To climb uphill, desi startups seek level fieldgbs17
NEW DELHI: The controversial demand for a “level playing field” for Indian startups was raised 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.
Amazon India head Amit Agarwal, one of Bansal’s fellow panelists at the discussion on ‘Winning the Online Race’ at the Global Business Summit, responded by saying the local operation was a fully Indian entity.
“I just want to reiterate that Amazon (India) is a company incorporated in India, domiciled here. It follows all mandated laws, such as two-factor authentication, and pays service tax as well,” he said.
The others on the panel were Paytm founder Vijay Shekhar Sharma, MakeMyTrip CEO Deep Kalra, Temasek India co-head Ravi Lambah and BookMyShow CEO Ashish Hemrajani.
Bansal was supported by Kalra of Nasdaq-listed MakeMyTrip, India’s largest online travel agency.
“I’m totally with Sachin on the level playing field. Foreign companies do 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.
This isn’t the first time Bansal has sought policies favouring homegrown ventures. In December, he and Ola founder Bhavish Aggarwal had called for protectionist support from the government against US Internet giants Amazon and Uber, respectively. Aggarwal had accused overseas companies of using India as a “capital dumping ground”.
At the time, the two poster boys of the Indian startup ecosystem defined their battle as one in which capital played the most important part and not innovation, implying that the US companies were burning cash in a price war.
While both Flipkart and Ola still occupy the top spots in their respective industries, they continue to face significant challenges from their US-based rivals, which have gained market share at a much more rapid pace in spite of entering 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 the 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 dislodge 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 Bengaluruheadquartered online retailer.