Addressing The Challenge of Heavy Industry Startups in India
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Capital investments required for the manufacturing sector are huge. So people generally have the notion of shying away from them. Even most VCs aren't passionate about improving Indian manufacturing startups as they see returns in the sector being slow. Due to requirement of high intensive studies, the sector is dreaded for a reason and so people tend to give up after a while.
Going Against the Tide
But that seems to be changing as the Karnataka government has taken the first hand initiative of promoting such startups that belong to these sectors. Through his pet project Elevate 100, Karnataka IT and BT minister Priyank Kharge has encouraged startups from all speheres, including the heavy intensive ones.
“Of the 61 companies we funded in the last 6 months, even before the elevate 100 prgramme, 28 of them are biotech companies which have a long gestation period. We envisage to groom close to 6000 product based startups. Thinking that governments do not support hardware and capital intensive startups is a myth. I cannot say about other states but we in Karnataka have as much focus on manufacturing startups as software-based ones. For us the product and innovation is key,” said Karnataka IT and BT Minister Priyank Kharge in an exclusive chat to Entrepreneur India.
Taking on Need-Based Demands
But investment is the biggest factor that is tough to come by in the sector. Kharge believes the product needs to be innovative and need based at the same time for him to convince investors to get on board. He gives the example of the aerospace sector, where his governemnt has set up the first incubation centre of its kind in the country.
"If there are requirements that capital intensive sectors like Aerospace require, whether its in relation to land or testing fields, we are more than happy to help them out with it. Karnataka government is the only one to have initiated a centre of excellence for Aerospace," he added.
Athough a lot of initiatives have been taken by the government, is any of it truly leading to an enhanced ecosystem that can be conducive to setting up such industrial-based companies? Kharge says, the single most important thing is the need to change the mindset when it comes to viewing work done by the government and administrative agencies.
"No matter how much I do I always face flak as to why this was left and why that was not done. Which is ok as I understand constructive criticism. But the mindset has to change when it comes to viweing our work," he added. "We are also tied in terms of funds, yet have allocated as much we can within our limits and fostered growth opprtunities for these companies, which I believe is more important."
He also believes the big corporates need to step up their game when it comes to investing in such sectors.
"If we talk of heavy industry, the practical set up is with the big companies. And they need to step in. Like we have Kiran Mazumdar Shaw from the biotech space who has taken an active step to look after growth opportunities for biotech startups, more such leaders are encouraged and we are happy to work with them," he added.