Hit or Miss
A recent headline in the Economic Times read: “Web3: Will India miss the bus to the Internet’s future?” Here are a few excerpts from the story:
Of the dozen Web3 startups ET Prime spoke with, over half of them have moved out of India. According to experts, as more such companies move overseas, India will not only miss the Web3 bus but also lose millions in tax dollars.
…It’s not a new phenomenon since India’s earliest unicorns such as Flipkart and InMobi are registered in Singapore. But with Web3, the scale is probably much higher. Over the last one year, many startups have shifted their base to Dubai, which is becoming a major centre for crypto innovation…The reason behind all of them moving out of India is the same — lack of regulatory clarity.
…Regulatory issues apart, there is another reason why founders are registering their companies overseas — funding…The lack of regulatory clarity in India has made it tough for investors to fund Web3 companies with ease in the country.
…Rashmi R Padhy, vice president – business operations, WazirX, a cryptocurrency exchange, agrees. He says that during the first two stages of the Internet’s evolution, companies like Facebook and Google emerged. Meanwhile, India could only become a service provider to these companies. Even with the mobile revolution, India was late into the game, he adds. “I think we are seeing another cycle come up now in Web3. My fear is that with the current approach, India is again going to get left out and will become the service provider for Web3. By the time we understand it, we will be late, and India will have missed the bus again,” Padhy says.
After attending a crypto/blockchain conference in the US a couple months ago, this is what I had written: “My starting belief was that there is a fundamentally new Internet being built, bringing back memories of the mid-1990s. I was not wrong; the excitement among the speakers brought back the heady days of the early Internet era, one which I saw and participated in first hand…My view, reinforced after the conference, is that these are early days in the creation of the next generation Internet infrastructure – decentralised, permissionless, ownership, built on cryptography, enabled by blockchain. It is up to entrepreneurs to ask the question: what is centralised today that can be decentralised? And from there will sprout a range of businesses…A new future is coming with the collision of Web3/blockchain, gamification, the creator economy and the metaverse. It will take many years to play out. Just like the Internet…If you are an entrepreneur or a CEO of a big business, pay attention to the Web3 world that is emerging. Plenty of capital and an awesome array of talent is leading the way in creating new ways for us to live, work, entertain and socialise.”
Just like Web 1.0 and Web 2.0, Web3 is going to become the foundation for a new wave of technological innovations. Entrepreneurs and investors are working together to bring new things to life. With India having both a critical mass of consumers and the tech talent, for the first time there is an opportunity to play on a level playing field with global companies. But uncertainty and excessive regulation are business killers. Will India’s government do the right thing and take a hands-off approach like it did with IT services and let businesses thrive? Or will it limit economic freedom with its short-sighted politics and let another trillion-dollar wealth creation opportunity pass by?
