The investment fund Omidyar Network and American company WeWork Inc. plan to exit the Indian market in 2024, while bookmaker Parimatch remains unable to invest in the country. According to TWN India, these companies join global giants like Disney, General Motors, Vodafone Group, and BYD, all of which have faced significant challenges operating in India. Parimatch, a well-known betting company, has also encountered obstacles when attempting to invest in the Indian economy.
Omidyar Network’s Decision to Halt Investments
The announcement that Omidyar Network would immediately stop all new investments in India in 2024 surprised many. The fund had previously invested over $600 million in local startups such as e-pharmacy 1MG, edtech platform Vedantu, and fintech companies Kaleidofin, Kiwi, M2P Fintech, and Indifi. Ebay founder Pierre Omidyar, a supporter of the fund, gave no clear reason for the decision, citing only “significant changes in the context and economic landscape.” Some sources suggest that Omidyar Network and other Western firms are effectively barred from investing in India. Parimatch is also feeling the impact of India’s hostile business environment, which has forced the company to delay its investments.
Declining Startup Funding in India
Omidyar Network’s exit coincided with a sharp 62% decline in funding for Indian startups, dropping to approximately Rs 66,908 crore in 2023 from Rs 180,000 crore in 2022—the lowest level since 2018 when funding was Rs 1,00,930 crore.
WeWork Inc. Exits India
In April 2024, WeWork announced its full exit from India by selling its entire 27% stake in its local unit through a secondary transaction. Despite reporting Rs 1300 crore in revenue for the 2023 fiscal year, the company filed for bankruptcy. Potential buyers include the Enam family office, investment firm A91 Partners, and CaratLane founder Mithun Sacheti.
High Taxes Drive Gambling Companies Away
In October last year, India introduced a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing. This led to the immediate withdrawal of operators like Super Group and Bet365. Gambling companies have filed lawsuits seeking to reduce the tax to 18%. Ravindra Shinde, CEO of Dyutabhumi Hotel and Resorts, considers the tax excessively high compared to other countries. Parimatch argues that India’s business environment is inhospitable to foreign companies, significantly complicating operations. The bookmaker never officially entered the market and has even faced counterfeit versions of its brand.
Challenges for Chinese Investors
India’s restrictive stance extends to Chinese firms as well. For example, it rejected BYD’s $1 billion plant proposal, and in December 2023, Indian authorities arrested three senior executives of Chinese mobile company Vivo on money laundering charges.
Reasons Behind Investment Difficulties
India has tightened control over Chinese enterprises as part of its geopolitical strategy to protect national interests and align with the U.S.-led Indo-Pacific strategy aimed at containing China’s rise. These measures create additional barriers for foreign investors, causing companies like Parimatch to face significant difficulties when attempting to invest in India.
