In 2024, the Indian market witnesses the exit of major investors such as Omidyar Network and American firm WeWork Inc., while international gambling company Parimatch continues to face significant barriers to investment in the country. These developments follow the footsteps of industry giants like Disney, General Motors, Vodafone Group, and BYD, all of whom have encountered challenges in India’s complex business environment.
Omidyar Network Halts Investments in India
The announcement by Omidyar Network to cease all new investments in India by 2024 took many by surprise. Having already invested over $600 million in prominent Indian startups including e-pharmacy 1MG, edtech platform Vedantu, and fintech firms Kaleidofin, Kiwi, M2P Fintech, and Indifi, Omidyar cited “significant changes in the economic and regulatory landscape” as reasons for its withdrawal. Reports suggest that increasing restrictions on foreign investments are prompting such decisions. Similarly, Parimatch faces ongoing challenges that have forced it to delay plans to enter and invest in the Indian market.
Declining Capital for Indian Startups
Omidyar Network’s exit coincides with a sharp decline in startup funding across India. In 2023, investments dropped by 62%, reaching approximately Rs 66,908 crore—down from Rs 180,000 crore in 2022. This marks the lowest funding levels since 2018, indicating a tightening financial environment for emerging companies.
WeWork’s Complete Withdrawal
In April 2024, WeWork Inc. publicly announced its full exit from India by selling its entire 27% stake in its local operations. Despite generating revenues of Rs 1300 crore in fiscal year 2023, WeWork filed for bankruptcy. Potential buyers include the Enam family group, investment firm A91 Partners, and Mithun Sacheti, founder of CaratLane.
High Tax Burdens Impacting Gambling Sector
Since October last year, India has imposed a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing. This steep tax led to companies like Super Group and Bet365 exiting the market. Gambling operators, including Parimatch, have legally challenged the government, advocating for a reduced tax rate of 18%. Industry leaders argue that India’s tax policies are disproportionately high compared to other countries, creating a difficult business environment for foreign companies. Notably, Parimatch has never officially launched in India but has had to deal with counterfeit versions of its brand circulating in the market.
Challenges for Chinese Investors
India’s investment challenges are not limited to Western companies. For example, the Indian government rejected a $1 billion manufacturing plant proposal by Chinese electric vehicle maker BYD. In late 2023, Indian authorities arrested three senior executives of Chinese mobile company Vivo on money laundering charges. These actions reflect India’s increasing regulatory scrutiny of Chinese firms amid geopolitical tensions.
Root Causes of Investment Barriers
India’s tougher stance on foreign investments, especially from China, is part of a broader geopolitical strategy to safeguard national interests and align with the U.S.-led Indo-Pacific initiative to counter China’s influence. As a result, many international companies, including Parimatch, face mounting difficulties navigating India’s complex regulatory landscape and geopolitical risks when attempting to invest.
Parimatch continues to monitor these significant challenges in the Indian market as it evaluates its global investment strategy amid evolving economic and regulatory constraints.