Bachchandani, founder of Naukri.com, said foreign funds are colonizing Indian startups

Investors at Naukri.com and Zomato said that foreign funds had become the new East India Company, colonizing successful startups in India and owned abroad to avoid Indian regulation and taxes.

This is perhaps the first time that an important startup entrepreneur from India has raised a vocal voice against ‘flipping’. Sanjeev Bikhchandani said that according to an estimate, the market capitalization of about Rs 17 lakh crore has been shifted abroad by forcing the young entrepreneurs to transfer their company to foreign investors.

He tweeted, “The situation is like East India Company here – Indian market, Indian customers, Indian developers, Indian workforce. Yet 100% foreign ownership, foreign investors. IP and data have migrated overseas. Blur pricing issues. The issue of value transfer is bleak.” He said that there is indeed an institutionalized transfer of funds from India, whereas the Indian market and Indian labor situation are somewhat like the days of the Company Raj.

He said that the intellectual property created by Indians is being exploited globally. He tweeted, “Profits from global exploitation of IP created in India by Indians retained overseas. Tax to Indian govt on such profits??? Indian investors shut out.” Bikhchandani’s BSE-listed company Infoedge owns Naukri.com, marriage site Jeevansathi.com and real estate search engine 99acre.com. He said that flipping is making Indian companies inferior. “You take on an Indian startup and transfer the ownership of all its shares to a foreign company, which is usually created just for this purpose,” he told PTI. In this way, the Indian company becomes a wholly-owned subsidiary of a foreign entity.”