Indian startup founders are back with the “foreign vs Indian” argument.
Calling for a level playing field, Flipkart co-founder Sachin Bansal reiterated his demand for protection against competition from foreign firms. This essentially implies that homegrown firms be governed by easier laws and have better access to capital.
At a recent event in New Delhi, the executive chairman at the online retailer said Indian founders can build great internet companies, “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.” Bansal was speaking at a panel discussion at the Economic Times Global Business Summit.
He was somewhat countered by Amazon India chief Amit Agarwal. “I just want to reiterate that Amazon 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.
Bansal’s comments come at a time when large consumer internet firms in India are facing funding crunch, tough competition from foreign firms, and consolidation in the industry. Many founders have, hence, been calling for protectionist or favourable policies for local firms in Asia’s third-largest economy.
The debate first arose late last year after Indian founders accused foreign rivals of “dumping capital” here. “I think what we need to do is what at some level China did: [tell foreign players that] we need your capital, but we don’t need your companies,” Bansal said during a panel discussion at Carnegie India’s Global Technology Summit in December 2016. His remarks found many supporters back then, including Bhavish Aggarwal, CEO at taxi-hailing service Ola.
Their stance has, however, been questioned by many who said that most Indian startups flourished due to funding from foreign VCs.
Indeed, due to the country’s high tax rates and complex taxation structures, Indian technology companies rely on foreign funds and investments. Besides, only a handful of large conglomerates have backed internet firms in India unlike those in the west where funding from local corporates is common.