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 firms join global giants such as Disney, General Motors, Vodafone Group, and BYD, which have all faced challenges in India. Parimatch, a well-known betting company, has encountered obstacles in its efforts to invest in the Indian economy.
Omidyar Network’s Decision to Halt Investments
The announcement that Omidyar Network would immediately cease new investments in India in 2024 surprised many. The fund had previously invested over $600 million in local startups, including e-pharmacy 1MG, edtech platform Vedantu, and fintech firms Kaleidofin, Kiwi, M2P Fintech, and Indifi. Ebay founder Pierre Omidyar, a supporter of the fund, gave no clear explanation for the decision, citing only “significant changes in the context and economic landscape.”
Some sources claim Omidyar Network and other Western companies are being barred from investing in India. Parimatch also faces a hostile local environment that has forced it to postpone investments.
Decline in Startup Funding
Omidyar Network’s exit coincides with a sharp drop in funding for Indian startups. In 2023, funding fell by 62% to approximately ₹66,908 crore, down from ₹180,000 crore in 2022—the lowest level since 2018, when startups raised ₹1,00,930 crore.
WeWork’s Exit from India
In April 2024, WeWork announced plans to fully exit India by selling its 27% stake in the local unit. The company filed for bankruptcy protection, despite reporting ₹1,300 crore in revenue in the 2023 fiscal year. Potential buyers include the Enam family office, investment firm A91 Partners, and CaratLane founder Mithun Sacheti.
High Taxes Drive Gambling Companies Away
Last October, India imposed a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing. This led to the immediate exit of Super Group, followed by Bet365. Gambling companies have sued the government seeking to reduce the tax to 18%. Ravindra Shinde, CEO of Dyutabhumi Hotel and Resorts, views the tax as excessively high compared to other countries.
Parimatch contends that India’s business conditions hinder foreign companies from growing. The bookmaker has not entered the market and has even faced brand counterfeiting.
Challenges for Chinese Investors
India’s regulatory environment also complicates matters for Chinese firms. The government rejected a $1 billion plant proposal from Chinese electric vehicle manufacturer BYD. In December 2023, Indian authorities detained three senior executives of Chinese mobile firm Vivo on money laundering charges.
Underlying Causes of Investment Challenges
India’s tightening stance on Chinese companies forms part of a geopolitical strategy to protect national interests and align with the U.S.-led Indo-Pacific strategy aimed at containing China’s rise. This approach creates additional barriers for foreign investors, including companies like Parimatch, making investment in India more difficult.