There’s nationalism in the air again. Flipkart founder Sachin Bansal and Ola founder Bhavish Aggarwal are apparently encouraging PM Narendra Modi’s government to make policies which favor homegrown companies, media reports say.
“What we need to do is what China did [15 years ago] and tell the world we need your capital, but we don’t need your companies,” The Economic Times quotes Sachin as saying, speaking at the Carnegie India Global Technology Summit.
“When a ride goes to Uber for example in India, the higher-end jobs are being created in the US and not in India. The capabilities in the ecosystem are getting created in the US and not in India, while when it comes to Ola the capabilities are being created in India,” Sachin said, Business Standard reports.
Flipkart is fighting a pitched battle with Amazon’s India unit. Ola is in it against Uber.
“When you see the capital story that’s where the Indian ecosystem is at a disadvantage. Number one is that there’s no local capital, we have to go abroad for capital and it’s much easier for non-Indian companies to raise capital because they’re profitable elsewhere,” said Ola boss Bhavish at the same event.
“You might call it capital dumping, but it’s a very unfair playing field for the Indian startups and something needs to be done about it.”
Not everyone agrees, of course.
Now Singapore firm @Flipkart & Canadian-Russian-Japanese firm @Olacabs claim they're Indian & govt should stop US firms @amazonIN & @Uber
pic.twitter.com/vbHbXZgjHK
— Mahesh Murthy (@maheshmurthy) December 8, 2016
Find this protectionist clamour amusing! When you're a photocopy of foreign models & largely have foreign capital. China isnt our role model https://t.co/E8fJXI1u6d
— Amit Ranjan (@amitranjan) December 8, 2016
‘Distorted by capital’
The comments come at a time when Flipkart and Ola are rumored to be in the middle of their respective fundraising efforts. Industry sources also say both companies are facing difficulties raising money at their valuations.
On the other hand, India has become a priority market for Amazon and Uber – that typically means Jeff Bezos and Travis Kalanick are open to spending as much money as needed to boost market share here.
In June, Amazon said it would boost its investment in India by US$3 billion. Uber’s India division is expected to be a big benefactor of the US$3.5 billion the parent company pocketed in June.
India’s economy is more of an open market than China’s, but it has some policies for pharma, automobiles, IT, and banking that encourage local entrepreneurs to build a strong base before opening up for competition.
“What’s happening in both our industries [is that] there is narrative of innovation that non-Indian companies espouse but the real fight is on capital, not innovation. The markets are being distorted by capital,” added Ola’s Bhavish.
Nationalism has been tapped into fights before, but this is the first time top tech bosses in the country have called for government help with policy.
See: Dear Ola (and Uber): users want efficiency, not nationalist hyperbole
“There is a glass ceiling for the Indian startups. If I want to meet the Prime Minister it won’t be as easy as a foreign guy coming to India. I understand that dynamic and we need to make sure government sees us as major contributors to society, which is not full there,” Bhavish said.
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