We bring you the latest edition of News Roundup For The Week!
In one of the biggest news this week, the Indian government is mulling amendments to the Information Technology (IT) Act, 2000, to increase the penalty for apps and websites failing to control the fake news and child pornography. The government said it may go as far as shutting down of the apps and websites if they fail to comply with IT Law.
Another big news this week came with government’s digital payments system, Unified Payments Interface (UPI), recording more than 620 Mn transactions in December, for a value of INR 1.02 Lakh Cr ($14.73 Bn). This took the total number of digital payment transactions on the UPI platform in the year to 3 Bn.
Here’s a look at the other important developments for the week.
Important Indian Startup News Stories Of The Week
Financial Performances: Hits And The Misses Of FY18
- Global digital payments player PayPal reaped rich rewards in India and reported a growth of more than 11X in its revenue from PayPal India with a revenue of $36.9 Mn (INR 260 Cr) in FY18. The net profit for FY18 was $283.9K (INR 2 Cr), as against $198.7K (INR 1.4 Cr) in the previous year.
- Global cab hailing company Uber reported an increase of 19.67X in revenue from its India business — Uber India Technology — reaching $3.05 Mn (INR 21.5 Cr) in the fiscal year ending March 2018. The company noted a 512% rise in its net profit for FY18, reaching $27,854 (INR 19.6 Lakh).
- Urban Ladder Home Decor Solutions Private Ltd-owned online platform for home furnishings, Urban Ladder, reported revenue of $21.68 Mn (INR 151 Cr), a jump of 202% in FY18. The company has reported a loss of $17 Mn (INR 118.66 Cr), down 74% against $65.8 Mn (INR 457.9 Cr) in the previous year.
- Bengaluru-based Zoomcar’s loss widened by 10.2% in the year ended in March 2018 as compared to FY17 due to increasing costs of doing business. Meanwhile, the annual revenue rose to $22.47 Mn (INR 15.7 Cr ) from $17.17 Mn (INR 12 Cr) in the previous year.
Handset Makers Find Electronic Policy Draft Inadequate
In a letter to IT secretary Ajay Prakash Sawhney, Indian Cellular and Electronics Association (ICEA) demanded special incentives to help develop the country as an electronics manufacturing hub. The association also stated that global companies such as Apple, Samsung, LG, Oppo, Vivo, Huawei and Foxconn will need a special plan and outreach. This requirement has to be identified in the draft policy.
Swiggy, Zomato Face Ire Of Small Business Owners
In an online petition to the Competition Commission of India (CCI) and the Prime Minister’s Office (PMO), nearly 500 small to mid-sized restaurants alleged “misuse of dominant position by food delivery companies, including Swiggy, Zomato, UberEATS and Foodpanda.” The petition accused the foodtech companies of using deep discounting, in-house kitchens and internal sourcing to take away their business.
FHRAI Seeks Intervention Of Tourism Ministry Against Online Booking Sites
FHRAI said that after a month of failed attempts to amicably resolve the issues, it has written to the minister outlining the major issues of concern to the industry because of unfair and arbitrary business practices by online travel agents (OTAs). It claimed that a number of FHRAI’s members are experiencing hardships due to the OTAs’ business ethics, which it claims are “exploitative, unethical and divisive, leading to predatory pricing and other market distortions.”
RBI Lifts Ban On Paytm Payments Bank
The Paytm payments bank intended to start KYC (Know Your Customer) formalities for its wallets as well as its bank accounts from December 31. No fine has been levied on Paytm Payments Bank by RBI, as stated by a company spokesperson in a media statement.
Madras HC Stays Ban On Online Sale Of Medicines
The order was passed on January 2 by the High Court’s division bench, comprising Justice M Satyanarayanan and Justice P Rajamanickam. The bench had earlier provided temporary relief to epharmacies by suspending the single judge order and has now given its final order in the matter. However, media reports said that the single judge’s direction to the central government to notify the epharmacy rules before January 31 remains in force.
