Aspiring Entrepreneurs in India Face Immense Challenges, But Must Persevere

By Abhi Golhar

Entrepreneurs, India needs you. It’s time for entrepreneurs in India, and for those of us abroad, to rise to the challenge to bolster the economy by creating jobs for the youth amidst grave challenges that include societal judgment and bureaucratic inefficiencies. Those entrepreneurs who wish to create a positive impact for India must challenge the status quo, be risk takers and most importantly, not be afraid to fail.

A few years ago, my family and I started a ginning and oils company in my father’s hometown of Hinganghat, India. Our objective was simple — to create jobs and educate locals while running a profitable venture. Currently, I visit once or twice a year to learn about the market and oversee operations. During my travels, I’ve noticed how difficult it is to be an entrepreneur in India, and the following are the hurdles I believe entrepreneurs will face when starting a business:

  • No Appetite For Failure: Indian culture is intolerant of failures. If an entrepreneur does not succeed on the first attempt, s/he is given no recognition for attempting something new. “Playing it safe” is a modern mantra in India. This is a primary reason why, despite having a skilled workforce, there are minimal technological innovations to come out of India. Additionally, a young entrepreneur is discouraged by his or her parents from starting a business for fear of financial loss and not being able to find a suitable spouse.
  • Lack of Capital And Moral Support: Indian parents want their children to get a good education and find a job with foreign multi-national corporations, domestic companies or government. Hence, an entrepreneur is considered an outlier and his or her business venture unworthy of serious consideration by family members. Parents’ unwillingness to finance initial activities and relatives’ scorn, in the event of a business failure, is very difficult to overcome.
  • Outdated Education System: Indian education system focuses more on memorization and very little effort is expended to develop a student’s critical thinking and risk-taking abilities. Often, students are discouraged to ask questions as it is considered an affront to the teacher. Moreover, little thought is given to developing a student’s natural talent. As a result, a graduating student is risk averse and unprepared to handle the challenges of real life. These students, lacking self-confidence, have no option but to seek employment. They will do only what they are told, and unfortunately, nothing more.
  • Bureaucracy: In India, there are rules for everything — except that only a few follow them. No government servant questions the relevance of the archaic rules passed by politicians or high ranking officials, or challenges them. The sole purpose of the bureaucrats is to appease elected officials so that they can stay gainfully employed. Questioning and critical thinking are not encouraged in Indian bureaucracy. As such, most are happy to follow the rules blindly. This attitude discourages an entrepreneur immensely. From getting a bank loan to securing a no-objection certificate for pollution control, an entrepreneur faces public servants’ apathy that is astounding. They are not concerned about the time and capital it will take to collect the needed documents or clearances. This adds to the cost of starting a business and the uncertainty about project completion time. Additionally, corruption is a bane of India. The country suffers from graft that has permeated every fabric of Indian society. For any service discharged to public, officials expect remuneration in return. Even though an entrepreneur has fulfilled all requirements and submitted all the necessary documents, expect no authorization or certification unless an official is handsomely rewarded on the side.
  • Shifting Government Regulations: The only constant about Indian regulations is change. Regulations keep changing at the whim of a political party or an appointed bureaucrat. This is evident from a retroactive income tax charged to Vodafone; an entrepreneur cannot take the regulations for granted and often, may not even know that the regulation has changed.

It may seem daunting to start an entrepreneurial venture in India, and some may elect to pursue opportunities in other countries with better systems that offer a higher chance of success. But this doesn’t solve the problem at hand: Our call to action is to grow businesses amongst these challenges so future generations have the reassurance of job growth and most importantly, value entrepreneurs in the same regard as engineers, physicians and accountants. If you’re willing to face the challenges head-on, there are benefits to reap.

  • Manageable Competition: Being a developing country, there is little competition for entrepreneurs with strong morals and innovative ideas. As long as the service is unique, there is a good chance that the business will succeed. Keep in mind that there is no intellectual property right protection. Therefore, once a new service/product is introduced to the Indian market, an entrepreneur will face competition from copycat products immediately.
  • Growing Middle Class: The Indian middle class has swelled to hundreds of millions of people in the last decade. With population and earning potential of individuals on the rise, there is a growing demand for services in every sector that add value to consumers at an affordable cost.
  • Government Subsidies: With about 12 million youth entering the labor force every year, the government wants more jobs created in India. Hence, through Make in India and other initiatives, it is eager to help startups. To incentivize new companies, federal and state governments are offering subsidies in the form of low interest on borrowed capital, no taxes for five years and more.
  • Labor: A skilled labor force is readily available. One can hire a well-trained engineer, with years of experience, for less than $10,000 per year. This may be higher depending on skill specialization, but overall, labor cost in India is very low.

Do I believe India can have a bright future for entrepreneurs? Yes — but it starts with a cumulative, fundamental shift in mindset, starting now.


Abhi Golhar is host of the daily radio show, Real Estate Deal Talk, and managing partner of Summit & Crowne, a real estate investment firm.

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