By Omidyar Network and WeWork Inc are set to exit the Indian market this year as a result of challenging business conditions, while bookmaker Parimatch is unable to make investments in the country for the same reasons.
Business Money notes that in 2024, a number of prominent multinational corporations, such as Omidyar Network India and WeWork Inc., made the strategic decision to withdraw from the Indian market in response to mounting government pressure. This move echoes the experiences of other notable entities like Disney, General Motors, Vodafone Group, Parimatch, and BYD, which had initially held optimistic expectations for the Indian economy but later faced obstacles that either compelled them to exit or prevented them from entering the market.
Reasons behind Omidyar Network’s decision to cease investments
The sudden halt in Omidyar Network India’s new investments for 2024 took many by surprise. Having already poured over $600 million into different startups like e-pharmacy 1MG and Edtech Vedantu, Ebay founder Pierre Omidyar did not accompany the company’s decision by a detailed rationale.
It has been reported by certain sources that Omidyar Network India and other corporations are facing pressure from the Indian government to prohibit their investments in the country. Meanwhile, foreign investors, who prefer to remain anonymous, may provide their insights on the matter unofficially, highlighting the challenges associated with operating in India.
This gives additional challenges to companies like Parimatch that believe in the prospects of the Indian economy. Parimatch still hopes to overcome these challenges and contribute to the development of the market.
Startups experience funding drops
The departure of Omidyar Network India reflected a significant decrease in startup funding in India. PrivateCircle Research reported a 62% decline in funding in 2023 to Rs 66,908 crore, down from Rs 180,000 crore in 2022. These represent the lowest funding numbers since 2018.
WeWork Inc. leaves India
In April 2024, WeWork Inc. made public its intention to withdraw from the Indian market, divesting all of its shares in the local division. Guided by Chapter 11 of the U.S. Bankruptcy Code, the company has implemented bankruptcy regulations, despite experiencing a 68% increase in revenue in 2023.
Problems of Parimatch in India
The bookmaker Parimatch had ambitious plans to invest millions of dollars into the Indian economy. However, even before commencing its operations in the market, Parimatch faced significant challenges due to the deteriorating business climate in India. One of the major issues encountered by Parimatch was the counterfeiting of its brand. The company responsible for this activity continues to operate illegally in the Indian market, causing reputational damage to the global brand. As a result, Parimatch’s efforts to expand its business have become more complex. It is important to note that Parimatch is a brand owned by an international holding company that specializes in betting and gambling across various countries worldwide.
High taxes compilating gambling business
Last year in October, the Indian government implemented a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing betting. Consequently, companies like Super Group and Bet365 have withdrawn from the market.
How can India become the world’s third largest economy?
India’s ambition is to secure its position as the world’s third-largest economy by 2027. However, in order to achieve this objective, it is imperative to establish a conducive environment for foreign investors like Parimatch. By eliminating regulatory barriers and reducing tax rates, India can effectively attract greater foreign investment, thereby contributing to the nation’s economic growth.
Parimatch has expressed a strong interest in investing in India, provided that the government alleviates its pressure on non-resident companies. By the way, Parimatch is renowned for its commitment to social initiatives that aim to empower young individuals and promote sports. Such famous athletes such as Oleksandr Usyk and Denys Berinchyk have actively collaborated with Parimatch in various charitable endeavors. Usyk, specifically, served as Parimatch’s ambassador in 2021, enhancing the brand’s visibility and supporting young athletes in the realm of sports.
