The Centre is reportedly planning to improve accessibility for all its websites, digital applications and services across government-to-government, government-to-business and government-to-citizen space.

Citing a senior government official, ET reported that the Ministry of Electronics and Information Technology will anchor this project, suggesting ways to improve page and website loading times, enhance user interfaces on websites and apps and make them more accessible for people with disabilities.

“If you see the government websites of today, almost all the information is presented on the first landing page. This makes them (websites) slow. We plan to not only improve the accessibility for such websites but also make the UI (user interface) cleaner so that the user is not burdened with a lot of information at the same time,” the official said.

As per the report, in the initial phase, all IT ministry websites and applications will be upgraded to enhance accessibility. These upgrades are part of the IT ministry’s plan to improve the global visibility of Indian government apps and services.

“So, for example, we have a user who can not see very well. Why can a government website or app not have the option of narrating the contents to such users and guiding them to their choice effortlessly? If there is a need to integrate Bhashini, we can surely look into that as well,” the official added.

Meanwhile, in May the government announced plans to create a unified portal for all its digital public goods (DPGs), such as Aadhaar, the Unified Payments Interface, and the Open Network for Digital Commerce, to provide easy access to apps and services. 

The Ministry of Electronics and Information Technology will likely lead this initiative, collaborating with all ministries, departments, and agencies to detail the digital public infrastructure (DPI) they have created.

In April, the government established five working groups to address key issues such as data anonymisation, zero trust architecture, IoT and mobile device security, and digital education. MeitY formed these groups to develop guidelines and frameworks for the effective implementation of e-governance projects across various ministries and government departments.

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The government has proposed new guidelines to reduce the approval time for power connection for electric vehicle charging stations.

As per ET, the power ministry’s draft revised guidelines on charging infrastructure for EV proposes that the approval time in metropolitan areas will be cut from 7 days to 3 days, and in municipal areas from 15 days to 7 days. In rural areas, the time will be reduced from 30 days to 15 days.

The views on the draft guidelines are to be submitted within 30 days.

The move is a huge advantage for companies such as Exponent Energy and BluSmart that have raised funds and companies like Tata Passenger Electric Mobility and Adani TotalEnergies E-Mobility building partnerships, and betting on setting up electric vehicle chargers on petrol hubs across the country’s landscape.

State nodal agencies and city authorities will carry out periodic mapping, at least once in every year, of the geographic distribution of potential EV charging demand, the report added.

It also added, the tariff for supply of electricity to EV charging stations is largely unchanged and is proposed to be a single part tariff and not exceed the ‘average cost of supply, till March 31, 2026.

When the proposal comes into force, it is likely that the demand for electric vehicles among consumers would rise, benefitting the EV makers and other energy tech companies involved in the sector.

At least one charging station shall be available in a grid of 1 km x 1 km in the urban limits by the financial year 2030, compared with 3 km X 3 km earlier, based on the proposed draft. It further said, one charging station shall be set up at every 20 km on both sides of highways and roads.

This comes at a time, where the Centre approved a new policy in March, under which electric vehicle companies would have to pay lower duty on imports of EVs if they agree to set up manufacturing facilities in the country and the policy is aimed at promoting EV manufacturing in India.

Meanwhile, Delhi NCR-based EV fleet management startup Zypp Electric raised INR 115.7 Cr in a fresh round of investment from Japanese energy giant ENEOS, in May.

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Data restrictions proposed under the draft Digital Competition Bill may “compromise” the user interface (UI) of major digital apps in the country, a report by think tank CUTS Institute for Regulation and Competition (CUTS CIRC) said.

“Data use restrictions may compromise the seamlessness of consumers. Thus, it may enhance the effort and time while using the digital services,” said the report. 

The comments were part of a report that surveyed the plausible impact of the modified UI on account of the changes proposed by the draft Bill. 

CUTS CIRC also said that the Bill may mandate systematically significant digital enterprises (SSDE)-designated companies to undertake “changes” in the product architecture. 

As per the draft Bill, large digital platforms will be designated as SSDEs if they meet certain financial and user base criteria. Some of the thresholds include a turnover of not less than INR 4,000 Cr in India in the preceding three financial years or a gross merchandise value (GMV) of not less than INR 16,000 Cr in the country. 

Citing unbundling requirements under the draft law, the think tank said that the upcoming norms may force users to access these services individually, which are otherwise currently available in a single app.

Flagging another issue, the organisation said that the user consent requirements under the draft digital competition rules may increase the time and effort for end-consumers without “yielding commensurate benefits in privacy and consumer welfare”.

The report also noted that 13 Indian startups and digital companies, including foodtech majors Zomato and Swiggy, fintech giant Paytm, ecommerce major Flipkart, traveltech startup MakeMyTrip, could come under the purview of the draft Bill and the SSDE designation. 

It is pertinent to note that a parliamentary panel, in December 2022, recommended the implementation of ex-ante regulation for digital markets in India. A few months later in February 2023, the Ministry of Corporate Affairs (MCA) set up and tasked the Committee on Digital Competition Law to prepare a draft Digital Competition Bill. 

Eventually, in February this year, the CDCL released its report and examined the effects of designating a significant digital platform as an SSDE on consumer choice. In its report then, the committee defined SSDEs as platforms that “wield significant influence over various aspects of digital services”. 

It also flagged concerns regarding fair competition, data privacy, and consumer choice, and sought an overarching ex-ante law to regulate these players and curb anti-competitive practices. 

Alongside the report, a draft Digital Competition Bill was also opened for public feedback. In their comments, industry bodies panned the draft law and sought its overhaul. 

At the time, CUTS CIRC had said that Indian startups’ ability to build a cost-effective customer acquisition strategy may be adversely impacted due to excessive restrictions and may create additional hurdles to scale up their operations. 

