In my opinion, the statement is definitely true for services startups. They can generate profits in the short/medium term.
IMHO, the issue with product startup funding in India is that once a team starts product development on their own money and creates a prototype, most Indian investors would like the team to get initial traction. And once they get initial traction, they ask for sales model/ scaling validation. That's why most founders prefer seeking funding at the concept stage rather than step on the slippery slope of validation.