Prime Minister > Narendra Modi’s team has reached out to Indian start-ups in the Silicon Valley while trying to convince them that their long-standing demands over ease of doing business will be met.
The start-ups, on the other hand, want a quick implementation of the proposals.
Industry sources tell The Hindu that at a meeting with top Indian entrepreneurs and investors in the Silicon Valley, Amitabh Kant, Secretary, Department of Industrial Policy and Promotion, spoke about proposals that could make it easy for start-ups to do business in India.
Tax write-offs His proposals, they said, were about tax write-offs, relaxation of rules for venture capital flow and rules that make it easy for start-ups to shut down.
Exodus of start-ups from India
Prime Minister Narendra Modi’s team, which reached out to Indian start-ups in the Silicon Valley, told them that the government proposed to streamline the patent process online to make it more convenient. The idea was to create a large library of patents originating from India and fund 500 lawyers to make it free for anyone to file the patent.
According to industry sources, at a meeting with top Indian entrepreneurs and investors in the Silicon Valley, Amitabh Kant, Secretary, Department of Industrial Policy and Promotion, spoke about proposals that could make it easy for start-ups to do business in India.
“All these proposals are good. Forming a company is very difficult in the country. Also about 80 per cent of the start-ups wind up their operations. We have to make it easier for them to shut down,” said T.V. Mohandas Pai, former Infosys director and an adviser to iSpirit.
Fund incubators needed
“They [the government] should also set up and fund incubators at 500 universities and colleges,” said Mr. Pai, who is also chairman of Manipal Global Education Services. Last year, 54 per cent of the funded tech start-ups domiciled themselves out of India to Singapore and the United States because of better regulatory environment there. It was estimated that the figure would go up to 75 % this year, according to iSpirt.
The situation is seen as alarming. “Preliminary numbers indicate that this is indeed the case. Exodus of tech start-ups is gathering momentum,” said Sudhir Sethi, managing partner, venture capital firm IDG Ventures and head of the iSpirt List-in-India Policy Expert Team. “The situation is serious and good intentions must translate into quick action,” he said.
Nine of the top 30 business-to-business software product companies by market capitalisation have already relocated to the U.S., Singapore and the U.K. These 30 companies are worth $10 billion (Rs. 66,110 crore), employing 21,000 people, according iSpirt’s software product index, which tracks the growth of the industry.
The delegation that represented the Indian start-ups at the event included R. Chandrashekhar, president, Nasscom; B.V.R. Mohan Reddy, chairman, Nasscom; and Raju Reddy, founder of tech firm Sierra Atlantic. Kanwal Rekhi, managing director of Inventus Capital, Venktesh Shukla, president of TiE, and Manu Rekhi, partner at Inventus, were also present.
Silicon Valley has earned its reputation as the global tech Mecca with 14,000-19,000 start-ups and 1.7-2.2 million high-tech workers, according to the Global Startup Ecosystem Ranking by the U.S.-based research firm Compass.