The US-India Business Council (USIBC) had also claimed that some of the restrictions proposed in the draft Bill for tech players will raise costs for the end users.  

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The Reserve Bank of India (RBI) has teamed up with the Bank for International Settlements (BIS) and central banks from four ASEAN nations to launch Project Nexus, a multilateral initiative aimed at facilitating retail cross-border payments. 

Under the initiative, India’s Unified Payments Interface (UPI) will be linked with the respective Fast Payment Systems (FPS) of Malaysia, Philippines, Singapore, and Thailand to facilitate instant cross-border retail payments.

“An agreement to this effect was signed by the BIS and the central banks of the founding countries — Bank Negara Malaysia (BNM), Bank of Thailand (BOT), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and the Reserve Bank of India — on June 30, 2024, in Basel, Switzerland,” the RBI said in a release.

The platform is expected to go live by 2026. Nexus was conceptualised by the Innovation Hub of the BIS, the statement said, adding that the platform can be extended to more countries later.

The pact is part of the RBI’s efforts to link UPI with the equivalent payment systems of other countries to facilitate instant cross-border person-to-person (P2P) and person-to-merchant (P2M) payments. 

While these bilateral connections have been beneficial, adopting a multilateral approach will significantly enhance the international reach of Indian payment systems and give further momentum to these efforts, the central bank said.

“Once functional, Nexus will play an important role in making retail cross-border payments efficient, faster, and more cost effective,” the RBI added. 

It was reported last year that the RBI was also in discussions with its counterparts in the US, Hong Kong and the Society for Worldwide Interbank Financial Telecommunications (SWIFT) for a fast and cost-effective digital cross-border settlement system using central bank digital currencies (CBDC).

Last year, the RBI signed a memorandum of understanding (MoU) with the Central Bank of the United Arab Emirates (CBUAE) to jointly conduct proof-of-concept and pilot(s) of bilateral CBDC bridge to facilitate cross-border CBDC transactions of remittances and trade, and enable innovation in the financial products and services segment.

In February 2023, India and Singapore announced the linkage of their real-time payment system linkage. 

Over the years, the National Payments Corporation of India (NPCI) has also signed agreements with a number of countries, including Peru and Namibia, to develop UPI-like payments systems. 

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The Karnataka government has released a draft Bill aimed at protecting the rights of gig workers in the state and also to offer them social and income security.

The draft of the Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, proposes various welfare measures for gig workers and mandates the app-based delivery and ride-hailing platforms to provide them with social security benefits.

The draft Bill states that it is meant to “protect the rights of platform based gig workers, to place obligations on aggregators in relation to social security, occupational health and safety, transparency in automated monitoring and decision-making systems, to provide dispute resolution mechanisms, to establish a welfare board and create a welfare fund for platform based gig workers, to register platform based gig workers and aggregators in the state.”

With this, the likes of Swiggy, Zomato, Urban Company, Ola, Uber, Rapido, Flipkart, Amazon as well as several other app-based startups are likely to come under the purview of the state government for their treatment of the gig workers employed with the companies.

If passed, Karnataka would become the second state after Rajasthan to introduce a law for platform-based gig workers.

Currently, the draft Bill is available in the public domain and the government has sought comments from stakeholders on the proposals in the Bill.

The Major Proposals In The Bill

The Karnataka government has proposed to set up a gig workers welfare board, which would be headquartered in Bengaluru.

As part of proposing the rights for gig workers, the draft Bill suggested that a platform-based gig worker shall have the right to be registered with the state government upon being onboarded on any platform, irrespective of the duration of the work and the person would be provided a Unique ID applicable across all platforms.

The gig workers would also have access to general and specific social security schemes based on contributions made by them as notified by the state government and have access to a grievance redressal mechanism, among others.

The welfare board is also expected to maintain proper accounts and other relevant records. The Bill states that the aggregators shall provide the board with its database of all gig workers onboarded or registered with them within sixty days from the date of commencement of this Act.

“The Board shall maintain a database of gig workers in the State along with the details of their employment with one or more aggregators, and notwithstanding the duration or time of engagement with any platform,” the draft Bill stated.

In case of termination of work, the contractual agreement between the aggregator and the gig worker should contain an exhaustive list of grounds for termination of the contract by the latter or deactivation of the gig worker from the platform.

“An aggregator shall not terminate a gig worker without giving valid reasons in writing and with prior notice of fourteen days,” the draft Bill proposed.

Besides, if there are payment deductions, the platforms are also mandated to inform the gig workers about the reasons. The aggregators must compensate the gig workers at least on a weekly basis with no delay in disbursal of pay, the draft Bill said.

To be clear, the Bill said that the services provided by these “aggregators” include ride-sharing services, food and grocery delivery, logistics services, e-marketplace (B2B/B2C), professional services providers, healthcare, travel and hospitality, and content and media services.

“The aggregator must provide and maintain, as far as is reasonably practicable, a working environment that is safe and without risk to the health of the platform-based gig worker,” the Bill stated.

The Background

It is pertinent to note that last year in its election manifesto, Congress promised to set up a ‘Gig Workers’ Welfare Board’ for Karnataka with a seed money allotment of INR 3,000 Cr. 

It said that Congress would introduce a new transparent policy to out-source employment for gig workers if the political party came to power in the state.

In July last year, the Karnataka government announced a free accidental and life insurance cover worth INR 4 Lakh for gig workers to ensure their social security. Out of the total INR 4 Lakh insurance facility, INR 2 Lakh is provided for life and another INR 2 Lakh for accidental insurance.

Over the years, gig workers employed across platforms have staged protests in various parts of the country against company policies around wage payments, social security benefits, and working hours, among others.

