Some of the biggest names in the Indian start-up sector have teamed up together to launch an industry body to represent and lobby for the interests of local venture and seek policy support from the government, says a recent news report. Flipkart, Ola, MakeMyTrip and Quikr are some of the names that are the founding members of this lobby group called Indiatech.org.
The move is expected to give Indian companies an edge over the well-funded international rivals, as they will advocate for and “persuade the government that homegrown start-ups should dominate the local Internet ecosystem.” Sachin Bansal, co-founder of Flipkart, leading the group as the founding president and chairman, will appoint a former IAS officer as the CEO of the group in the coming weeks. Bansal has been reportedly leading the process of setting up the group for over a year now, says the report.
What purpose will the group serve?
The report cites two people directly involved in the development of the group, “The group wants to become the Nasscom for the startup space... The main thrust of the lobby group will be to persuade the government that homegrown start-ups should dominate the local Internet ecosystem.” The development indicates that Indian start-ups are going all out for an aggressive display of strength in their long-ignored demand for policy support. However, the report is quick to add, “Apart from lobbying against overseas competition, the group's charter also includes issues like job creation, skills training and providing resources to scale up Internet businesses.”
The new group will set itself apart from the existing lobbying organisations, like Nasscom and their subsidiaries like Internet, Mobile and Ecommerce Council (NIMEC) and the IAMAI (Internet & Mobile Association of India), as these organisations have substantial international representation from Google, Amazon and Facebook. “The creation of Indiatech.org provides a cohesive voice and structured platform to local players.”
Who is invited to the party?
While Flipkart and Ola have long been vocal about creating a level playing field for Indian players, other confirmed companies that will be a part of the non-profit group with different layers of membership, are MakeMyTrip, Quikr and Hike. Together, the five companies are expected to be part of the group’s executive committee. There is no word on whether biggies like Paytm, Shop-Clues, and Zomato will also join the group. Furthermore, investors with large funds at their disposal, like SoftBank, Tiger Global Management, Steadview Capital, Accel India and Matrix Partners India have been invited to join as well. There is no certainty if the mentioned investors will join the group or not.
The group wants to prevent the loss of $10 billion of Foreign Direct Investment, $1 billion of tax revenues, and a million jobs in the scenario wherein Indian companies do not succeed. These estimates, based on the trajectory of Chinese internet economy, however, might not go very well with the Indian government. While the demand for policy support has recurred over the years from local players, top bureaucrats and leaders, even the government has opined that there no clarity on what is expected from the government in terms of specific measures, the report says.
The launch of the lobby group might as well be the booster shot that the Indian start-up sector needed, and will help Indian players to protect their interests from their mighty international rivals. Things just got really interesting in the sector, as it will be an exciting journey from here on – seeing how the government supports the demands raised, how the competition reacts and who ultimately ends up with an edge.