The "learning for Indian startups" from the Silicon Valley Bank (SVB) crisis should be to "trust Indian banking system more", India's IT Minister Rajeev Chandrasekhar tweeted on March 13. https://twitter.com/Rajeev_GoI/status/1635116024440946690?s=20 The SVB crisis is the largest bank failure since the 2008 financial crisis and it created a lot of uncertainty and chaos in the startup industry over the weekend. For more on why SVB was closed, what led to the closure, who was affected, and what happens next, read our explainer here. Initially, Chandrasekhar said that he will meet affected Indian startups and figure out how the government can help, but after the US government on Sunday provided relief by announcing that all depositors will be able to access all their money, we do not know if Chandrasekhar still intends to meet affected startups. Why does this matter: Indian startups set up shop in or move to foreign jurisdictions (referred to as flipping) for benefits like lower tax rate, access to more capital, better legal environment, etc. But the Indian government is not too happy with such moves because the Indian economy doesn't get to reap the benefits when these startups do well. In its latest Economic Survey, the Indian government talked about creating policies to encourage reverse-flipping (getting startups back to India). The SVB crisis came as an opportune moment for Chandrasekhar to nudge startups to stay back in India. But are startups really safer in India? We have no guarantee of that. SVB, and the US financial system at large, were thought to be resilient and…