Being one of the top places for gig workers, Bengaluru has also witnessed several such protests and complaints were lodged with the Labour department. Last month, women gig workers working with Urban Company went on a strike at the startup’s Bengaluru office to protest against its new work policies.

‘Fairwork India Ratings 2023’ had rated Ola, Uber, Dunzo, and Porter as the worst-performing startups on its ratings for gig platforms on the grounds of five aspects – fair pay, fair conditions, fair contracts, fair management, and fair representation.

The post Karnataka Releases Draft Bill To Protect Gig Workers, Seeks Stakeholders’ Suggestions appeared first on Inc42 Media.

The Unified Payments Interface (UPI) transactions saw a marginal decline of 1% month-on-month (MoM) to 13.89 Bn in June from 14.04 Bn in the previous month.

On a year-on-year (YoY) basis, the transaction count surged 49%.

As per the National Payments Corporation of India’s (NPCI) data, the transaction volume in June stood at INR 20.07 Lakh Cr, 1.9% lower than May’s INR 20.45 Lakh Cr.

On a year-on-year (YoY) basis, the transaction volume surged 36%.

The transactions on the UPI rose 5% month-on-month (MoM) to 14.04 Bn in May, and the volume in the same month stood at INR 20.45 Lakh Cr.

Earlier this year, the Reserve Bank of India’s (RBI) governor Shaktikanta Das said that India accounts for nearly 46% of the world’s digital transactions. He attributed this jump to the increase in adoption of the UPI.

“The share of UPI in digital payments has reached close to 80% in 2023. At a macro level, the volume of UPI transactions increased from 43 Cr in 2017 to 11,761 Cr in 2023,” he said.
PhonePe has retained its leadership in the unified payments interface (UPI) ecosystem with a market share of 48.87% in April across peer-to-peer and peer-to-merchant transactions.

In April, PhonePe logged 6.5 Bn transactions via UPI out of the total 13.3 Bn transactions topping the chart. In terms of value, the company clocked transactions worth INR 10 Lakh Cr.

Meanwhile, Google Pay and Paytm have retained their second and third spots respectively in UPI transactions.

Google Pay processed 5 Bn transactions translating to a market share of 37.5%, while volume on Paytm hit 1.1 Bn translating to a market share of 8.3%.

The Indian payment infrastructure has successfully expanded beyond national borders, reaching countries like Nepal, France and New Zealand.

Both the NPCI and the Indian government have been actively working to promote the use of UPI.

NPCI has introduced several innovative features and services to drive UPI adoption, including UPI Lite, credit lines on UPI, UPI LITE X, Tap & Pay, Hello! UPI and BillPay Connect.

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The Ministry of Electronics and Information Technology will be hosting the Global IndiaAI Summit in New Delhi on July 3-4 to promote collaboration and knowledge exchange, while highlighting the country’s commitment to the ethical and inclusive growth of AI technologies.

The summit will provide a platform for international AI experts across science, industry, civil society, governments, international organisations and academia to share insights on key AI issues and challenges, MeitY said in a statement.  

It will focus on advancing AI development in key areas including compute capacity, foundational models, datasets, application development, future skills, startup financing, and safe AI.

The Global IndiaAI Summit 2024 aims to position India as a global leader in AI innovation, ensuring equitable access to AI benefits and fostering socio-economic development across the nation.

Besides, India will host member countries and experts to further Global Partnership on Artificial Intelligence (GPAI’s) commitment to safe, secure, and trustworthy AI.

This comes a month after the Centre reviewed the progress of the INR 10,372 Cr India AI Mission to work out various details of the programme.

In May, S Krishnan, secretary of MeitY, said that the Centre is planning to regulate AI in a way that does not deter innovation in the space. 

The IndiaAI Mission aims to build an ecosystem fostering AI innovation through democratizing computing access, enhancing data quality, developing indigenous AI capabilities, attracting top talent, enabling industry collaboration, providing startup capital, and promoting ethical AI. These pillars drive responsible and inclusive growth within India’s AI ecosystem.

The IndiaAI Mission comprises the following pillars:

• IndiaAI Compute Capacity: It envisions building a cutting-edge, scalable AI computing infrastructure by deploying more than 10,000 Graphics Processing Units (GPUs) through PPP model
• IndiaAI Innovation Centre (IAIC): With this, the Centre is looking to create a leading academic institution to retain top research talent, develop and deploy indigenous large multimodal models (LMMs) and domain-specific models
• IndiaAI Datasets Platform: This platform will be developed by IndiaAI’s independent business division (IBD) and will look to enhance accessibility, quality, and utility of public sector datasets
• IndiaAI FutureSkills: This program will focus on expanding the accessibility of graduate and post-graduate AI programs as well establishing AI Labs to impart foundational-level courses in the domain

This aligns with a time of rapid AI adoption by companies and growing investor interest in AI startups.

In June, audio streaming platform Pocket FM partnered with US-based GenAI platform ElevenLabs to enable writers to convert their text stories into audio series.

In the same month, Maxim AI raised $3 Mn (around INR 25 Cr) in a seed funding round led by Elevation Capital.

GenAI-powered product photography startup Ayna raised $1.5 Mn (about INR 12.5 Cr) to expand its AI capabilities and scale its team.

The post MeitY To Host Global IndiaAI Summit With Eye On Ethical And Inclusive AI Growth appeared first on Inc42 Media.

The Ministry of Finance has said that India and the US have agreed to extend a 2% digital tax on ecommerce supplies until June 30. The move clarifies that American digital companies operating in India must pay the tax during this period.

As per the statement, both countries will stay in close communication to ensure a mutual understanding of their commitments and will work towards resolving any issues through constructive dialogue.

In November 2021, India and the US reached a deal permitting New Delhi to impose a 2% levy until March 31, 2024, or until the implementation of Pillar 1 of the OECD agreement on taxing multinationals and cross-border digital transactions. 

