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Businesses The Almighty Buck United States Technology

India, the World's Second Largest Internet Market, Is Turning Its Back on Silicon Valley (venturebeat.com) 164

Posted by msmash from the closer-look dept.
An anonymous reader shares a report: For years, India has wanted foreign companies to thrive in the country. When the Bharatiya Janata Party (BJP) took power in 2014, one of its early major pushes was to formulate plans and structure incentives to attract foreign investment. In 2015, Prime Minister Narendra Modi unveiled plans to liberalize the foreign investment rules. He also visited the U.S. and met with top Silicon Valley executives, nearly all of whom subsequently expanded their commitments in India. It further introduced lofty incentives to encourage companies to participate in Make in India and Digital India, a set of state-run initiatives to drive job growth in the nation.

[...] But over the past year, in the run-up to the general elections in May, the Indian government has unveiled -- and in many cases, enforced -- a wave of sweeping changes. It now dictates how foreign companies handle and make use of Indian user data and other aspects of how ecommerce platforms operate, and it is working on introducing greater oversight for technology platforms. [...] Lobby groups that represent U.S. companies and industry watchers say they see an extreme shift from the "warm, welcoming, collaborative" approach the government exhibited in 2014. "In the past year or so, the engagement has been combative, with abrupt, disruptive policy changes that are being held without consultation, and, unusually, with absolutely no room for negotiation or even deadline extensions -- as we saw with data localisation and FDI in ecommerce," Prasanto K Roy, a technology and policy analyst, told VentureBeat. The story also looks at how much revenue Silicon Valley companies that count India as one of their biggest markets is generating there. Spoiler alert: it's very little.
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India, the World's Second Largest Internet Market, Is Turning Its Back on Silicon Valley More

India, the World's Second Largest Internet Market, Is Turning Its Back on Silicon Valley

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  • Blame Facebook and Google (Score:5, Informative)

    by Kohath ( 38547 ) on Sunday February 17, 2019 @11:14AM (#58135094)

    A couple bad actors ruin the trust for everyone.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      It's about money. More specifically, it's about money flowing (or not flowing) into the pockets of the politicians.

      • Re:Blame Facebook and Google (Score:5, Insightful)

        by ShanghaiBill ( 739463 ) on Sunday February 17, 2019 @12:27PM (#58135442)

        It's about money. More specifically, it's about money flowing (or not flowing) into the pockets of the politicians.

        It is more than that. India has a deep anti-business culture and a knee jerk mistrust of foreign companies. This is worse in eastern India. Good luck getting anything done in Bengal. But even in western cities like Mumbai, or Tamil areas like Chennai, there is roadblock after roadblock.

        Even the political corruption is dysfunctional. In China, you can use the guanxi system to bribe one bureaucrat, and then they will clear the path for your project. But in India, the bribee will just take your money and step aside to let you deal with the next guy with his hand out. They feel no obligation to help you or champion your project.

        30 years ago, China and India were about even on GDP per capita. Today, China is ahead by a factor of four. There are reasons for that.

        If you need manufacturing expertise, go to China. If you need cheap labor, go to Bangladesh. If you need English speakers for your call center, the Philippines is welcoming. India has no competitive advantage in any of these areas.

        • Comment removed based on user account deletion

          • Smart. If you don't want outside entities are eroding your country's autonomy

            44% of Indian children are malnourished. 72% of Indian infants are anemic.

            So not so "smart".

            Malnutrition in India [wikipedia.org]

            In China, the number of malnourished children is negligible. They are welcoming to foreign investment, and have done it without "eroding the country's autonomy".

            30 years ago, China and India chose dramatically different paths. It is now obvious which turned the wrong direction. Economic isolation doesn't work.

            • Re: Blame Facebook and Google (Score:4, Insightful)

              by Spamalope ( 91802 ) on Sunday February 17, 2019 @03:53PM (#58136330)

              In China, the number of malnourished children is negligible.

              Suuure. And the Tiananmen Square protests ended peacefully.

              The same was true under Mao. Eventually. After the mass starvation and 50+ million dead there were indeed far fewer malnourished people.

