We bring to you the latest edition of News Roundup: Indian Startup Stories Of The Week!
This week the union budget 2019 was presented in the parliament by Finance Minister Nirmala Sitharaman. The government announced startup-friendly measures including a much-awaited clarity on the issue of Angel Tax. Sitharaman said that to resolve the issue of Angel Tax, startups and investors who file requisite declarations will not be subjected to any kind of scrutiny in respect of valuation of share premium.
With the new budget, Sitharaman said that the inclusion of solar storage batteries and charging infrastructure in the FAME scheme will give a boost to manufacturing, which is needed for India to leapfrog and become a global hub for manufacturing of these vehicles. To read more on Union Budget 2019, click here.
Not only this, the annual economic survey for 2018-19, has called for an optimal tax policy for startups so that it can aid the innovative investments in the Indian economy. The survey noted that growth in the new economy cannot be fostered without an ecosystem that rewards innovation and entrepreneurship. Recognising the fact that startups and innovative ventures face significantly greater uncertainty than traditional ‘brick-and-mortar’ firms.”
The remaining week was filled with interesting developments surrounding global expansion of Ola, Flipkart seeking audit of its FDI rules and much more. Here’s a look at the important Indian startup news stories of the week.
Important Indian Startup News Stories Of The Week
Still Considering Rules For Epharmacies: Centre Tells Delhi HC
In a statement to the division bench of Chief Justice DN Patel and Justice C Hari Shankar, government’s standing counsel Kirtiman Singh said that steps have been taken to formulate the draft epharmacy rules and the process of consideration is on. It also granted more time to the Centre to file its response to the contempt plea. The matter will be heard next on September 24.
PM Modi’s International Agenda Includes Data Localisation And 5G
At the G20 Summit of member countries at Osaka, Japan, PM Modi has been talking to his global peers about 5G technology, trade, data localisation, terrorism and other host of other issues. A majority of G-20 countries signed off on the launch of “Osaka track”, an overarching framework promoting cross-border data flow with enhanced protections launched by Japanese PM Shinzo Abe. India continued its strict stance against such free flow of data with Indonesia and South Africa staying on its side.
Summon, Illegal Operations, And Cheating Charges On Companies
- The Department for Promotion of Industry and Internal Trade (DPIIT) had called online food aggregators such as Swiggy, Zomato, Uber Eats and Foodpanda for a meeting. The meeting is said to be summoned to discuss the complaints of brick-and-mortar restaurants, who have alleged online companies of heavy discounts and predatory pricing. DPIIT wants to discuss the mutual areas of interest between online and offline stakeholders and develop feasible solutions for equitable growth in the industry.
- The Delhi High Court Division Bench of Chief Justice DN Patel and Justice C Hari Shankar has issued notice to the Reserve Bank of India (RBI) and PayPal. A plea filed by economist Abhijit Mishra in the Delhi High Court has alleged that the operation of PayPal as a payment system in India is in contravention of Section 4(1) of the Payment and Settlement Systems Act, 2007 (2007 Act). Mishra has alleged that Paypal Payments Private Limited is not listed as an authorised operator as per the list of the ‘Payment System Operators’ published by the RBI on May 27, 2019. It is to be noted that this list shows the operators authorised by the RBI to set up and operate in India under the 2007 Act.
- Hrithik Roshan, who is also the brand ambassador for Curefit’s Cult.Fit, has been booked on the charge of cheating along with three officials of Cult.Fit, following a complaint by a subscriber alleging that ‘false promises’ were made in the company ads regarding services offered by the fitness centre. The complainant alleged that he was not given daily workout sessions at Cult.Fit fitness centre though he had paid the fee for “unlimited” classes. In a statement, Cult.Fit said it was cooperating with authorities “as per due process and evaluating remedial action”.
Ola’s International Expansion, Uber Plus And More
- Bengaluru-based cab-hailing unicorn Ola has received private hire vehicle (PHV) operator license to operate in London. This will enable the company to launch its operations in London by September. The company had first expanded to the United Kingdom (UK) in August 2018.
- The transport department has informed Ola and Uber that their carpooling services are not permissible under the present Karnataka Transport Act. Therefore, they have asked the companies to pull back the pooling services, effective immediately. The transport department is further planning to take a decision after consulting with the state government.