Earlier, in October 2021, India, the US, and 134 other members of the OECD/G20 Inclusive Framework (including Austria, France, Italy, Spain, and the UK) agreed on a two-pillar solution to address these tax challenges. 

The agreement was valid from April 1, 2022, until the implementation of Pillar One or March 31, 2024, whichever came first, as stated in public statements by both sides (‘November 24 Statements’)

As of December 18, 2023, there was a call to finalise the text of the Pillar 1 multilateral convention by March 2024, aiming for a signing ceremony by June 2024. However, consensus on the agreement has not yet been reached.

“In light of above developments, India and the United States have decided to extend the validity of the agreement reflected in November 24 Statements until June 30, 2024. All other terms of the transitional approach remain the same,” the statement said.

PTI reported the development first.

The Equalisation Levy was introduced in India in 2016 to tax digital transactions, specifically targeting income earned by foreign ecommerce companies from India. It focuses on business-to-business transactions and is commonly known as the “Google Tax.”

It was introduced to tax ecommerce companies which have a presence in India, but their billing is done in international markets. These companies often tend to escape the country’s cross-border tax regime by billing their customers from offshore units. The levy is meant to bring these non-resident companies which service Indian customers, under the ambit of tax. 

Equalisation Levy is a direct tax withheld at the time of payment by the service recipient. It applies when payments exceeding INR 1 Lakh in a financial year are made to non-resident service providers.

In 2020, India justified its imposition of a 2% equalisation levy on foreign companies for digital transactions, asserting that the levy is non-discriminatory.

In 2021, the equalisation levy imposed by India on non-resident digital companies had varied impacts across different sectors. Companies like Netflix opted not to pass on the levy directly to Indian consumers to maintain competitive pricing.

Google passed on India’s 2% equalisation levy, which was implemented in April 2020, to its clients whose advertisements were visible in India.

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Maharashtra’s industries minister Uday Samant has said that the state is looking to expand its startups portfolio from the current 8,300 to a staggering 50,000 soon.

“The union government recently issued a list of startups in the last two years, out of which 8,300 are in Maharashtra, making it the number one state in the country. The state government is very positive about these developments and in the future it wants to take this number to 50,000,” said  Samant, while addressing delegates at ASSOCHAM MahaMSMErashtra Empowerment Summit and Award 2024.

The state has also decided to give first class treatment to the companies’ right from MSME to large corporates.

He further said that when a venture is rolled out, it is also important to monitor if  it continues to operate or has shut down. “An analysis on the health of startups and the challenges faced by them needs to be undertaken.”

The minister also said that earlier those companies bagging overseas investments in Maharashtra were given red carpet treatment but today even those which make INR 50,000 investment are also bestowed on the same.

“There are almost 63 Mn MSMEs across the country contributing about 30% to the GDP. These MSMEs also generate employment opportunities and contribute to exports. With a strong synergy of government initiatives and industry participation, our target of achieving a 5 Tn-dollar economy is not far away,” said Anurag Agrawal, co-chair, Assocham National Council on WTO, Trade and Investment Council.

In 2023 alone, the government has recognised 5,801 startups from the state of Maharashtra, displaying a 21.8% rise from 2022, as per Press Information Bureau data.

With the Startup India plan on high run, a flagship initiative of the government, and the newly launched initiative Startup Mahakumbh, these are expected to further give impetus to the country’s startup ecosystem. 

Meanwhile, startups leaders have begun to carry their plans to set up their manufacturing units in the state, with the government initiatives in play. Earlier this week, IPO-bound electric two-wheeler maker Ather Energy is setting up its third manufacturing facility in Maharashtra, to manufacture escooters and battery packs.

Also, in April, computer hardware company Mega Networks revealed its plans to set up a factory for local manufacturing of artificial intelligence servers in Maharashtra by the third quarter of the ongoing fiscal year 2024-2025.

The post Maharashtra Looks To Expand Its Startup Portfolio To 50,000 Soon: Industries Minister appeared first on Inc42 Media.

The Reserve Bank of India has flagged the high levels of delinquency being seen by fintech lenders for small loans below INR 50,000.

In its Financial Stability Report, the central bank said that its decision to increase the risk weight for certain segments of consumer credit, which came as a major blow to several fintech players in the digital lending space, including Paytm, reduced the growth rate in overall consumer credit.

“Even as inquiry volumes remain robust, the impact of increase in risk weights on certain segments of consumer credit pulled down the rate of growth in overall consumer credit, especially personal loans and credit cards,” the report said. 

The report showed that the growth rate in personal loans declined to 30% as of March 2024 from 31% in the year-ago period.

However, the RBI said there are a few concerns in the consumer credit segment that require close monitoring, including the unsecured lending category. The delinquency levels among borrowers with personal loans below INR 50,000 remain high, the central bank said.

“In particular, NBFC-fintech lenders, which have the highest share in sanctioned and outstanding amounts, also have the second-highest delinquency levels, only below that of small finance banks,” RBI stated.

Even the vintage delinquency, which is a measure of slippage, remains relatively high in personal loans at 8.2%, said the RBI.

For the uninitiated, in lending, delinquent accounts are those where repayment haven’t been done by the due date. 

Meanwhile, vintage delinquency is defined as the percentage of accounts that have anytime become delinquent (90 days or more past due) within 12 months of origination. It is a commonly used industry metric to assess the efficiency of the loan underwriting process.

Further, the central bank in its report said, “Little more than a half of the borrowers in this segment (personal loans) have three live loans at the time of origination and more than one-third of the borrowers have availed more than three loans in the last six months.”