              • China booms despite Mao (Score:5, Interesting)

                by aberglas ( 991072 ) on Sunday February 17, 2019 @06:50PM (#58137102)

                You made the amazing point.

                Mao destroyed China. First the Great Famine. Then the Cultural Revolution removing the intelligencia. 1976 China was impoverished of both money and culture and any quality of life. India was democratic, free, and its economy growing due to the green revolution.

                Then Mao dies, the Deng Xiaoping revolution happens and China takes off. From a base of nothing, to what it is today. Truly amazing.

                There is something deeply ingrained in Chinese culture that Mao could not kill and India does not have to make money. And as a result, despite the authoritarian issues that we find repulsive, the average poor Chinese lives much better than the average poor Indian.

                The future may not be so bright for China. Xi Jinping's counter-reformation cannot be good for Chinese business in the longer term. And certainly not if they take on an aggressive foreign policy, in which case he could take down the entire world.

                But for now, something about China is much, much more effective than the way things are done in India.

                • Re: (Score:1)

                  by Anonymous Coward

                  Except the CR did more than "remove" intelligencia. It actually helped educate the masses to make them more literate, gave equal rights to females, etc. CR did a lot of damage in certain areas, but it also helped in others. There's many who say that what happened in the 1980s-90s in China could not occur without equaling of rights that CR did.

              • Re: (Score:2)

                by AmiMoJo ( 196126 )

                Who are you doubting here? The foreigners who observe China, who live and work there, the western charities that operate there? Because they are the ones saying that China has dealt quite effectively with malnutrition, not the Chinese government.

            • 44% of Indian children are malnourished. 72% of Indian infants are anemic.

              And the solution is "let them eat iPhones"?

        • The username is legit

        • Re:Blame Facebook and Google (Score:4, Informative)

          by arglebargle_xiv ( 2212710 ) on Monday February 18, 2019 @01:16AM (#58138148)

          Lobby groups that represent U.S. companies and industry watchers say they see an extreme shift from the "warm, welcoming, collaborative" approach the government exhibited in 2014. "In the past year or so, the engagement has been combative, with abrupt, disruptive policy changes that are being held without consultation, and, unusually, with absolutely no room for negotiation or even deadline extensions

          Translation: India went from bent over and ready to take any size phallus that foreign corporates wanted to shove up its arse to actually trying to protect its own people's interests. I wish more companies were "combative, abrupt, and disruptive" to the likes of Google, Facebook, and others.

        • Re: (Score:1)

          by Anonymous Coward

          It is more than that. India has a deep anti-business culture and a knee jerk mistrust of foreign companies. This is worse in eastern India. Good luck getting anything done in Bengal. But even in western cities like Mumbai, or Tamil areas like Chennai, there is roadblock after roadblock.

          This. I am on extended business travel in India right now from the US. Small list of issues I'm facing:

          - Everything here relies on a digital wallet - PayTM being the most popular. There is no digital wallet available for foreigners. To get a digital wallet you have to validate your identity in person. Foreign passports are not accepted as valid identification.

          - International credit cards are not accepted by most online merchants. Zomato Gold (similar to Yelp), movie tickets being two notable example

          • > - Everything here relies on a digital wallet - PayTM being the most popular.

            Not true. I am an Indian living in India & I don't have any digital wallet. I do most things using netbanking payment gateways. But of course for that, you need an Indian bank account.

            • You're agreeing with him, most things you do you use a digital wallet connected to your Indian bank account.

              You simply lied and said it wasn't true and that you didn't have one, and then explained that yes, that's how you do things.

          • Re: (Score:2)

            by qbast ( 1265706 )
            Every damn thing requires verification by SMS code. And of course foreign phone numbers usually don't work.
        • Makes perfect sense they wouldn't trust foreign corporations. The last time they did their whole country was subjugated by a private army. There is no point in making a lot of money if you sell your people out in the process. As to their competitiveness I don't know enough about the topic to know if you are right or wrong.

