Not colonization but this is what happens when most Indian businesses won't be willing to burn huge amount of money to get growth initially. That lack of funding environment is a good opportunity for cash rich foreign investors who have an appetite for that kind of growth.
I can only think of one recent IPO in India from tech space which did well, Infibeam[0]. But then again they had a good business model which didn't require burning a lot of money.
It will be very difficult for an Indian startup to burn money to compete with a US competitor. Considering that the US is a much larger market, the reveneues of the US based competitor are simply going to be much higher. For example, Facebook makes $100 per North American user per year. Even if there was an Indian startup starting from India, how would they make similar kind of money? The US is a really large homogeneous market with good enough infrastructure support, that businesses starting from US will always have the revenue advantage over other nations. The only counter point we have seen is the China model, where the Government takes stepes for protecting local companies. Yes, there are some B2B companies outside the US that are doing well, but I can't think of many B2C ones.
Agree with your statement but here I was talking about foreign VCs funding Indian startups because Indian investors don't have the appetite for it.
You won't be able to compete with an already established player from
US if you do a 1:1 same product. You should try to exploit something that works in the local market like what Line did for messaging in Japan or South Korea.
Of course an Indian startup can't compete with Amazon and Walmart! But they can easily ban foreign companies and let it grow organically in the country, they might get it 5 years later but they are not bankrupting all of their local business with no upside for the economy!
If they had to go down this path, they should have done it years ago. I don't know enough about economics to comment whether that have been good or bad though. Before opening up in 90s, Indian economy was closed as well but that didn't necessarily led to Indian enterprises in those spaces being very competitive once they lost all those protections.
Before 90s with all those protections, Indian companies had become sloths. The economy was in bad shape and the govt had no option but to open up for foreign investors/companies.
If anything, foreign investment/companies have brought better days for Indian customers, even though it means more money draining out to US.
Those industries that are still protected(eg. There are no foreign universities) are still in bad shape.
I can only think of one recent IPO in India from tech space which did well, Infibeam[0]. But then again they had a good business model which didn't require burning a lot of money.
0. https://www.valueresearchonline.com/stocks/snapshot.asp?code...