Some of the recent moves by the Indian Government & its associated Institutions are hurting Indian Startups real bad.
Here’s how –
1. No Automatic Online Payments, thanks to ‘3D Secure’- RBI says, “We will not allow businesses to charge credit cards automatically, even if the credit card holder authorizes such a permission. Each time a transaction is done, a manual intervention by the card holder is necessary.” This is DUMB. This prevents companies from billing a customer on regular intervals automatically. This is inconvenient for the users and kills SaaS companies.
2. Lets kill Mobile payments as well – If the first one was not bad enough. The government felt that the best way to promote ‘Mobile e-commerce’ was to implementation of ‘OTP or One Time Password’ for mobile payments. Cleartrip recently talked about this yet another suicidal decision of the government to promote commerce on mobile here.
3. RBI’s (Pay) pal – Repercussion of the first point killed Pay Pal in India. If you are unaware of this major development, read more about the problem here. Here is also a petition started to appeal against this move : http://ieoi.in/
4. TRAI’s NCPR black magic – The new regulations were intended to stop unsolicited calls & smses are a nightmare for Indian startups which offer mobile value added services. The government provides you 3 options – either allow spam, register with NDNC (National Do Not Call Registry) to avoid all spam or register for spam from a particular category only. Here are few opinions on the same – NCPR – Boon or Bust for SMS Pull Services
As illustrated above, over the past few months the governments policies are getting more and more restrictive and are affecting startups. I got really pissed when I came across few entrepreneurs who are giving serious thought to moving their successful startups / businesses out of India to take up one of the better options provided below.
While most the countries today are attracting entrepreneurs, the Indian government is least bothered. Here are a few countries being considered :
1. Chile – “In 2010, the program brought 23 teams from all corners of the world, providing them a $40,000 subsidy (no equity) to take part for six months, and a temporary 1-year visa to develop their projects along with access to the most potent social and capital networks in the country.” – http://www.startupchile.org/
2. US – “Under the proposed legislation, instead of the visa going to an investor, a startup company founder or entrepreneur who receives a minimum equity investment of $250,000 could qualify as an EB-5 visa recipient. At least $100,000 would have to come from a sponsoring US investing entity. Overall we hope to make it easier for more entrepreneurs to start businesses in the US and create jobs.” – http://www.startupvisa.com/
3. Singapore – Heard it takes just one credit card and 30 minutes on the internet to start a company in Singapore.
We were lucky to have the IT revolution in India, which has got us to this point. We might not be as lucky with the ‘Startup’ revolution which we see rising in India today.
Disclaimer : I am founder of a tech company (Practo) and my views are inclined to the hardships faced by the tech startups in India.