    • Re:Blame Facebook and Google (Score:4, Insightful)

      by GuB-42 ( 2483988 ) on Monday February 18, 2019 @06:57AM (#58138812)

      Are you joking? There are a lot of bad actors who are much worse than Google and Facebook. A significant part of them aren't even aware of how bad they are.

      Facebook and Google are huge targets. They are under high scrutiny because everything they do have a million times more impact than the same thing done in mom's and pop's website.

      I've seen so many appalling things being done simply because of incompetence: password recovery methods sending you your plain text password, mailing list using the "cc" field, exposing hundreds of addresses, a real estate agency exposing all their customer data in a windows network share on an open WiFi network, ... Some small companies that simply never heard about protection of personal data. These are all small scale but as a whole, they probably end up doing more damage than Google, Amazon, Facebook, Apple and Microsoft combined.
      Ending that kind small scale of abuse is a large part of GDPR btw. Things like the Data Protection Officer requirement (who doesn't have to be a new hire) is just a way to tell companies, big or small, to actually care.

    • âoeIn the past year or so, the engagement has been combative, with abrupt, disruptive policy changes that are being held without consultation, and, unusually, with absolutely no room for negotiation...â

      I wonder where they learned that?

  • Not the worst idea, actually (Score:5, Insightful)

    by Anonymous Coward on Sunday February 17, 2019 @11:16AM (#58135104)
    Facebook and the likes have amassed a lot of power. An open market is a fair practice, but it is incredibly important that every country tries to build their own ecosystem of tech companies. It's unfathomable to imagine five U.S. companies dominating in most markets.

    • Re:Not the worst idea, actually (Score:4, Insightful)

      by alvinrod ( 889928 ) on Sunday February 17, 2019 @01:05PM (#58135594)
      I think this is a gross oversimplification. For India it probably makes sense given the large size of the country as well as the capabilities of their workers (no one would complain about H1-B workers otherwise) and there's plenty of reason for a home-grown industry. However, should Ireland prioritize that same buildout (at least in terms of social networks) or would it just be better to leave that up to others so that Ireland can carve out its own niche?

      There's as much folly in believing that everything needs to be produced locally or within a country as there is in outsourcing everything. There are a lot of countries that would benefit more from their high skill workers going into medicine, etc.

    • Or two Indian companies dominating world wide...

  • Seriously? (Score:3)

    by rmdingler ( 1955220 ) on Sunday February 17, 2019 @11:18AM (#58135116) Journal

    Indian politicians may have reservations about inviting foreign companies into domestic markets, but it's much more likely Silicon Valley companies haven't put forth the effort to seduce Indian legislators. Thinking the World needs you is confidence of the sort folks find distasteful, rather quickly. /p>

    India's lawmakers are elected members of Parliament. Seriously, a bit of lobbying effort would go a long way.

  • H1-B (Score:1, Interesting)

    by Anonymous Coward

    Reject and invalidate all Indian H1-B visas. See how long they keep stonewalling us after that.

    • Re: H1-B (Score:3, Insightful)

      by vasanth ( 908280 )
      You make your rules, we make ours.. we don't run the country for the benefit of US companies.. the same way as the US

    • Re: (Score:1, Informative)

      by Anonymous Coward

      Newsflash: H1-B visas are not to benefit Indians, they're cheap labor for American Corporations.

      If you suddenly cancel so many visas, the first and most affected parties will be those American Corporations that you are pretending to protect.

      Behaving like a bully is not always helpful to your own interests.

    • So the workers stay in India and the USA crumbles from a lack of cheap workers?

      Sounds like a good idea actually.

  • Racist? (Score:5, Insightful)

    by reanjr ( 588767 ) on Sunday February 17, 2019 @11:44AM (#58135246) Homepage

    So, Europe imposes user protection and they are progressive champions of the people, but India imposes user protection and they are a backwards second world nation who doesn't know how to operate in the global economy, is that it?

    • So, Europe imposes user protection and they are progressive champions of the people

      Don't think so. Isn't the general consensus here that they're nanny-state cawmanusts?

