India, June 2 -- With the war in West Asia looming over India's business environment, May brought a slower, more cautious rhythm to the country's startup ecosystem.

The world's third-largest startup market spent much of the month in a defensive mode, with listed and late-stage startups leaning into earnings disclosures to woo investors even as the broader ecosystem was hit by layoffs, controversies and macroeconomic strain.

The month saw startups like Apna Mart, Adda247 and Innovaccer lay off employees in droves, citing higher AI adoption and cost pressures. At the same time, it also brought to the fore uncomfortable questions around the human cost of AI expansion.

Meanwhile, quick home services startup Pronto came under scrutiny after...