Slashdot Mirror
India, the World's Second Largest Internet Market, Is Turning Its Back on Silicon Valley (venturebeat.com)
An anonymous reader shares a report: For years, India has wanted foreign companies to thrive in the country. When the Bharatiya Janata Party (BJP) took power in 2014, one of its early major pushes was to formulate plans and structure incentives to attract foreign investment. In 2015, Prime Minister Narendra Modi unveiled plans to liberalize the foreign investment rules. He also visited the U.S. and met with top Silicon Valley executives, nearly all of whom subsequently expanded their commitments in India. It further introduced lofty incentives to encourage companies to participate in Make in India and Digital India, a set of state-run initiatives to drive job growth in the nation.
[...] But over the past year, in the run-up to the general elections in May, the Indian government has unveiled -- and in many cases, enforced -- a wave of sweeping changes. It now dictates how foreign companies handle and make use of Indian user data and other aspects of how ecommerce platforms operate, and it is working on introducing greater oversight for technology platforms. [...] Lobby groups that represent U.S. companies and industry watchers say they see an extreme shift from the "warm, welcoming, collaborative" approach the government exhibited in 2014. "In the past year or so, the engagement has been combative, with abrupt, disruptive policy changes that are being held without consultation, and, unusually, with absolutely no room for negotiation or even deadline extensions -- as we saw with data localisation and FDI in ecommerce," Prasanto K Roy, a technology and policy analyst, told VentureBeat. The story also looks at how much revenue Silicon Valley companies that count India as one of their biggest markets is generating there. Spoiler alert: it's very little.
[...] But over the past year, in the run-up to the general elections in May, the Indian government has unveiled -- and in many cases, enforced -- a wave of sweeping changes. It now dictates how foreign companies handle and make use of Indian user data and other aspects of how ecommerce platforms operate, and it is working on introducing greater oversight for technology platforms. [...] Lobby groups that represent U.S. companies and industry watchers say they see an extreme shift from the "warm, welcoming, collaborative" approach the government exhibited in 2014. "In the past year or so, the engagement has been combative, with abrupt, disruptive policy changes that are being held without consultation, and, unusually, with absolutely no room for negotiation or even deadline extensions -- as we saw with data localisation and FDI in ecommerce," Prasanto K Roy, a technology and policy analyst, told VentureBeat. The story also looks at how much revenue Silicon Valley companies that count India as one of their biggest markets is generating there. Spoiler alert: it's very little.
Facebook and the likes have amassed a lot of power. An open market is a fair practice, but it is incredibly important that every country tries to build their own ecosystem of tech companies. It's unfathomable to imagine five U.S. companies dominating in most markets.
So, Europe imposes user protection and they are progressive champions of the people, but India imposes user protection and they are a backwards second world nation who doesn't know how to operate in the global economy, is that it?
It's about money. More specifically, it's about money flowing (or not flowing) into the pockets of the politicians.
It is more than that. India has a deep anti-business culture and a knee jerk mistrust of foreign companies. This is worse in eastern India. Good luck getting anything done in Bengal. But even in western cities like Mumbai, or Tamil areas like Chennai, there is roadblock after roadblock.
Even the political corruption is dysfunctional. In China, you can use the guanxi system to bribe one bureaucrat, and then they will clear the path for your project. But in India, the bribee will just take your money and step aside to let you deal with the next guy with his hand out. They feel no obligation to help you or champion your project.
30 years ago, China and India were about even on GDP per capita. Today, China is ahead by a factor of four. There are reasons for that.
If you need manufacturing expertise, go to China. If you need cheap labor, go to Bangladesh. If you need English speakers for your call center, the Philippines is welcoming. India has no competitive advantage in any of these areas.
Corruption happens primarily in secret and between the most powerful and wealthy.
Actually, most corruption in America happens openly and is completely legal. There are essentially no legal limits on how much money lobbyists and special interest groups can funnel to a politician, nor is there much incentive for the politician to refuse their offers.