New Delhi: Internet entrepreneur Sanjeev Bikhchandani says an estimated Rs 17 trillion of market cap has been transferred abroad after young Indian start-ups were forced to shift their company domicile overseas by foreign investors promising the funds they need for growth.
“Shades of the East India Company type of situation here – Indian market, Indian customers, Indian developers, Indian workforce. However 100% foreign ownership, foreign investors. IP and data transferred overseas. Transfer pricing issues foggy,” he tweeted. “Basically institutionalised transfer of wealth away from India while living off the Indian market and Indian labour somewhat like the days of the Company rule.” Profits from such “global exploitation” of intellectual property (IP) created in India by Indians retained overseas. “Tax to Indian govt on such profits??? Indian investors shut out,” he tweeted.
Reached for comments on his tweets, Bikhchandani, whose BSE-listed firm Info Edge (India) owns job search portal Naukri.com, and others, said flipping is externalising a company.
“You take an Indian start-up and transfer ownership of all its shares to an overseas company that has been usually freshly floated just for this purpose. So now the Indian company becomes a 100 per cent subsidiary of the overseas entity,” he said.