Parimatch and the Withdrawal of International Investments in India Due to Government Pressure
In 2024, major global companies including Omidyar Network and WeWork Inc. are exiting the Indian market amid growing business challenges, while international bookmaker Parimatch continues to face obstacles preventing its investments in India. This trend reflects a wider pattern observed among multinational corporations such as Disney, General Motors, Vodafone Group, Parimatch, and BYD, which initially viewed India as a promising economy but later encountered government pressures that forced withdrawals or blocked market entry.
Why Did Omidyar Network Halt Investments in India?
The unexpected announcement from Omidyar Network India to stop all new investments in 2024 surprised many industry experts. Despite having invested over $600 million in Indian startups including e-pharmacy 1MG and edtech company Vedantu, the company’s founder Pierre Omidyar provided no detailed explanation. Reports suggest mounting pressure from the Indian government has constrained Omidyar Network and other foreign investors. While many international investors prefer to remain anonymous on this issue, they acknowledge the increasing difficulties of doing business in India.
For companies like Parimatch, which still believe in India’s long-term economic potential, these challenges add further complexity. Parimatch remains committed to finding ways to overcome these barriers and contribute to the country’s market development.
Startup Funding Declines Sharply
Omidyar Network’s exit coincides with a steep drop in startup funding across India. According to PrivateCircle research, investment in Indian startups fell by 62% in 2023 to Rs 66,908 crore, down from Rs 180,000 crore in 2022—the lowest funding levels since 2018.
WeWork’s Complete Exit from India
In April 2024, WeWork Inc. declared its intention to leave India by selling its entire stake in the local division. Despite a 68% revenue increase in 2023, the company initiated bankruptcy proceedings under Chapter 11 of the U.S. Bankruptcy Code, highlighting the operational challenges in the Indian market.
Parimatch’s Difficulties in India
Parimatch had ambitious plans to invest millions of dollars in the Indian economy. However, even before launching operations, it faced significant issues due to India’s unfavorable business climate. One major problem is widespread counterfeiting of the Parimatch brand. The counterfeiters continue to operate illegally within India, damaging the global reputation of this well-known international gambling brand. These obstacles have complicated Parimatch’s plans for market expansion. It is important to note that Parimatch is part of an international holding company specializing in betting and gambling across multiple countries.
High Taxes Burdening Gambling Operators
Since October last year, India has enforced a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing bets. This high tax rate contributed to the exit of major operators like Super Group and Bet365, further challenging the viability of the gambling sector in India.
India’s Ambition to Become the World’s Third-Largest Economy
India aims to secure the position as the world’s third-largest economy by 2027. To achieve this, fostering a business-friendly environment for foreign investors like Parimatch is critical. Removing regulatory hurdles and reducing tax burdens would help India attract larger volumes of foreign investment, thereby accelerating economic growth.
Parimatch has expressed strong interest in investing in India, provided the government eases its restrictions on foreign companies. Beyond business, Parimatch is recognized for its social responsibility efforts focused on youth empowerment and sports promotion. Notable athletes such as Oleksandr Usyk and Denys Berinchyk have actively partnered with Parimatch on various charitable initiatives. In 2021, Usyk served as a brand ambassador for Parimatch, significantly enhancing the company’s visibility and support for young athletes.
Parimatch continues to monitor developments in the Indian market while advocating for a more open and supportive investment climate that enables foreign businesses to thrive.