- Uber is now testing a rewards programme for its drivers in India. The programme, Uber Plus, is under a pilot phase for a select base of drivers across Delhi, Mumbai and Chandigarh. Under Uber Plus, the company is offering exclusive loyalty rewards programme to enable driver partners to ensure more savings and access to exciting rewards, as they continue to drive with Uber.
- The central government of India is planning to roll out an advisory for state governments to promote the use carpooling services, as initiated by ride-hailing companies such as Ola and Uber. The centre is said to believe that such practices are needed to curb air pollution and decongest Indian cities.
OYO Expands To Vietnam
Hospitality chain OYO Hotels & Homes has further expanded in Southeast Asia with its foray into Vietnam, with 90+ hotels across 6 major cities including Hanoi and the capital Ho Chi Minh. OYO plans to expand to over 10 cities in Vietnam by the end of 2020. The company has also committed an investment of $50 Mn over the next few years to transform the hospitality landscape in Vietnam, with an aim to create over 1,500 direct and indirect jobs to help the country along its economic trajectory.
Flipkart Ready For Audit Of FDI Rules And More
- Flipkart CEO Kalyan Krishnamurthy has said that the company is in full compliance with India’s FDI rules and is ready to face any audit to prove this. The Walmart-owned etailer is under scrutiny over the intermediary agreements in signed in March this year to side-step the ecommerce FDI rules. In a meeting commerce and industry minister Piyush Goyal asked Flipkart to prove its compliance with the latest FDI norms for online marketplaces, put into place earlier this year.
- Flipkart announced its plans to bring 50,000 medium and micro, small and medium enterprises (MSMEs) onto their platform by the end of 2019. The MSME connect will also help Flipkart to expand their presence in Tier-III cities and small towns. Flipkart claims to have around 100,000 MSME sellers on their platform already.
- The new ecommerce policy is reportedly expected to require ecommerce marketplaces such as Amazon, and Flipkart, to give proof that the product discounts are being offered by the online seller and not the ecommerce platform. The policy may reportedly even set a limit on the maximum discount that can be offered on a product.
TikTok Refutes Allegations Of Sharing User Data With China
Chinese video-making app TikTok refuted Congress MP Shashi Tharoor’s claims that the app was illegally sending data on Indian users to the Chinese government. Tharoor had alleged that there were reports to show that the Chinese government was receiving user data from the wholly state-owned Chinese telecom giant. TikTok issued a statement on Tuesday denying that these claims were true. “The privacy and security of our users is a top priority for TikTok, and we abide by local laws and regulations in the markets where we operate,” it said.
India And China: Here Are Some New Updates
- India plans to cut the reliance of local smartphone and electronics makers on power banks manufactured in China. The government is planning to establish a Centre of Excellence (CoE) for the design of power bank products near Noida in UP, thereby focussing on indigenous manufacturing and reducing the overall foreign exchange outflow.
- Chinese ecommerce platform Shein has shuttered operations partially and has begun refunding money to customers with pending orders. The major reason for the lull in sales and the delivery issues is the crackdown by Mumbai Customs, which coupled with anti-China sentiment among trade bodies in recent times in India has made things difficult for the likes of Shein or Club Factory.
Ease Of Doing Business Ranking, Startup Fund And More
- According to TeamLease Research, ecommerce companies and tech startups are reportedly ramping up their hiring this year, with supply chain and tech experts particularly in demand. The sector is projected to add at least 44K jobs in the first half of the fiscal year as companies seek to scale up their business. Compensation is also likely to go up due to the high demand for trained professionals.
- A new state-wise progress report released by the government about the schemes under Startup India has shown that while Maharashtra and Karnataka topped the lists in terms of numbers and funding, it is West Bengal which attracted the largest average funding tickets from the Centre’s 10K Cr Fund of Funds.
- India is eyeing a top-50 spot in World Bank’s Ease of Doing Business Report in 2019 after rising 23 places to hit the 77th spot in 2018. Government officials from departments such as the Jawaharlal Nehru Port Trust (JNPT) and the Ministry of Housing and Urban Affairs met representatives of the World Bank in May to cite 35 new reforms that have significantly reduced the time, costs and documentation involved in doing business over the last 12 months.
