Flipkart’s Sachin Bansal reiterates call for a level-playing fieldgbs17
NEW DELHI: The controversial demand for a level playing field for Indian startups raised its head once again, with two of the country’s top entrepreneurs stating that regulatory parity was a must, in order for domestic ventures to grow and innovate.
“We have the opportunity to build great internet companies from India, but we need to create a fair playing field. If we are able to create that level playing field, Indian companies will have significant advantages,” said Sachin Bansal, executive chairman of Flipkart, the country’s largest ecommerce company.
Bansal was speaking at The Economic Times Global Business Summit, held in New Delhi, on Wednesday.
Other speakers on the panel included Amit Agarwal, the India head of online retail behemoth Amazon, Vijay Shekhar Sharma, founder of Paytm, Deep Kalra, chief executive of MakeMyTrip, Ravi Lambah, co-head – India for Temasek and Ashish Hemrajani, chief executive of BookMyShow.
While Bansal’s comments were not directly addressed towards Amazon’s Agarwal, he has, in the past, accused the company of using India as a ‘capital dumping ground.’
Bansal’s stance was supported by Deep Kalra, chief executive of Nasdaq-listed MakeMyTrip, India’s largest online travel agency.
“I’m totally with Sachin on the level playing field. Foreign companies do not need to fulfil conditions, like two-factor authentication. There are companies, who do not have to pay service tax, because they are not domiciled in India. Their servers and legal entities are somewhere else, but they are servicing Indian customers,” Kalra said.
Amazon’s Agarwal, however, responded by saying that the online retail company was an Indian company.
“I just want to reiterate that Amazon is a company incorporated in India, domiciled here. It follows all mandated laws, such two-factor authentication, and pays service tax as well,” he said.
This, however, wasn’t the first time that Bansal had asked for the creation of government policies favouring home-grown ventures. In December, he, along with Bhavish Aggarwal, the founder and chief executive of Ola, had asked for protectionist support from the government against US internet giants Amazon and Uber.
At the time, the two poster boys of the Indian internet defined their battle as one in which capital plays the most important part and not innovation, implying that the US companies are burning cash in a price war.
While both Flipkart and Ola continue to occupy the top spot in their respective industries, they continue to face significant challenges from their US-based rivals, who have gained market share at a much more rapid pace, in spite of entering Asia’s third-largest economy much later.
Amazon has continued to double down on India, which it has identified as a key geography for growth outside its home market of Us, and Europe.
In December, it invested Rs 2,010 crore in its main Indian unit, marking the single largest capital infusion so far as it bids to topple market leader Flipkart from its perch atop one of the world’s fastest-growing markets for online retail.
Separately, Flipkart is in talks to seal a funding round of up to $1.5 billion. US-based eBay and China’s Tencent are the frontrunners in the transaction that could make the Indian arm of the American online marketplace a part of the bengaluru-headquartered online retailer.