good Health and Well-being), 7 (Affordable and Clean Energy), 11 (Sustainable Cities and Communities), and 13 (Climate Action).

The World Bank estimates that more than 80 per cent of India’s people live in districts that are at risk of climate-induced disasters. Additionally,  Bretton Woods Institution pointed out, in the context of India, that “rising temperatures, changing rainfall patterns, declining groundwater levels, retreating glaciers, intense cyclones and sea-level rise can precipitate major crises for livelihoods, food security and the economy.” 

Incidentally, the transfer of climate technologies is a perennial demand made by developing countries, including India, at the COP summits. But these pleas have largely failed to elicit the desired outcome so far. As per the 2023 IQAir World Air Quality Report, India is the world’s 3rd most polluted country and also home to the four most polluted cities in the world.

“Startups focusing more on the clean-tech and climate-tech segments is the need of the hour for a large, diverse country like India as these businesses can prove invaluable in addressing some of the biggest national problems,” said former Nasscom president Kiran Karnik, when asked about his views on the startup arena. 

Karnik further explained that if Venture Capitalists (VC) funds, Private Equity (PE) firms, angel investors, etc., do not show a sufficient appetite for investing in clean-tech and climate-tech startups, the government should evolve a mechanism through which such startups could obtain funding.

Karnik’s perspective was echoed in the industry as well. “Sure, building these businesses is more difficult than some others, but the clean-tech and climate-tech arenas are definitely ones with a lot of potential and need to be supported,”  said Atul Kunwar, an investor himself and former Tech Mahindra president. Karnik and Kunwar’s views deserve careful consideration.

In the long run, it would matter much less for India—as it aims to leverage the breakthrough innovations of startups to solve some of its biggest problems—the number of startups it has, compared to the size and scale of the impact that these businesses are making in their capacity as problem-solvers. 

The country needs its startup ecosystem to push the envelope as startups playing safe and sticking to familiar areas of business may not do much to make a tangible difference in the quality of life of over 1.4 billion people in India beyond a certain point.

Only time can tell whether VCs, PE firms, etc., would shed their reluctance when it comes to backing clean-tech and climate-tech startups or whether the Central and/ or state governments will come forward to lend a helping hand to such entities. 

However, it may be good to keep Mahatma Gandhi’s words in mind while deliberating in this context. Gandhi said, “You may never know what results come of your actions, but if you do nothing, there will be no results.”

(The author is a current affairs commentator. Views expressed are personal)