'Why is it not happening in India?': Aswath Damodaran asks why US tech thrives while Delhi lags
“If I were an Indian rulemaker… the question I’m asking is: what is it that will allow a small unknown company with a great technology to become a large mega-cap company over 15 years?” he asked. “And why is it not happening in India?”
- Oct 9, 2025,
- Updated Oct 9, 2025 4:20 PM IST
India must ask why its tech sector isn’t producing global mega-cap giants, says valuation expert Aswath Damodaran, urging policymakers to fix what he sees as systemic obstacles holding back innovation.
In a podcast with ETBFSI, Damodaran compared India’s startup ecosystem to the U.S., which he described as “unique” for enabling tech companies to scale rapidly from obscurity to trillion-dollar valuations.
“Europe has no great tech companies. Latin America has no great tech companies. Canada’s maybe got a couple — Shopify, maybe Spotify in Europe — but the U.S. is different,” he said, pointing to companies like Facebook, which hit a $2 trillion market cap in just over a decade. “There’s something in the process that allows that to happen in the U.S. but doesn’t seem to allow it to happen elsewhere.”
Damodaran challenged Indian regulators to confront this disparity head-on.
“If I were an Indian rulemaker… the question I’m asking is: what is it that will allow a small unknown company with a great technology to become a large mega-cap company over 15 years?” he asked. “And why is it not happening in India?”
Rejecting the notion that talent is the issue, Damodaran noted that many Indian-led firms succeed abroad. “Can’t be that we don’t have the brains,” he said. “It must be something in the system that’s getting in the way.”
He urged a reassessment of India’s structural barriers, suggesting that without reform, the country will struggle to create world-beating tech firms. “If India wants those five of the top 10 companies — or three of the top 10 companies — to be young Indian companies that have come out of nowhere and shot to the top, that part of the process has to be fixed,” he warned.
India must ask why its tech sector isn’t producing global mega-cap giants, says valuation expert Aswath Damodaran, urging policymakers to fix what he sees as systemic obstacles holding back innovation.
In a podcast with ETBFSI, Damodaran compared India’s startup ecosystem to the U.S., which he described as “unique” for enabling tech companies to scale rapidly from obscurity to trillion-dollar valuations.
“Europe has no great tech companies. Latin America has no great tech companies. Canada’s maybe got a couple — Shopify, maybe Spotify in Europe — but the U.S. is different,” he said, pointing to companies like Facebook, which hit a $2 trillion market cap in just over a decade. “There’s something in the process that allows that to happen in the U.S. but doesn’t seem to allow it to happen elsewhere.”
Damodaran challenged Indian regulators to confront this disparity head-on.
“If I were an Indian rulemaker… the question I’m asking is: what is it that will allow a small unknown company with a great technology to become a large mega-cap company over 15 years?” he asked. “And why is it not happening in India?”
Rejecting the notion that talent is the issue, Damodaran noted that many Indian-led firms succeed abroad. “Can’t be that we don’t have the brains,” he said. “It must be something in the system that’s getting in the way.”
He urged a reassessment of India’s structural barriers, suggesting that without reform, the country will struggle to create world-beating tech firms. “If India wants those five of the top 10 companies — or three of the top 10 companies — to be young Indian companies that have come out of nowhere and shot to the top, that part of the process has to be fixed,” he warned.