43-year old Vijay Shekhar Sharma who runs e-commerce firm Paytm backed by Chinese investors, on Thursday said that India’s traditional business houses should start investing in domestic startups. He added that Indian entrepreneurs need foreign investors largely because of the lack of availability of domestic capital.
“I am all for domestic investments. I want every domestic rich person to start putting money in startups. I truly call upon on them. India’s old economy companies should bring that capital back to put money in startups. Why do we need outside investors when we can have people from inside (the nation),” Sharma said on the sidelines of an event.
He was speaking on the issue of capital dumping by global firms, which has closed the doors to entrepreneurship in many sectors including taxi aggregation and online marketplace.
Domestic firms such as Paytm, MakeMyTrip, Flipkart and Ola have been demanding a level playing field from the Modi government. Their grouse is that foreign firms that operate in India are met with a different treatment through government policies, making them uncompetitive.
Ironically, Paytm which has investments from China’s Ant Financial has also been on the receiving end by rivals including Mobikwik for dumping capital to gain the customer base.
Last year, Mobikwik’s Bipin Preet Singh told a newspaper that people must be sensitive to companies, especially those that have massive foreign investments. “They can come into the country, dump capital and gain access to data,” he said indicating at rival Paytm.
However, Sharma believes that India is an open market, and the doors of capital are open to everybody. Paytm on April 27 also said that the company has grossed 1.5 billion transactions and a gross merchandise value of USD 5 billion in the financial year that ended March 2017.
The chorus has been echoed by India’s digital entrepreneurs in past, including Flipkart co-founder Sachin Bansal, and MakeMyTrip CEO Deep Kalra in a new found nationalism seen amongst Indian unicorns.
Last month, Sachin Bansal said, “What is happening in India is pretty unprecedented. Such a situation has not happened anywhere in the world so far. A significant amount of capital is being dumped in India to win market share. We should create a digital economy. But not by creating an unfair playing field for local companies against those companies coming from other countries.”
Asking for a level playing field against global rivals such as Airbnb and Expedia expanding in India, Deep Kalra recently said that Indian government has taken the motto of ‘Atithi Devo Bhava to a different level altogether.’
“We are very fortunate that we are in India. However, there is actually not a level playing field. Foreign companies don’t have to abide by a two-factor authentication for payments, we do so. Similarly, there are foreign companies in India who do not pay service tax,” Kalra added.
“I think we have taken the motto of Atithi Devo Bhava to a different level altogether,” Kalra said during a chat with Flipkart CEO Kalyan Krishnamurthy, earlier this month.
Source: Money Control
