India widens regulatory grip over tech firms

India widens regulatory grip over tech firms

technology By Jan 03, 2024 No Comments

india Widens Regulatory Grip Over Tech Firms

In 2023, india introduced a series of regulations and tweaked policies that borrowed from Europe’s antitrust approach and Chinese-style government surveillance, alarming executives and investors in the world’s most populous market. The measures aimed to tighten governance over the tech sector. New regulations are on the horizon in 2024, as New Delhi continues its regulatory shift.

Impact on Online Gaming Industry

Last year, the Goods and Services Tax (GST) Council began levying a 28% tax on online gaming, casinos, and horse racing, severely impacting India’s once fast-growing Fantasy sports startups. Leading investors warned that the measure would eliminate $2.5 billion in market value and 1 million jobs. These companies have since started exploring markets in South Africa and Latin America to sustain their businesses amid the new tax regime.

MPL, a leading Fantasy sports startup, eliminated half of its workforce. The market appears to offer fewer prospects for investment, stifling growth in the gaming sector. Indian online gaming companies are forced to seek new opportunities abroad, as the tax regime affects their revenues in the home country.

Telecommunications and surveillance Laws

india enacted a new telecommunications law in 2023, seeking to update its antiquated rules. The law grants New Delhi heightened ability to monitor networks and traffic data for national security interests. Meta’s policy head warned employees about the potential application of the law to Meta’s services in the future. Privacy advocates cautioned that the new telecom law provides india authority to undermine encryption and confidentiality.

Digital india Act and Content Scrutiny

Later this year, the Ministry of Electronics and IT will look to enforce the Digital India Act, which seeks to replace the IT Act of 2000 and oversee the market practices of large tech companies. Streaming platforms like Netflix and amazon Prime are also facing more scrutiny over the content deemed vulgar, with a November proposal asking firms to form committees evaluating individual shows and movies.

Global Tech Companies and Investors

India has become a crucial growth market for global tech titans and investors. Giants such as Google, Meta, amazon, Apple, Microsoft, and Netflix have invested tens of billions of dollars into the country in a high-stakes race to tap into its massive scale and capture the next phase of their growth. Global venture capital, private equity, and hedge funds have also invested over $100 billion in Indian startups in the past decade.

Efforts in Domestic Manufacturing

India began advancing more protectionist policies roughly five years ago. Alongside attractive incentives from New Delhi, this has fueled growth in domestic manufacturing capabilities. Google chief executive Sundar Pichai urged India to draft regulations in a way that can help the nation benefit from open and connected internet. India’s central bank raised risk weights on unsecured loans to slow quick growth in consumer credit, following a broader crackdown from the Reserve Bank of India to fintech startups in 2022.

industry Response and Concerns

Several industry developments have raised concerns. In January 2023, the Ministry of Electronics and IT proposed forcing social media platforms to remove content deemed “fake or false” by the government’s Press Information Bureau. Indian policymakers argue that the regulations protect consumers. Not all the regulations that New Delhi has proposed have received backlash. In a meeting with OpenAI co-founder Sam Altman, Modi and his officials assured the entrepreneur that India will take a “light” approach with regulating AI.

Challenges for American Firms

For numerous American firms, life is getting increasingly challenging in India. Amnesty confirmed Apple warning that Indian journalists’ iPhones were infected with Pegasus spyware. The tech industry’s landscape in India is evolving rapidly, with increasing regulatory measures that have far-reaching implications for both domestic and international players.


India’s regulatory actions are reshaping the landscape for tech firms and investors. As the country continues to introduce additional regulations and policies, the tech sector is adapting to the changing Environment. The impact of these measures will have long-term ramifications, influencing market strategies and investment decisions for all stakeholders involved.

Source: techcrunch

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