Let them rock

While companies such as Alibaba and Weibo have drawn the world’s attention to China’s growing tech scene, far less has been said about India. This would be overlooking the scenario here. With 1.2 billion people and a rapidly growing economy, India is ripe for a tech explosion of its own.

And exploding it is. The country received $1.8 billion in venture funding in 2013, and $1.9 billion in the fourth quarter of 2015 alone.

With a highly educated population and over 300 million Internet users — the second-largest Internet market in the world — India has both the workforce and the market to support a thriving tech industry.

Take Flipkart; founded in 2007, it is valuated at $15 billion, and raised another $550 million from investors earlier this year. The company’s $1 billion in sales is just a fraction of a market that is expected to hit $100 billion by 2020.

Another ecommerce site, Snapdeal, has 45 million registered users and ships 8 million packages each month.

E-commerce is just one place where India’s startups have found success. Quikr, an online classifieds website, has received funding from Tiger Global Management, Warburg Pincus and eBay, and has been valued at $1 billion.

Other businesses are working to tap into broader markets in India, such as EFarm, which is helping to solve logistic issues in the agricultural sector, or Eko India, which provides banking services to Indians without a bank account.

In total, there are more than 3,100 startups in India, and the pace of their creation is rapidly increasing — 800 were created in 2014. These startups are also attracting top talent from US companies, including Google. This has led to India developing its own versions of America’s Silicon Valley in Bangalore and Hyderabad. In these cities, there is a great deal of excitement and enthusiasm for the future of India’s tech sector.

Beyond startups, India is also the home of Infosys and Wipro, two companies that are at the top of their industries globally. With the influx of talent into India and the growth of entrepreneurship, it has the potential to develop more successful multinational corporations. The ambitious ‘Digital India’ programme can herald another tech-revolution in the country and bring out the hitherto latent talent in youth.

If India is to capitalise on these opportunities and realise its potential, it must be careful not to create rules that would make it harder for these companies and initiatives to succeed. India is already ranked 142 in the world in ease of doing business, according to the World Bank. Regulators should endeavour to remove obstacles to running a business, not add to them. Further regulations will deter investors.

While regulations are necessary for orderly growth, the global trend is that each regulation should be evaluated with reference to its benefits to society vis-à-vis the cost and time involved in its adherence.

India appears to be on the cusp of a period of tremendous growth in technology, and to be a force to be reckoned with in the global market. India’s policy leaders should do their best to support the country’s nascent tech sector and ensure that its businesses are in the best position to succeed.

The tech world and the Internet are changing rapidly, at times at faster pace than the regulatory landscape, and in ways that are difficult to predict. Regulators in India should be careful not to stifle innovation, or hold back promising companies, through overregulation.

The writer is former Chairman, Competition Commission of India

COMMENT NOW