Despite prevailing negative sentiments around the startup ecosystem in India, Zerodha CEO Nithin Kamath believes Indian startups will continue to lure foreign capital as the nation is the fastest-growing worldwide.

What Happened: On Tuesday, Kamath posted on X, stating, “Indian startups will most likely continue to attract foreign capital even if all the news might make it seem otherwise.”

Kamath explained that this is due to the relative nature of investment decisions and the fact that India is currently the fastest-growing country globally, sharing an image of India’s leading position in terms of economic growth. He further mentioned that Indian startups have been performing particularly well in recent times, with a focus on reducing operational costs and moving towards profitability.

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He noted, “Reducing spending isn’t impacting the growth and revenue for many of our startups as much as it is for counterparts in other countries.”

Why It Matters: Kamath’s comments serve as a counterpoint to the widespread belief that foreign investments in Indian startups are slowing down amid a global economic deceleration. His assertion is that Indian startups are performing better than their global counterparts.

As the CEO of Zerodha, one of India’s leading digital brokerage firms, Kamath’s insights could potentially encourage more investors to consider Indian startups as a viable option for their portfolios.

Sharing anecdotal evidence from conversations with some international investors, Kamath said Indian startups seem to be faring better in the last year or so, where the focus has been more on reducing burn and getting on the path to profitability.

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