    • So, Europe imposes user protection and they are progressive champions of the people

      You're not reading the same Slashdot I am. Based on what I've seen Europe is a repressive regime who has destroyed businesses and exists as a bureaucratic hellhole funded exclusively from levying fines and taxes on poor innocent American megacorporations.

      Or so Slashdot has told me.

    • Depends; did they actually implement the same thing, with the same affects on others? Or, being a backward country drowning in corruption, would it be implemented in an entire different way, even if it had been written the same?

      The idiocy in the story is conflating the entire non-Indian international economy with "silicon valley." But if it is good or bad for them that they implement the rules differently than Europe, that's up to them. But they're guaranteed to continue to have less integration with intern

  • India tried to liberalize the rules for foreign investors about 50 years ago, too, and attracted quite a few large American companies to do business there. But, the same sort of crackdown occurred and the foreign companies all bailed out and cut their losses. Now it seems to be happening again. Part of the problem is that several splinter groups of the Indian Communist party maintain a power base in different provincial governments in India. These people have the power to negotiate with the national gov

  • Within two paragraphs the summary makes contradictory claims. It begins with "India, the world's second largest internet market" and ends with saying that Silicon Valley companies that count India as one of their biggest markets is generating very little revenue.

    Stick with any one of the narrative.

    • "world's second largest internet market" = lots of people

      "generating very little revenue" = no money

    • "The story also looks at how much revenue Silicon Valley companies that count India as one of their biggest markets is generating there [i.e. in India] - Spoiler alert: it's very little."

      What this is saying is that revenue from the Indian market is being captured by Silicon Valley instead of India, and India is sick of it.

    • Within two paragraphs the summary makes contradictory claims.

      The claims are not contradictory.

      1. India is the world's second biggest internet market (China is #1).

      2. They aren't doing it with American tech.

      Chinese smartphones are winning in India [venturebeat.com]

    • Re: (Score:2)

      by AHuxley ( 892839 )
      India has its own networks, telcos, telco peering, ISP, products, social media and services.
      The USA cant extract the cash it wants in the way it wants.
      But trusted brands in India are making a lot of "internet' money.

    • It is a bit excessive to expect slashdot editors to know the difference between a user and success on the internet.

  • sure, blame India (Score:1)

    by Anonymous Coward

    So countries making requirements on how companies handle and make use of user data and on how ecommerce platforms operate is considered an "extreme extreme" shift from "warm, welcoming, collaborative" to hostile ?

    India is right. They have noticed they are getting raped and are unilaterally doing something about. Why should the rapists have any say in this?

    It is a new world guys, the world has woken up to your shenanigans and is not putting up with it any longer.

  • Fair demand (Score:4, Insightful)

    by gopla ( 597381 ) on Sunday February 17, 2019 @12:25PM (#58135426) Journal

    It looks like India is making a fair demand from Silicon Valley companies. When it invited them with open arms it was expected that the warms would be reciprocated It looks like India is making a fair demand from Silicon Valley companies. When it invited them with open arms it was expected that the warms would be reciprocated.

    It is not one way street, that all companies get access to Indian markets and India don't even get a say on their users data security and privacy. Expecting financial data of Indian users to be stored locally is a reasonable demand. Another regulation that separates market place and manufacturer i.e., restrict monopoly power of market place provider is also reasonable. It provides level playing field to everybody.

    If Silicon Valley companies expected to be given open field without any regulations, then it can be only termed as their fault. If they term this as turning back on Silicon Valley, it is their choice.

    It is expected that companies like Twitter and Facebook remain impartial in the upcoming elections. Not take any sides and try to meddle in the election processes. Otherwise, they will have to be ready to face more stronger regulations.

  • What's that? country we've been sending our tech to takes decades of skills and education and goes their own way? Who could have seen that coming?

    oh right, everyone. It's just the executives don't care about their country, only their wallet.

    • The only things USA, as a country, has sent to India are bombs and guns that they sold to Pakistan to be used in India, and bribes and arm-twisting to pass USA friendly laws of opening their market or whatever pet project a senator feels it is her or his duty to export to them savages.

      Indians have been raised over open-source. What tech do you think they were "given"? JavaScript? UX?

