Economic Survey Outlines Measures to Attract Indian Startups Based Overseas
- ByStartupStory | January 31, 2023
The 2022-23 Economic Survey suggests that Indian startups, which were previously domiciled abroad, are considering a return to India as the country has seen an increase in access to capital from venture capital and private equity firms.
Indian startups that have been domiciled abroad have benefited from easy access to capital from private equity and venture capital firms, favorable tax structures, and less complex regulatory environments. The report refers to this trend as “Flipping”.
Recently, the Indian government has observed that many Indian startups previously headquartered abroad are now returning to India due to the growth of the private equity and venture capital ecosystem and the support provided by regulatory bodies.
The Economic Survey outlines ways to attract more Indian startups domiciled abroad to return home, known as “reverse flipping”. To make this happen, it suggests measures such as streamlining ESOP taxation and other taxes, easing capital flows, promoting partnerships with established private entities, and enhancing the incubation and funding environment for social innovation and impact investing.
The Economic Survey stated “With solution-oriented strategies, startups will continue to be the messengers of India’s entrepreneurial dynamism,”
In the previous year, PhonePe, which is owned by Flipkart, declared that it was transferring all its operations from Singapore to India. The CEO and co-founder, Sameer Nigam, stated that the company’s investors incurred taxes of around INR 8,000 crore.
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