It is pertinent to note that a number of fintech startups like InCred, slice and KreditBee offer unsecured personal loans to consumers. On Wednesday, Inc42 exclusively reported that slice is piloting a new loan product under which it will offer users personal loans of up to INR 5 Lakh for a tenure of up to 60 months.

Meanwhile, the central bank said that delinquency levels in other segments like housing loans, property loans, and auto loans remained low in FY24.

Amid the rapid growth in unsecured loans, the RBI, in November last year, increased the risk weightage for outstanding and new unsecured consumer credit exposure of commercial banks as well as NBFCs by 25 percentage points to 125% from 100% earlier. This pushed up the lending costs for unsecured consumer loans.

Following the central bank’s decision, fintech major Paytm decided to “go slow” on sub-INR 50,000 loans and focus on high-ticket personal and commercial loans. Earlier this year, Paytm paused its small personal loans business including the Postpaid portfolio.

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In a relief for online pharmacies, including Tata 1mg, Practo, PharmEasy and NetMeds, the Madras High Court has reportedly set aside an earlier order by a single judge bench asking them to stop engaging in digital trade of medicines.

This is being seen as a booster shot for online pharmacies and will likely set a precedent in other ongoing cases, ET reported, citing industry executives close to the matter.

The weary queue of halts on online trade of e-pharmacies have existed since its interim ban in 2018, when the Madras High Court announced a ban on the online sale of medicines, which was then followed with the Delhi High Court issue of an all-India ban on the online sale of medicines.

Based on reports, the initial order by Justice R Mahadevan in the Madras High Court came after a plea by Tamil Nadu Chemists and Druggists Association in 2018 asking authorities to block websites selling online drugs.

“The order is clear that the status quo continues. We already follow existing guidelines of having licensed entities through which we sell online drugs in each state. Now, let the government come up with its policy and if any major changes, those would be there,” a senior industry executive was quoted by ET as saying.

With a majority of online businesses booming since the pandemic, one such industry that has outshined fairly is the medtech sector.

Despite the interim bans circulating in the country, healthtech companies have been able to raise funds on the grounds of the sector’s growth, where PharmEasy raised INR 1,804 Cr ($216.2 Mn), Innovaccer was in talks to raise a funding in the range of $200 Mn-$250 Mn, while Medibuddy raised $8.4 Mn (about INR 70 Cr) debt funding from existing debt investors.

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Online gaming companies, which are awaiting a review of the 28% tax regime for them, failed to get any relief from the Goods and Services Tax (GST) Council as the issue was not discussed during the Council’s meeting on Saturday (June 22).

Addressing a press conference after the meeting of the GST Council, finance minister Nirmala Sitharaman said that GST on online gaming was not on the Council’s agenda, and hence there was no discussion on it.

The GST Council’s decision to levy 28% GST on real-money gaming was implemented from October 1 2023. The finance minister earlier said that the decision will be reviewed six months after it comes into effect.

While there were speculations that the GST Council might review the decision in its meeting today, the subject didn’t find a place on the agenda. It is pertinent to note that it has been over eight months since the 28% GST regime for online gaming came into effect on October 1, 2023.

Last year, the GST Council decided to impose a 28% GST on online real-money gaming on the full face value of the bets. This decision faced heavy criticism from industry stakeholders, including gaming startups, industry bodies, and investors, who wrote to the government urging a reconsideration. Despite the criticism, the GST Council remained firm in its decision.

In August, amendments to the Central Goods and Services Tax (Amendment) Bill, 2023 and the Integrated Goods and Services Tax (Amendment) Bill, 2023 were approved by the GST Council. Later, the Parliament approved these amendments.

For the uninitiated, under the new regulations, a flat 28% tax applies to the total value of bets for online games, irrespective of whether they are games of skill or chance. Previously, a lower 18% GST was levied, specifically on the platform fee for skill-based games. For instance, with a platform fee of 20% on a INR 100 bet, the GST under the previous tax regime was INR 3.6 (18% of INR 20), which has now shot up to INR 28.

Several online gaming startups, including Gameskraft, Delta Corp and others received notices to pay INR 1.12 Lakh Cr GST, following which many have moved courts challenging the tax notices.

More than 50% of online gaming companies in India witnessed stagnant or declining revenues after the government imposed 28% GST, a recent report released jointly by EY and US-India Strategic Partnership Forum (USISPF) said, based on the latter’s survey of 12 such companies.

Out of the 12 companies surveyed, only five were able to record revenue growth, while seven companies saw degrowth or had to face stagnant revenues, the report said. 

“In case of degrowth, the decline is as high as up to 50% for two companies. Such decline in revenue growth stands in contrast to an industry which was recording exponential growth rates,” it added.

In fact, several companies have reported that investors backed out of potential deals due to these challenges. GST now consumes 50-100% of revenue for 33% of companies from around 15% in the previous tax regime, surpassing total revenue for some startups and forcing them to operate at a loss.

Before the new regulation came into effect, the Indian gaming industry saw high growth during FY23, with the number of gamers rising 12% year-on-year to 568 Mn. Of these, 25% were paying users, as per a report by Lumikai. This reflected a strong 17% growth in paying users compared to FY22.

The post GST Council Meet: No Discussion On GST For Gaming Companies, Says FM appeared first on Inc42 Media.

The Department of Consumer Affairs on Thursday (June 20) floated draft norms to regulate unsolicited business communication from unregistered telemarketers.

Called the “Draft Guidelines for the Prevention and Regulation of Unsolicited and Unwarranted Business Communication, 2024”, the proposed rules seek to crack the whip on unwarranted communication from unregistered telemarketers and 10-digit private numbers.

The draft guidelines will be open for public feedback till July 21. The rules were formulated by a committee, chaired by the joint secretary of the consumer affairs department, after holding extensive deliberations with relevant stakeholders to curb the menace of unsolicited business calls. 

