Why Chinese App Ban Might Make Homegrown Startups Anxious : China has created a robust presence in India in the technology sector over the last five years this sentry has been through venture capital investments in most homegrown startups at least eighteen of India’s top 30 unicorns such as by juice PTM, Ola zoo motto and swiggy are bad by Chinese investors Chinese companies have invested about two billion dollars out of the 14 billion dollar.
Indian startups raised in 2019 that makes Chinese penetration in Indian tech startups at around 4 billion which is a 12-time increase in the last four years according to a report by analytics firm global data according to experts revised FDI norms have slowed down approvals and the border clash will make it even more difficult to get Chinese investment as a result India’s trailblazing unicorn startups might grow anxious if more avenues of funding both homegrown and foreign capital pool do not open up.
This means the impact on establish unicorns might be limited but new startups could struggle to kick-start the start of ecosystem was trying to convince the government not to impose stricter FDI rules to small investments in early-stage companies but the bloodiest face off in 45 years between the two neighbors at the Ladakh border will lead to challenges in corporate tie ups and FDI flows from China some experts feel the Ladakh incident could make further investments in regulated entities extremely difficult.
But it was still too early to draw a conclusion Chinese companies also together account for around 75% of the smartphone market in India but what will happen to the hardware players is not clear the industry might get divided with one side believing that regular deal-making should not be affected by geopolitical issues and the other side arguing on why India must not let companies in countries with stress ties by its assets.
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