Asia Society conference in Silicon Valley holds mirror to India’s policy challenges

Ritu Jha-

Images of Indian Prime Minister Narendra Modi and United States President Joe Biden seemed like an apt backdrop for Tanvi Madan’s keynote at the conference on US-India relations as part of the Asia Society of Northern California’s Naren Gupta Legacy Series this past June.

The director of the India Project at Brookings Institution explained how the relationship sits atop at least five pillars, and an important one being security cooperation between the two countries. The other pillars, she said, are Economic, Global Order, People-to-People and Democratic values.

The half-day conference was organized in Mountain View, CA, and was attended by both venture capitalists and entrepreneurs. Speakers included Barry Taylor, Partner at Wilson Sonsini Goodrich & Rosati; Anita Manwani, Founder and CEO, Carobar Business Solutions and President-Elect, TiE Silicon Valley; Priya Rajan, Managing Director, Silicon Valley Bank; Satya Bajpai, Managing Director Technology M&A JMP Securities; Kumar Ganapathy, CEO, Akridata; Venktesh Shukla, Founder & Managing Partner Monta Vista Capital; M.R. Rangaswami, Founder and Chairman, Indiaspora; Jishnu Bhattacharjee, Managing Director, Nexus Venture Partners; Sumir Chadha, Co-Founder and Managing Director, WestBridge Capital; and Nikhil Pahwa, Founder and Editor of MediaNama.

Bhattacharjee’s main mantra was how Indian start-ups should think global from their inception, while Chadha spoke about investing in over 15 SaaS (Software as a Service) companies in India.

Rajan of Silicon Valley Bank was positive enough about start-ups and even the government for its policy support. She said, “I think India has achieved market maturity with respect to both founders and VCs.”

Speaking to indica, she elaborated on India reaching the 100 unicorns’ milestone and Freshworks, the first Indian SaaS firm to go public in the United States. “These 100 unicorns could be anywhere at NASDAQ or Dow Jones, and this is a pivotal moment to show we’ve arrived,” she said. “Indian SaaS companies need to think global from Day One. Because, if you are able to capture the global market, it is easier to sell in the Indian market.”

She added, “The last five years have been a game-changer. We have seen a hockey stick growth char, and India has become an investable opportunity for global investors. India attracted around $36 billion VC investment in 2021. Therefore, the pace of growth is not only amazing, it was beyond our high expectations. It continues to grow around the world, too, not just in India.”

Rajan is worried about the recession fears, though. “It will have an impact in India, but not as much as here in the U.S.”

Bajpai of JMP Securities, Shukla of Monta Vista Capital and Rangaswami of Indiaspora discussed the rise of the start-up ecosystem in India, why these entrepreneurs move to Silicon Valley and how cross-border investment challenges are forcing companies to incorporate in Delaware and Singapore.

Bajpai told indica, “People are the most important assets of India. That is where the government needs to spend the money. You cannot change bureaucracy quickly, but you can make it easier to start and run companies. It is already happening, but we should make it happen much faster.”

He added, “India’s biggest export is its intellectual power. That is where government should focus on the most.”

Venktesh said India has to look at foreign exchange regulations and the challenges of ease of doing business. “If you are, headquartered in India, and you have subsidiaries all over the world, the movement of money is incredibly complicated because of federal regulations,” he said. “If you want more money, you have to be incorporated outside of India.”

Pahwa of MediaNama gave the closing keynote on the evolution of digital business and policy in India. A journalist who has covered India’s technology policy for over 16 years, Pahwa spoke on investments, IPOs, finance technology and digital policy from India, and how even companies are moving out of the country. He painted a grim picture of the real challenges industries are facing in India, and gave the example of Twitter filing a lawsuit against the Indian government.

Pahwa spoke about India’s digitization program, too. “There’s a challenge, as Indian government regulations create a disruption in business, and not necessarily a positive one. While e-commerce draft regulations are waiting for confirmation, three months ago, we got new cyber security regulations that mandated that every company should have an officer responsible for cyber security and there is criminal liability for violation of rules. “Cyber security incidents are to be reported within six hours. “This is ridiculous since sometimes it takes over six hours to figure out whether it was a cyber security incident or not.”

He said over-regulation of Indian start-ups is creating huge uncertainty. “Policy-making itself is happening with a start-up mindset,” he said, “roll it out and then iterate later. That creates tremendous uncertainty. In the last two and a half years, we have seen regulations come up without any consultation or warning. This top-down approach of policy-making is creating an environment of uncertainty in India.”

Pahwa said that many start-ups, especially in the cryptocurrency sector, are looking to shift their operations to Dubai because India is no longer viable. “There’s increased regulation in every sector – online pharmacies, e-commerce, all intermediaries and, online news,” he added.

[Photo courtesy: Asia]