Flipkart co-founder and former CEO Sachin Bansal probably came to IAMAI’s India Digital Summit knowing that he would be asked about his (and Ola founder Bhavish Agarwal’s) remarks seeking protectionism for Indian companies at the Carnegie India’s Global Technology Summit last year. Bansal had said then:
“I think what we need to do is what at some level China did: [tell foreign players that] we need your capital, but we don’t need your companies”…”Take the example of Brexit and (Donald) Trump… Jobs for Indians in places like the US and EU will come down and we need to be prepared for such a situation… We shouldn’t fashion a policy to be ideal according to what the West thinks. We should try and adopt a locally relevant standard”.
Agarwal, had been more forthright, saying ““China rightly identified consumer internet as important and moved to protect it, and we need to do the same in India”…
“China has usually followed the route of using foreign capital and expertise to come up with domestic companies, without letting foreign companies themselves come in.” (source: Quartz)
Even though Flipkart is a Singapore registered company, majority owned by non-Indian Venture Capitalists, and merely operates in India with Indian employees and management, it is still seen as an Indian company because the founders are Indian. Statements from Bansal and Agarwal have been supported by venture capitalists looking to protect their investments: Tarun Davda, whose fund Matrix Partners is an investor in Ola (read), and Kalari Capital’s Vani Kola, an investor in Snapdeal (here).
Yesterday, though, Bansal was singing a slightly different tune: “Not preferential treatment for Indian companies”, he “clarified”, “what I said was that there should be a level playing field. We need to think of Internet as a strategic sector. Today we think of steel as more strategic than the Internet. That’s a problem because services is more than 50% of GDP. India can play a very strong role, and we’re making a mistake of not thinking of Internet as a strategic sector.”
“We are building these products across the world anyway, and we have the capability to do it here. The local market is big enough to create the solutions. Indian companies can and they should build products which are world class, and take them globally. Zomato, Prato and Freshdesk are clear examples. We need to figure out how do we create a level playing field so our news, restaurant apps, or anything in the Internet space doesn’t get prematurely killed by a company coming from China. It shouldn’t just be about dollars, it should be about technology.”
This is, of course, besides the fact that, like Ola, Flipkart in the past also used its access capital to defeat competition.
“Competition is inevitable,” he added, later in the session. “India has taken a stance of being more global when it comes to the Internet. I believe that in any sector, there is an opportunity to build an independent business. We have make MakeMyTrip, Zomato, Naukri. There isn’t a necessity to side with one.”