RBI Hopes For Break Even Of Payments Banks
In a recently released report by the RBI entitled ‘Trend And Progress Of Banking In India 2017-18’, the central bank noted that the consolidated balance sheet of payments banks showed net losses during 2016-17 and 2017-18. The losses of payments banks are attributed to high operating expenses as large capital expenditures had to be incurred in setting up initial infrastructure.
Govt Mulls Fine For Companies Failing To Comply With Aadhaar Act
The central government is reportedly considering introducing a civil penalty of INR 1 Cr ($142.9K) on companies that fail to comply with the provisions of the Aadhaar Act. It is also mulling a fine of INR 10 Lakh ($14.2K) per day in case of continued non-compliance. The Centre is also planning to set up a UIDAI fund under the Aadhaar Act. It has also proposed to exempt the authority body from any taxes on income.
Sachin Bansal Pays $100.3 Mn Advance Tax For Flipkart Exit Earnings
The amount includes his capital gains tax from selling his stake sale in homegrown ecommerce company Flipkart. After Walmart’s acquisition of a 77% stake in Flipkart in 2018, Sachin had exited the company, earning around $1 Bn (INR 6,955 Cr) from his 5.5% stake in Flipkart. However, cofounder Binny Bansal has not disclosed his capital gains from his recent exit as of yet.
Govt Looks To Limit Imported Gifts To INR 5,000 Per Aadhaar Number
The government is looking to keep a tab on the purchase of goods from foreign ecommerce companies, especially those from China. A complete ban on such imports was also considered but the Department Of Industrial Policy & Promotion (DIPP) has suggested limiting such imports to four per person in a year. Also, the INR 5,000 ($71.5) limit can be used via any know-your-customer (KYC) route and not only by the Aadhaar number.
Ecommerce FDI Policy Circular: Amazon, Flipkart Look For Extension And More
- The US-India Strategic Partnership Forum (USISPF) said that the new ecommerce rules being discussed by the Department of Industrial Policy and Promotion (DIPP) are regressive and that they could potentially harm the consumers.
- Flipkart said that government policy changes will have long-term implications for the evolution of the promising sector and the whole ecosystem. While Amazon reiterated commitment to India saying they have always operated in compliance with the laws of the land and are evaluating the new guidelines to engage as necessary with the government to gain clarity.
- Department of Industrial Policy and Promotion (DIPP) has clarified that through the changes announced last month the government has only reiterated its earlier policy provisions to ensure better implementation of the policy in letter and spirit. At the same time, Flipkart and Amazon may look to change their operational process and seek an extension February 1, 2019 deadline.
Other Indian Startup News Stories Of The Week
Picostone Expands To Gujarat
Home automation startup Picostone Technology has forayed into Gujarat with a range of products that will allow people to have remote control of all home devices. The startup is focussing on six cities Ahmedabad, Baroda, Gandhinagar, Botad, Rajkot and Surat in Gujarat to begin with and has signed up with Gujarat’s leading distributor in aiding their expansion plan and promoting their products reach across individual end users across Gujarat.
OYO Launches OYO Assist
Hospitality chain OYO introduced OYO Assist, an in-application support platform, with self-serve flows that offers features ranging from booking modification to enquiry on OYO hotel policies to claims for refunds on bookings, all at the touch of a button. It will give customers a seamless and customized stay by transforming the hotel’s digital ecosystem into a personal hotel assistant with the ability to fulfil requests for services, and answer queries on hotel policies, cancellation, and modify bookings, thus providing transparency in access to issues raised, support issues registered and more.
FlexiLoans Partners With Amazon For Stronger API Integration
MSME-focused digital lending platform FlexiLoans extended its partnership with Amazon.in by offering exclusive and customised deals in the festive season of Oct-Dec quarter to cater the working capital need of the e-commerce sellers. Both companies are working on achieving deep technology integrations to make lending offers real-time and create an enigmatic customer experience.
Stay tuned for the next week edition of News Roundup: Indian Startup News Stories Of The Week!