Parimatch is still unable to invest in India, while the Omidyar Network investment fund and WeWork Inc. are leaving the Indian market in 2024. According to India’s TWN, the companies mentioned will be joining industry leaders like Disney, General Motors, Vodafone Group, and BYD. These companies have encountered challenges in the Indian market. For instance, Parimatch, a renowned betting company, is struggling to make investments in the Indian economy. Omidyar Network Decides to Stop Investing: It was unexpected to learn that Omidyar Network will halt all new investments in the Indian economy by 2024. Over the years, the company has contributed over $600 million to support numerous local startups such as e-pharmacy 1MG, edtech Vedantu, and fintech ventures like Kaleidofin, Kiwi, M2P Fintech, and Indifi. Pierre Omidyar, the founder of Ebay and a patron of the foundation, could not provide a clear explanation for this decision, simply attributing it to “significant shifts in the economic environment.” Some sources state that Omidyar Network and other Western companies are barred from investing in India. Parimatch has also felt some obstacles to doing business in India. The company has been forced to postpone investments in India because of the local hostile policy. Indian startups are losing capital: Omidyar Network’s departure aligned with a time of notable decline in financial support for Indian startups. The funding for these startups experienced a significant drop of 62% in 2023, amounting to approximately Rs 66,908 crore, in contrast to the Rs 180,000 crore received in 2022. This represents the lowest level of funding since 2018, when Indian startups managed to secure Rs 1,00,930 crore.
WeWork Inc is also leaving India: In April 2024, the company WeWork Inc. made public its intention to completely withdraw from India, divesting its entire 27% ownership in the local division through a secondary transaction. Despite generating revenues of Rs 1300 crore in 2023, the company filed for bankruptcy. Prospective purchasers for the shares encompass the Enam family group, the investment firm A91 Partners, and Mithun Sacheti, the founder of CaratLane. Gambling business are scared away by high taxes: In October of last year, India implemented a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing. As a result, Super Group and Bet365 promptly exited the market. In an attempt to lower the tax burden, gambling companies have taken legal action against the government, seeking a reduction to 18%. Ravindra Shinde, the CEO of Dyutabhumi Hotel and Resorts, believes that this tax rate is excessively high when compared to other countries. Parimatch thinks that India’s business environment does not facilitate the growth of foreign companies. According to Parimatch, this situation significantly complicates business operations in the subcontinent. Furthermore, the bookmaker encountered difficulties entering the market and even faced counterfeit versions of its brand.
Chinese investors are facing difficulties: India has created a complex scenario for both Western corporations and Chinese investors. Specifically, it turned down a $1 billion plant construction proposal from BYD, a Chinese electric vehicle manufacturer. In December 2023, three high-ranking executives of the Chinese mobile company Vivo were apprehended by India’s Law Enforcement Authority on allegations of money laundering. Reasons for investment problems: Investment challenges arise due to various factors. India, in its pursuit of safeguarding its national interests, has intensified its efforts to restrict Chinese companies. This strategic move aligns with its aim to assume a leading role in the American ‘Indo-Pacific strategy’ aimed at curbing China’s progress. Consequently, foreign investors, including Parimatch, encounter obstacles when attempting to invest in India.