In 2024, the Indian market will see the exit of investment fund Omidyar Network and American firm WeWork Inc., while the betting company Parimatch continues to face significant restrictions on its investment plans in the country. According to a TWN report, these corporations join industry leaders like Disney, General Motors, Vodafone Group, and BYD, all of whom have previously encountered considerable challenges operating in India. Parimatch, a well-known bookmaker, similarly struggles to advance its investment strategies amid the country’s restrictive business environment.
Omidyar Network shocked the market by announcing it will halt all new investments in India by 2024, despite having already invested over $600 million in local startups such as e-pharmacy 1MG, edtech Vedantu, and fintech firms Kaleidofin, Kiwi, M2P Fintech, and Indifi. Founder Pierre Omidyar cited “significant changes in the context and economic landscape” without providing further details. Reports suggest that Omidyar and other Western companies are encountering growing limitations on their investments in India. Parimatch has also had to delay its entry and investments due to the unfavorable regulatory climate.
The exit of Omidyar Network coincided with a sharp decline in funding for Indian startups, which fell by 62% in 2023 to approximately Rs 66,908 crore—the lowest since 2018. Meanwhile, WeWork Inc. announced its complete withdrawal from India in April 2024, selling its entire 27% stake in its local operations amid financial struggles despite posting Rs 1300 crore in revenue the previous fiscal year. Potential buyers of its stake include the Enam family group, A91 Partners, and Mithun Sacheti, founder of CaratLane.
Tax policies also impact the gambling sector heavily. Since October last year, India imposed a 28% GST on online gambling, casinos, and horse racing, prompting companies like Super Group and Bet365 to exit the market. Gambling operators have challenged the government legally to reduce the tax to 18%. Ravindra Shinde, CEO of Dyutabhumi Hotel and Resorts, criticizes the tax rate as disproportionately high compared to other countries. Parimatch maintains that India’s business environment is inhospitable for foreign gambling companies, making market entry and operations extremely difficult. Notably, Parimatch has yet to officially enter the market and has already faced issues with counterfeit versions of its brand circulating locally.
Chinese companies also face hurdles in India. The government rejected BYD’s $1 billion plant proposal, and in December 2023, Indian law enforcement arrested three senior executives from Chinese mobile firm Vivo on money laundering charges. These actions reflect India’s strategic tightening of control over Chinese enterprises as part of its broader geopolitical efforts to protect national interests and counter China’s influence in the Indo-Pacific region.
As a result, many international investors, including Parimatch, are encountering increasing difficulties investing in India. The combination of regulatory barriers, geopolitical tensions, and an unfriendly business environment continues to complicate efforts by companies seeking growth opportunities in the country.