“… (The) Do Not Disturb (DND) registry has been highly effective for registered telemarketers but the unwarranted communication from unregistered telemarketers and those using 10 digit private numbers remain unabated… The Committee after extensive deliberations suggested a draft framework which was examined by (the) department,” said an official statement. 

The committee comprised representatives from the Department of Telecommunication (DoT), the Telecom Regulatory Authority of India (TRAI), the Cellular Operators Association of India (COAI), Bharat Sanchar Nigam Limited (BSNL), Vodafone Idea, Reliance and Airtel. The committee was chaired by the joint secretary of the consumer affairs department. 

The Fine Print

For starters, the draft norms define the term “business communication”, which is any communication relating to goods or services including promotional and service communication but excludes personal communication. 

The proposed rules also term any communication undertaken without the consent of the end users and not as per the registered preferences of the recipient as business communication. 

“The guidelines are applicable on all persons and establishments who make or cause to make the business communication (maker); engages the maker of such communication; is the intended beneficiary from such communication; and in whose name such communication was made by the maker,” notes the draft. 

The proposed rules also specify other conditions for unsolicited communication:

• Initiating communication through a number series not prescribed by TRAI or DoT
• Sending communication through an SMS header not registered with telcos
• Initiating business communication to customers that opted out of any such communication by registering on the DND Registry 
• Initiating such communication without obtaining the explicit and specific consent in digital form from the consumer 
• Making such communication without clearly identifying the calling entity and the purpose of the call
• Initiation of such communication through an unauthorized employee or agent
• Sending business communication without giving a clear, simple, free, and effective option to opt-out of such messages
• Initiating business communication in contravention of TRAI’s regulation “Telecom Commercial Communications Customer Preference Regulations 2018” 

“The department is committed to safeguarding consumer interests and consumer rights, especially in the increasingly expanding and penetrative consumer space. The proposed guidelines will protect consumers from invasive and unauthorized marketing or promotion of goods and services,” said an official statement.

This comes months after TRAI, in November 2023, issued directives to commercial entities to seek user content before sending unsolicited marketing messages and pesky calls. At the time, the telecom regulator said that it will establish a unified platform for customers to digitally register or revoke their consent.

The draft rules come a year after WhatsApp users in India reported a major surge in incoming international spam calls. Many of these calls included video calls and messages from spammers that lured users with job offers and hefty commissions. 

The post Govt Floats Draft Norms To Crack The Whip On Unsolicited Business Calls appeared first on Inc42 Media.

As electric vehicle (EV) adoption continues to pick up pace globally, startups from India and the European Union (EU) have called for fostering innovation and cooperation in the EV battery recycling space. 

The development came on the sidelines of a startup matchmaking event organised by the India-EU Trade and Technology Council (TTC) working group 2. The event saw both Indian and EU startups pitch their innovative technologies to the group.

Under the collaboration, three startups each from India and the EU will get the opportunity to visit their counterpart countries for a week-long market immersive experience. 

An official statement said that the trip will enable the selected startups to engage directly with interested stakeholders, explore potential collaborations, and gain insights into the local market landscape. “This visit presents prospects of establishing pilot projects, commercial opportunities, and/or co-development initiatives,” the statement added. 

At the event on June 20, an “independent” panel of experts from each side shortlisted 12 startups based on their scientific merit, market readiness, and prospects for cooperation. From the Indian side, six startups were selected – Lohum, LW3., BatX Energies, Evergreen Lithium Recycling, Metastable Materials, and CENALL. 

From these, three Indian startups will eventually be selected for the trip to the EU. 

The virtual event was attended by the likes of principal scientific advisor to the Indian government Ajay Kumar Sood, European Commission’s director general for research and innovation Marc Lemaitre, and the Indian ambassador to Belgium, Luxembourg and the EU, Saurabh Kumar.

The statement said that the initiative aligns with the commitment of the two countries to promote a sustainable agenda, foster innovation, and forge stronger economic relations.

“This matchmaking event today brings together the best talents and technologies in the battery recycling space on both sides, giving them an exclusive platform for exchange, networking, and prospective investments…,” said Sood. 

For the uninitiated, the India-EU TTC was first announced by Prime Minister Narendra Modi and European Commission president Ursula von der Leyen in April 2022. Eventually established in February last year, the council operates as a strategic coordination mechanism that allows both sides to address issues related to trade, trusted technology, security and cooperation. 

While working group 1 is centred on strategic technologies and digital governance, group 2 is focussed on green and clean energy technologies. Group 3 caters to areas such as trade, investment and resilient value chains.

The latest partnership comes at a time when EVs continue to see rapid adoption in the country. Banking on production-linked incentive (PLI) schemes (PLIs) and subsidies, EV penetration in India continues to rise, with two-wheelers leading the race. As a result, a host of big-ticket players such as Ola Electric and Ather Energy have emerged in the segment. 

Powering these are battery recycling startups that have also created a niche in the space as demand for such products grows.

On the policy front for battery recycling, the Centre has promoted energy storage systems through its National Framework for Energy Storage Systems for battery repurposing. Last year, the Ministry of Mines also invited proposals from startups to promote research and innovation in the mining, mineral processing, metallurgy, and recycling sectors. 

As a result, the sector has drawn a lot of interest from investors. Earlier this year, Lohum bagged $54 Mn in a funding round. that saw participation from Singularity Growth and others. BatX Energies also raised $5 Mn in its pre-Series A funding round from Zephyr Peacock and others last year.

The post Indian, EU Startups Pitch For Fostering Cooperation In EV Battery Recycling Space appeared first on Inc42 Media.

After the FAME-II fiasco last year, the government is reportedly set to penalise the electric automakers that opt for FAME-III subsidy, if they do not adhere to the localisation norms laid down under the new scheme.

