From wooing NRIs back to ease of biz: What Indian startups want from PM Modi's Silicon Valley visit
The government hasn’t done much, beyond posturing, say venture capitalists.
The expectations from prime minister Narendra Modi’s impending visit to Silicon Valley and meeting the big guns of business for tete-e-tete is gaining a lot of traction in India given the government's promise to create an ecosystem that encourages entrepreneurs.
Among the steps that the government has taken are setting up of a Rs 10,000 crore start-up fund and a new campaign, 'Start up India, Stand up India', which seeks to promote bank financing for the underprivileged. The aim is to encourage them to participate in the start-up revolution that has caught the imagination of people from remote areas in the country.
As Indian entrepreneurs are looking keenly at the PM's meeting with the top honchos of Google and Facebook, among others, Firstpost spoke to a few to guage their mood.
We mean business
PM Modi needs to convince Silicon Valley that we mean business, say start-up founders. "The current business climate in the country with fringe elements creating fear coupled with poor infrastructure can scare away any potential investor to India from Silicon Valley," caution analysts.
The start-up culture in India talks mostly of the IITs-IIMs and their contribution to the system, said an analyst. “But are the techies driving the start-up ecosystem in Silicon Valley? What stops that culture being replicated or promoted in India?” an analyst asks, adding it is time the government addressed the question.
Despite the financial instruments and ease of business the government has introduced, the hurdles are many and these can make businesses wary, especially to those from the Silicon Valley.
“Modi needs to understand what drives the start-up climate in the US. Why does it continues to thrive there,” says Paula Mariwalla, Managing Director, Seedfund. She suggests one of the ways of having a robust start-up ecosystem is by overhauling the country's education system to effect large-scale change and foster entrepreneurship. However, Mariwalla cautions that nothing much can be achieved if the fringe elements in the BJP continue to behave the way do. It will wreck the fragile start-up ecosystem here, she says. “Nobody from Silicon Valley would want to invest in India in such a scenario,” she says.
The government has delivered on some of its promises, though. Analysts give thumbs up for steps in the direction of facilitating entrepreneurship through initiatives like 'Make in India', 'Digital India' and 'M-SIPS'. These have already signalled to investors across the world that India is open to change.
The focus on improving India's ranking on 'Ease of doing Business' is also a welcome move that is bound to change the perception of investors - once the initiatives taken up begin to have an impact on the ground.
The change in the Companies Act, to allow loans from Directors family, is a shot in the arm for young start-ups scouring for funds, say some.
However, many of the promised incentives have been just that -- only promises. The government hasn’t done much, beyond posturing, say analysts.
A few CEOs voice their concern. Greg Moran, CEO and Co-Founder, Zoom Car, says, “It's still way too difficult to set up a company in India and that hasn't really changed all that much.” He finds registrations and tax highly draconian.
"We would like a promise from the government that it will make it easier for start-ups to operate in India," says Yogendra Vasupal, CEO and Co-Founder of Stayzilla, on his expectation from Modi's visit to the US.
Green technology is being promoted by the current government. However, the PM must encourage and enable ways for helping more green technology companies to be incubated out of India, says Sapan Jain, CEO and Co-Founder, Blubirch.
There is not much to look forward to from this visit of PM Modi to Silicon Valley, says Moran. He believes the PM will try and urge some NRIs in the Bay Area and NY to return to India. “VCs and PE firms from the US are already investing actively in India. So I don't think his visit will change much there. Collaboration is already ongoing, but perhaps there could be some additional funding at the government levels,” he said.
However, Vikram Vora, CEO and Co-Founder, Mydentist.com is optimistic about Modi’s capabilities of bringing business to India. “Wherever Modi has travelled to, he has brought back business to the country,” he says.
When it was pointed out that despite scores of government schemes for businesses, the oft-voiced complaint from aspiring businesses is that it is still difficult to start a business in India, Vora was of the opinion that it was a case of 'expectations' from the government.
He suggests that the business community should `wait for two years at least' before these schemes can benefit the community.
Here is what some from the industry want or expect from Modi's visit to Silicon Valley:
* Expect Modi to speak about the rapid emergence of India's start-up scene and some of our success stories like Ola, Flipkart, Zomato, etc.
* Attract more investments and funds for the start-up ecosystem in India
* Visit as many of the large US tech companies and successful start-ups and encourage them to come to invest in India instead of going to other Asian countries
* Encourage and enable ways to help more green technology companies to be incubated out of India and a rise in investment in this sector
* Make it easier for start-ups to operate in India. For that to happen, PM Modi should promise the passage of GST and bankruptcy law to help make investing in India safer rather than via intermediary countries. A tax sop for investors in startup would be a good first step
* Give an extension of tax moratoriums so that start-ups can build business (service tax and VAT should be excluded for 2 years)
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Madhya Pradesh Chief Minister Shivraj Singh Chouhan will also be present at the ceremony