A recent KPMG report has raised concerns about the monopolistic dominance of big tech firms in India, stating that their control over user data, financial resources, and opaque algorithms is limiting the democratisation of entrepreneurship.
The report emphasizes that these tech giants create a biased competitive environment, stifling the growth of startups and emerging entrepreneurs.
The Need for Democratising Entrepreneurship
According to KPMG, democratising entrepreneurship involves creating equal opportunities for individuals across diverse backgrounds, irrespective of their gender, socioeconomic status, or geographic location, to participate in entrepreneurial activities.
However, the monopolistic practices of large tech firms create an unbalanced playing field, suppressing fair competition and hindering innovation.
“Their dual role creates a biased competitive environment, suppressing startup growth and fair competition,” the report states.
Support for the Digital Competition Bill
In May 2024, 40 Indian startups supported the draft Digital Competition Bill, urging the government to fast-track its implementation. The bill proposes to regulate Systematically Significant Digital Enterprises (SSDEs) and aims to curb monopolistic and anti-competitive practices of major tech players.
The government is currently reviewing suggestions from multiple stakeholders, including:
- Enterprises: Amazon, Apple India, Swiggy, Zomato, Flipkart, Google, Meta, Twitter, Paytm
- Associations: CAIT, NRAI, Nasscom, FICCI, Assocham, CII
- Think Tanks: Niti Aayog, Indian Governance and Policy Project, CUTS International
Finance Minister Nirmala Sitharaman informed Parliament on December 9 that consultations took place in March-May 2024, with the latest round in June 2024.
Allegations Against Quick Commerce Platforms
In November 2023, the Confederation of All India Traders (CAIT) accused quick commerce players like Zomato-owned Blinkit, Swiggy Instamart, and Zepto of misusing FDI regulations, manipulating the market, and threatening the survival of small retailers and kirana stores.
However, Zepto founder Aadit Palicha dismissed these allegations, stating that quick commerce platforms complement kirana stores rather than undermine them.
Other Barriers to Startup Ecosystem Growth
Beyond monopolistic practices, the KPMG report identifies additional challenges hindering India’s startup ecosystem:
- Digital Divide: Unequal access to technology infrastructure limits opportunities for startups in underserved regions.
- Funding Disparities: Access to capital remains skewed across geographic locations, gender, and socioeconomic backgrounds.
- Cultural Barriers: Entrepreneurship is still viewed as risky compared to traditional career paths, limiting participation.
- Intellectual Property Challenges: Startups often face risks related to IP theft, with larger firms exploiting their ideas.
Also read: FMCG Industry Hopes for Growth Recovery in 2025
The Way Forward
The report underscores the need for greater transparency, fairness, and open competition in India’s digital economy. Policies like the Digital Competition Bill could pave the way for a more inclusive and equitable startup ecosystem.
Government and Industry Collaboration is Key
The report calls for collaborative efforts from policymakers, industry stakeholders, and technology firms to address these barriers. Initiatives aimed at bridging the digital divide, improving funding access, and protecting intellectual property are critical for sustainable growth.
As India continues to position itself as a global startup hub, ensuring a level playing field for entrepreneurs will be essential for fostering innovation and driving long-term economic growth.