As per an ET report, the EV companies certifying vehicles for subsidies under FAME-III would have to undergo a techno-commercial audit twice a year to ascertain they are meeting the localisation guidelines. 

A government official informed the publication that in the case of any irregularities to the norm, the manufacturers would be liable to return the claimed government subsidies with an interest, which would be at a rate 3% higher than the marginal cost of funds-based lending rate (MCLR) in penalties.

“We are putting in place a committee with representatives from testing agencies, which will audit every six months whether companies are meeting the localisation norms in vehicles certified under FAME,” the official was quoted as saying. “In the event of non-compliance, they will have to refund claimed subsidies with interest at a higher rate than MCLR.”

It is to be noted that FAME-III is likely to be announced in the upcoming budget next month with an expected outlay of INR 10,000 Cr to keep boosting the adoption of EVs in the country. The upcoming scheme is likely to focus significantly on the adoption of public transport such as ebuses along with two- three- and four-wheelers, while also focusing on charging infrastructure.

The earlier iteration of FAME, the FAME-II, which ended in March this year, was launched in 2019 with a total outlay of INR 10,000 Cr. It was slated to support 10 Lakh electric two-wheelers, 5 Lakh electric three-wheelers, 7,000 electric buses, and 55,000 electric four-wheeler passenger cars through subsidies.

However, following multiple fire-related incidents with EVs in the country, more than a dozen of the top electric two-wheeler players of 2022, came under the government’s scrutiny last year for not adhering to the localisation norms and were heavily penalised.  The most prominent players of 2022 like Okinawa Autotech, PureEV, Hero Electric and Ampere, slowly lost their leading positions in terms of vehicle sales.

Following the misappropriation of the subsidies, the MHI cut incentives under the FAME-II scheme last year to 15% of the ex-factory price of a two-wheeler EV from 40% earlier while also slashing the demand incentive.

The Ministry of Heavy Industries (MHI) also sent notices to the OEMs under the scanner to recover subsidies worth a total of INR 469 Cr for flouting the localisation norms.

The MHI’s decision to put an embargo on some of the manufacturers from listing their sales on the official National Automotive Board (NAB) portal, penalising them, and issuing notices to the OEMs to return the subsidy amounts, led to a huge outcry in the EV industry.

Commenting on the government’s third iteration of FAME, the official told the publication that the objective of the scheme is to support and accelerate consumer adoption of EVs and simultaneously create a local ecosystem to bring their costs down over time. 

“It goes against the very purpose of the scheme if companies do not source locally. It will hinder the development of a vendor base in the country,” the official was quoted as saying.

The post FAME-III Subsidy: Centre To Penalise EV OEMs If Localisation Norms Flouted appeared first on Inc42 Media.

The Centre is likely to review the progress of the INR 10,372 Cr India AI Mission this week to work out various details of the programme.

Citing a senior government official, ET reported that the meeting will focus on several key aspects, including the quantum of viability gap funding required to establish sufficient compute infrastructure in the country, strategies to address the AI skill gap, and the implementation of the IndiaAI Datasets Platform planned under the scheme.

The meeting is likely to be headed by union electronics and information technology minister Ashwini Vaishnaw.

This comes a month after S Krishnan, secretary of the Ministry of Electronics and Information Technology (MeitY), said that the Centre plans to regulate AI in a way that does not deter innovation in the space. 

Back then, Krishnan mentioned that the government would adopt a similar approach to that used while framing the Digital Personal Data Protection Act for preparing AI regulations.

In March, the Union Cabinet approved the IndiaAI Mission with an allocation of INR 10,372 Cr over the next five years. The funds will foster innovation in the homegrown AI ecosystem and implement the Mission’s vision via a public-private partnership (PPP) model. 

Additionally, part of the outlay will be utilised to facilitate funding for emerging AI startups and spur innovation in the sector.

As per the Centre, the allocation will cover initiatives such as IndiaAI Compute Capacity, IndiaAI Innovation Centre (IAIC), IndiaAI Datasets Platform, IndiaAI Application Development Initiative, IndiaAI FutureSkills, IndiaAI Startup Financing, and Safe & Trusted AI.

Among the seven pillars of the IndiaAI Mission, the government aims to provide streamlined funding support for deep-tech startups in the AI space, establish an India AI innovation center, and create an AI datasets platform.

The IndiaAI Mission comprises the following pillars:

• IndiaAI Compute Capacity: It envisions building a cutting-edge, scalable AI computing infrastructure by deploying more than 10,000 Graphics Processing Units (GPUs) through PPP model
• IndiaAI Innovation Centre (IAIC): With this, the Centre is looking to create a leading academic institution to retain top research talent, develop and deploy indigenous large multimodal models (LMMs) and domain-specific models
• IndiaAI Datasets Platform: This platform will be developed by IndiaAI’s independent business division (IBD) and will look to enhance accessibility, quality, and utility of public sector datasets
• IndiaAI FutureSkills: This program will focus on expanding the accessibility of graduate and post-graduate AI programs as well establishing AI Labs to impart foundational-level courses in the domain

The statements come at a time when the usage of AI, especially generative AI (GenAI), is increasing rapidly across the globe. While AI is expected to solve problems across countries and sectors, there are also concerns about its misuse.

Earlier this year, Prime Minister Narendra Modi mentioned the potential for AI misuse without proper training. Prior to that, Rajeev Chandrasekhar, Minister of State for MeitY, announced that the draft regulatory framework for AI would be released by July this year.

The Centre also issued an advisory earlier this year, asking digital platforms to get government’s approval before launching “under-tested” or “unreliable” AI models. However, the advisory was withdrawn following criticism from the industry.

Amid all these, AI adoption is on the rise in the country and a number of AI startups have emerged over the past few years.

