Pak VS Ind: What Indian startups did that Pakistan is failing to do?

The Indian startup ecosystem has emerged as one of the strongest in the world, producing multiple unicorns and attracting billions in investments. Meanwhile, Pakistani startups continue to struggle with funding, scalability, and sustainability.

Since 1947, India has remained our favorite benchmark for comparison—and the sentiment is mutual. While there’s nothing inherently wrong with this rivalry, it has often fueled skepticism about Pakistan’s economic standing rather than fostering meaningful progress. Instead of using these comparisons as a catalyst for improvement, we have repeatedly failed to learn from past missteps, hindering our ability to craft effective policies for sustainable growth.

This will always remain my concern: even after watching ourselves being overpowered by our neighbor due to our lack of sensible policymaking, we have not improved even a bit. Repeating the same mistakes, failing to introduce practical reforms, and wasting our existing potential are things we have been doing since our independence.

"Can our startups perform like India?"
Yes.

"Are our startups performing like those of India?"
No.

We usually consider both the above questions as the same but the reality is that Pakistan's potential is far different from its current progress. First question targets its potential and second its progress. 

For a startup to operate successfully the most important factor is the presence of enough financial support. This support is attracted through confidence and strong future planning by the receiving end. Unfortunately Pakistan's economic condition and growth development creates a lot of uncertainty in terms of the returns and profits that investors can expect. 

India has attracted over $136 billion in startup funding in the last decade, with 108 unicorns (startups valued at over $1 billion). And this has been made possible due to India's strong venture capitalism culture. 

​In 2023, India's startup ecosystem secured approximately $11.3 billion in funding, marking a 60% decline from 2022 and the lowest in seven years. In contrast, Pakistani startups attracted around $75.6 million during the same period, reflecting a 77.2% decrease compared to the previous year. This significant disparity underscores the challenges faced by Pakistan's startup landscape in securing investment.​

Along with weak economic stability, inconsistent policy making is also creating a significant impact on the amount of investments our startups are able to secure. Consistency in politics of Pakistan has always been questionable since 1947. We have always faced challenges in terms of the political parties taking office, none of our Prime Ministers have been able to finish their tenure. 

As power changes hands, every ruling party comes up with their own reforms to prove themselves better then the previous power holders. And this cycle seems to be never ending. The relentless tug-of-war in politics is casting a shadow over our economic policies, prioritizing political agendas over tangible economic progress. Instead of fostering financial stability and growth, decision-making remains entangled in the web of political self-interest, stalling the nation's economic potential.

The Indian government launched initiatives like Startup India, Digital India, and Make in India in contrast Pakistan’s policies remain fragmented, with startups facing bureaucratic red tape, high taxation, and lack of incentives. Even when our government proposes reforms to support the startup sector, investors remain hesitant, wary of abrupt policy reversals driven by the nation’s unpredictable economic and political landscape.

India’s vast population of 1.4 billion people provides startups with a massive domestic market to operate in. Moreover India has a steady reach to the international market too which enables it to expand globally. This global outreach has been made possible due to the trusted relationship and image that Indian startup culture has in the world economy. But, conversely, Pakistan has been left behind in all these domains. It has little access to international markets due to a lack of trust in Pakistani startups and trading barriers. We fail to create a loyal customer base due to our varying taxation policies impacting costs and competitiveness, the absence of stable payment methods, and extremely high competition. And because we have almost touched the topic of payment restrictions faced by Pakistan lets go a little deep into it. India’s UPI (Unified Payments Interface) has revolutionized digital transactions which has sky rocketed digital payment culture. On the other hand Pakistan is still stuck in the cash economy. Our banking system is too weak to be trusted with such online transactions, although we have other platforms like Payoneer and Wise and many more but they have their own limitations. At the end of the day, payment pathways are limited and digital infrastructure is very weak.

Now, let’s shift our focus to the shortcomings on an individual level. We've spent enough time pointing fingers at the government and the economy—factors that, for the most part, lie beyond our control. Complaining about them endlessly won't change anything. Instead, let’s talk about what we can do—how we can cultivate the mindset, skills, and resilience needed to become better entrepreneurs and drive change from within.

Indian entrepreneurs embrace calculated risk-taking and innovation, with success stories like Flipkart, Paytm, and Byju's inspiring new startups. They have broadened their domain for business ideas and plan to specialize in a few only which helps them in concentrated market research and planning.

Pakistani culture remains more risk-averse, with many hesitant to leave stable jobs for entrepreneurship. We are not ready to move out of our comfort zone and do something less-routine-like. Moreover, the "fear of failure" discourages experimentation and innovation. We should aim to study, comprehend, and “correct” that notion so that it fits within our country. Changing out narrative towards failure should be our key priority before we work on other soft skills.

In conclusion, I would like to say that the mindset is not to copy Indian startup ecosystem, it is about learning from the better. We cannot deny the fact that in the coming decade India will be marking its position as the largest economy after China (with the Trump's win, America is expected to step back as it plans to change its approach towards economic growth). Pakistan has to work on its political and economic stability as they both go hand in hand in either booming or destroying the startups of a country. Thank you for reading, and I hope you find this discussion valuable! Maew!!