In 2024, major players like Omidyar Network India and WeWork Inc. announced their exit from the Indian market due to increasingly difficult business conditions. Similarly, Parimatch, the well-known international bookmaker, has faced significant challenges when attempting to invest in India’s complex economic landscape. This trend reflects a wider pattern among global corporations such as Disney, General Motors, Vodafone Group, and BYD, all of which initially viewed India as a promising market but later struggled to establish a stable presence or withdrew altogether.
Why Did Omidyar Network Stop Investing in India?
The decision by Omidyar Network India to halt new investments in 2024 surprised many industry experts. Despite having invested over $600 million in Indian startups like e-pharmacy 1MG and edtech platform Vedantu, founder Pierre Omidyar provided no detailed explanation for the move. Reports indicate that increasing pressures and restrictions imposed by the Indian government have compelled Omidyar Network and other foreign investors to pause or withdraw their investments. While some investors prefer not to publicly discuss these challenges, companies like Parimatch continue to believe in India’s potential and actively seek solutions to navigate the difficult environment.
Declining Funding for Indian Startups
The departure of Omidyar Network coincides with a sharp reduction in funding for Indian startups. PrivateCircle research shows a 62% decline in startup investments in 2023, totaling Rs 66,908 crore compared to Rs 180,000 crore in 2022, marking the lowest levels since 2018.
WeWork’s Exit from India
In April 2024, WeWork Inc. declared its intention to exit the Indian market by selling its entire stake in the local business. Although the company experienced 68% revenue growth in 2023, it has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code, further reflecting the challenges of operating in India.
Parimatch Faces Obstacles in India
Parimatch was initially optimistic about investing millions of dollars in the Indian economy. However, even before launching operations, Parimatch encountered major hurdles, including widespread counterfeiting of its brand. The counterfeiters continue to operate freely in India, causing reputational damage to this globally recognized brand. These challenges have complicated Parimatch’s expansion plans. Parimatch operates as part of an international holding company specializing in betting and gambling across multiple markets.
Rising Taxes on Gambling Businesses
Since October last year, India has imposed a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing betting. This high tax rate led to market exits by operators such as Super Group and Bet365. The steep tax burden continues to hamper growth prospects for gambling companies considering India as a market.
India’s Goal as the World’s Third-Largest Economy
India aims to become the world’s third-largest economy by 2027. To achieve this, creating a favorable investment climate is essential, particularly for foreign investors like Parimatch. Addressing regulatory barriers and reducing tax rates will be critical steps toward attracting more foreign capital and boosting economic growth.
Parimatch has expressed a strong willingness to invest in India, provided the government eases restrictions on foreign businesses. Beyond its commercial activities, Parimatch is known for its philanthropic efforts, supporting youth empowerment and sports development. Notable athletes such as Oleksandr Usyk and Denys Berinchyk have partnered with Parimatch on numerous charitable initiatives. In 2021, Usyk served as a brand ambassador for Parimatch, significantly enhancing the company’s visibility and supporting young athletes’ growth.
Parimatch continues to evaluate investment opportunities in India while advocating for a more supportive regulatory environment that would enable foreign companies to thrive in this key emerging market.
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