  • As near as I can tell, all India has done for US high tech is drive down salaries. In the ERP segment, where I work, back in the early 2000's you could make north of $200/hr as an independent contractor working on Oracle or SAP systems. Thanks to the influx of cheap labor, primarily from India, those rates are now about half that.

    These big companies like IBM and Accenture have huge collections of programmers in India. Those jobs were not in addition to US positions. Those were US positions eliminated and tr

    • > Let's see how the corrupt Indian politicians react when all those remittances start to slow down.

      Less than 15% of India's remittances come from the US.

  • "with abrupt, disruptive policy changes that are being held without consultation, and, unusually, with absolutely no room for negotiation" Just like the tech company's terms of use then?
  • ...as the European Union & some states in the USA. All they're doing is putting some protections on Indian citizens' personal data. Why should the Indian government let Silicon Valley collect, store, & exploit that much data on its citizens, including whichever Indian politicians & business people might use Silicon Valley services like Facebook, Google, & Twitter? Surely that would be a matter of national security & competitiveness in international politics & trade?

  • Not going to matter one way or another (Score:5, Interesting)

    by Orleron ( 835910 ) on Sunday February 17, 2019 @07:09PM (#58137164) Homepage
    I definitely don't think this is going to matter one way or another. I actually have a fair bit of experience doing business in India, and it amounts to this: whatever someone will pay you in the US or EU, take a tenth of that and that's the MOST you will get from Indian users. I used to sell medical device coatings that would cost $20-$75/per coating per device. That's more than most people in India pay for the WHOLE device in most cases, depending. I sell courses online for $200/pc on my personal site. Indians offer about $20 for them, and still ask for discounts. I teach courses for a company that charges roughly $3,000 per person to have me teach them for three days, and we never go to India because there's no one in the whole country that would pay that. They keep trying to get us to go there for like 20 bucks a person. Not gonna happen. The reason for this is money is on a completely different scale there. A white collar professional makes about $600 to $1,000/month. That's considered good money. I tried to break a 1000 rupee note at a hotel concierge once (roughly equivalent to a 20-dollar bill), and they didn't have enough money in their entire cash register to do it. You can't make real money in India. If you do anything there at all, you do it because you want to help.
  • Glad to see someone still has it.

  • Hmmm (Score:3)

    by nehumanuscrede ( 624750 ) on Sunday February 17, 2019 @08:30PM (#58137436)

    Perhaps India simply pays attention to what the likes of Google, Facebook, Microsoft, et al are doing to the United States and want absolutely no part of it.

    Life is much easier if you're capable of learning from someone else's mistakes.

  • "In the past year or so, the engagement has been combative, with abrupt, disruptive policy changes that are being held without consultation, and, unusually, with absolutely no room for negotiation or even deadline extensions"

    This could be a synopsis of the current american government just as well. What goes around comes around and people just don't trust america anymore.

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  • By that, I presume make the companies follow acceptable standards, pretty much as has been done in Europe with the GDPR.

    The biggest effect upon US businesses of the GDPR is that comparable user protection for your citizens is seeming more common/likely. If the rest of the world follows these practices, it will be harder for your rulers to prevent you from benefiting from them.

  • Maybe I'm just getting old but to me, Silicon Valley is still about technology. Most of these concerns seem more about social networking and other personal data gathering, which I consider to be much older human activities that just happen to be easier to do when done on computers, not something that actually requires technology.

    Though I suppose a good portion of the old Silicon Valley technology development has been moved to China already, so the above may be moot anyway.

  • FTS: "In the past year or so, the engagement has been combative, with abrupt, disruptive policy changes that are being held without consultation, and, unusually, with absolutely no room for negotiation or even deadline extensions"

    Except for the word 'unusually', isn't the above paragraph a pretty accurate description of how most big tech companies treat their users / customers / 'products of the human variety'?

  • Motorola hired Sanjay Jha who knew short term a cash drain so pulled back on low tier. Many cried but itâ(TM)s demographics strategic... donâ(TM)t think Mot got any cash out of India. China on the other hand was positive. Inexpensive products to distribute plus local profits.

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