Fintech Startup May Get Subsidy For Deploying PoS, UPI And More
- Unified Payments Interface (UPI) has clocked in 754.54 Mn transactions in June 2019. According to the data released by National Payments Corporation of India (NPCI), in terms of value of the transactions, the improvement of last month has broke a sweat again reaching INR 146566.35 Cr in June 2019. Further, inter-bank electronic funds transfer system (IMPS) recorded 171.33 Mn transactions worth INR 1,73,019 Cr.
- The Reserve Bank of India (RBI) has decided to waive off all customer-facing fees and charges on transactions through Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) systems. The new rules go into effect from July 1. The biggest benefit of the decision are the lower fund transfer charges for bank customers, using internet banking or online payments for services.
- Fintech unicorn Paytm has denied media reports of it charging transaction fees from customers. Earlier today, the company was reported to start passing on the Merchant Discount Rate (MDR) to its consumers.Media report claimed that the digital payments company had been absorbing these charges till now and thus wasn’t making any profit on the payments made through the platform.
- Anand Shrivastav, chairman, Business Correspondent Federation of India shared with media that they have reached out to the Department of Financial Services (DFS) and the Reserve Bank of India. They are seeking to extend POS device-related subsidies in rural areas to fintech companies and non-bank organisations. It is to be noted that at present, only banks get federal money support for deploying POS devices in rural areas. The current mechanism utilises the INR 230 Cr Financial Inclusion Fund (FIF), which is managed by the National Bank for Agriculture and Rural Development (NABARD).
Other Indian Startup News Stories Of The Week
Droom Ready To Raise $250 Mn Ahead Of IPO in 2021
Automobile marketplace Droom has said it’s in the market to raise $250 Mn in a pre-IPO round. The company said it’s in talks with multiple institutional and strategic investors, as well as existing investors. Droom founder Sandeep Aggarwal said the company plans to get listed on Nasdaq in 2021 through its Singapore-based holding entity, and could also look at a possible Hong Kong stock exchange listing post the Nasdaq IPO.
WhatsApp Payments Launch And More
- Facebook-owned chat messaging service WhatsApp has resumed the beta test of the WhatsApp Payments services in India, with a select group of users. Caught in a long-standing tussle with the Indian government over data localisation and payments data sharing with Facebook, WhatsApp Payments services had been halted for over a year. However, it would seem the payments service is not available to all users just year, and only for the users who were part of the original beta test, along with a select group of new users.
- National Security Advisory Board (NSAB), security advisor for the Prime Minister’s office (PMO), has reached out to WhatsApp to help them fulfill Indian government’s demand for traceability of messages without disrupting its encryption service. Prof. V Kamakoti of IIT Madras, a member of NSAB, has explained the solution for which WhatsApp will need to provide the phone number of the sender of a message.
CCI Says Google May Have Leveraged Android Unfairly
The 14-page report, prepared by the Competition Commission of India (CCI) revealed that Google has been misusing its dominant position in India by reducing the ability of device manufacturers to choose alternate versions of the Android mobile operating system. Google’s restrictions on device manufacturers appeared to amount to ‘unfair conditions’ under Indian competition law.
Helo And ShareChat Roll Out Referral Bonuses
ByteDance-owned Helo and Bengaluru-based vernacular social and content platform ShareChat are now offering referral bonus to its users. We noticed that Helo is offering upto INR 31 to its users for referring friends or family. The interesting part is that the company has divided this amount over a week, ensuring user stickiness. Inc42 noted that ShareChat has started offering multiple options to earn through referrals. For starters, users can share links to their friends and earn INR 50 as well as a scratch card after three successful referrals.
Apple’s iPhone Shipments To India Drop
Apple’s iPhone shipments to India have dropped to 220K units in the first quarter of FY19, according to an Asian industry analytics firm Counterpoint. The research has estimated that total shipments could grow by three times in the next three months. However, the full year shipments were estimated between 1.5 Mn to 1.6 Mn, which is 10-17% less than that in 2018.
Centre May Soon Ban E-Cigarettes
India’s Ministry of Health is reportedly planning to ban the manufacturing, import and sale of ENDS or e-cigarettes in India. A drugs consultative committee is said to have concluded that e-cigarettes and other such devices would come under the Drugs and Cosmetics Act’s definition of ‘drug’ and thus, can be banned under Section 26 (A) of this Act.
Stay tuned for the next week’s edition of Indian Startup News Stories Of The Week!