Yesterday, Maxim AI raised $3 Mn (around INR 25 Cr) in a seed funding round led by Elevation Capital.

Two days ago, GenAI-powered product photography startup Ayna raised $1.5 Mn (about INR 12.5 Cr) to expand its AI capabilities and scale its team.

The post Govt Likely To Review Progress Of INR 10,372 Cr India AI Mission This Week: Report appeared first on Inc42 Media.

Cracking its whip on the growing number of cases of KYC update scam pertaining to electricity connection, the Department of Telecommunications (DoT) has blocked 392 mobile handsets and issued directions for reverification of 31,740 mobile numbers linked to these phones. 

As per the department, the mobile numbers were being misused by scammers to send fraudulent SMSes and WhatsApp messages containing electricity KYC updates and malicious APK files to gain control of victims’ devices.

“The DoT has directed all telecom service providers (TSPs) for pan-India IMEI-based blocking of 392 mobile handsets misused in cybercrime, financial frauds. It also directed them for reverification of 31,740 mobile connections linked to these mobile handsets,” the DoT said in a statement. 

It said that failure in reverification will result in “immediate disconnection of reported numbers and blocking of associated handsets”.

In many instances, these mobile numbers were being misused by scamsters to perpetuate cybercrimes and financial frauds by sending out SMSes of electricity bill pay reminders while posing as providers like BSES.

The DoT took the action after users reported the suspected fraud communications via the ‘Chakshu Report Suspected Fraud’ facility on the department’s ‘Sanchar Saathi’ portal. After receiving multiple complaints of such scams, the department relied on the AI-driven analysis derived from its Chakshu portal to identify the numbers involved. 

The portal acts as a feed for registering citizen reports of suspected fraud communication received with intention of defrauding the public in the guise of KYC expiry or update of bank account, impersonation, disconnection of mobile numbers, among other malefic activities.

The latest crackdown comes a month after the DoT blocked 200 mobile handsets for their alleged use in nationwide cybercriminal activities related to OTP and digital scams. 

This is in line with the Centre’s ongoing crackdown on online scams. In December last year, the erstwhile Minister of Communications Devusinh Chauhan said that the Indian government had pulled the plug on 5.5 Mn phone numbers obtained using false documents.

The government has cracked the whip at a time when cyber attacks continue to rise in numbers, threatening the Indian digital ecosystem. According to a report by Indusface, cyberattacks grew 261% year-on-year (YoY) in the first quarter of 2024 on account of hackers increasingly targeting less regulated industries.

Not just the general public, startups too have fallen prey to such scams. In September last year, a fraudulent scratch card scheme run by miscreants in the name of ‘AJIO’ saw Delhi High Court directing the Delhi Police Cyber Cell to launch an investigation into the matter. 

Besides, the government has also sought help from the startup ecosystem on the issue. In June 2023, a parliamentary panel quizzed executives of Razorpay, PhonePe, CRED, QNu Labs, among others, to better understand the issue of ‘cyber security and rising incidence of cyber/white collar crimes.

The panel sought views of attendees on various trends in the field of cyber security and measures that could be taken to address related issues. 

On top of this, the DoT also launched a ‘Digital Intelligence Platform’ (DIP) recently for real-time intelligence sharing, information exchange and coordination among telcos, law enforcement agencies, banks, social media platforms and other stakeholders. 

The post KYC Update Scam: DoT Blocks 392 Handsets, Directs Reverification Of 31,740 Numbers appeared first on Inc42 Media.

Amid the rapid increase in digital transactions on the Unified Payments Interface (UPI), India saw the highest increase in the share of alternative payment methods (systems other than cash and bank transfers) in ecommerce transactions in Asia-Pacific (APAC) between 2018 and 2023.

A report by London-based data analytics and consulting company GlobalData said that the total share of alternative payment methods in the country for purchases made online grew to 58.1% in 2023 from 20.4% in 2018. 

“This significant uptake of alternative payment solutions can be attributed to the widespread usage of mobile wallets, largely driven by UPI, which facilitates mobile payments in real-time simply by scanning QR codes,” the report said. 

In the APAC region, only China was ahead of India in terms of share of alternative payment methods in ecommerce transactions at 65%.

It is pertinent to note that Indonesia, Hong Kong, Singapore, and Malaysia also saw rapid rise in alternate payment methods in ecommerce transactions, while Australia, South Korea, and Japan had less than 40% share each. 

The discoveries were made by GlobalData in its ‘2023 Financial Services Consumer Survey’. The survey was carried out in the second quarter of the calendar year and saw responses from about 50,000 people above the age of 18 in 40 countries.

Powering the rise of the alternative payment methods in India is the increasing adoption of UPI. Launched in 2016, the real-time digital payments system has been constantly seeing an increase in the number of transactions.

For reference, the number of UPI transactions stood at 14.04 Bn in May 2024 as against 1.34 Bn in July 2020, which was a record at the time.

Phonepe, Google Pay, and Paytm continue to dominate India’s burgeoning UPI space. In May this year, these platforms accounted for about 94% of the total UPI transactions. 

Meanwhile, ecommerce marketplaces Flipkart and Amazon are also seeing a gradual increase in the number of UPI transactions processed by them. While Amazon Pay accounted for 6.8 Cr UPI transactions in May, Flipkart’s recently-launched UPI service processed 44 Lakh transactions in the month. 

The post Digital Payments’ Share In Ecommerce Transactions Zoomed To 58% In India In 2023: Report appeared first on Inc42 Media.

About one-and-a-half year after receiving the Reserve Bank of India’s (RBI) in-principle nod to operate as a payment aggregator (PA), payment solutions startup SabPaisa (SRS Live Technologies Pvt. Ltd.) has received the final approval from the central bank. 

In a statement, the startup said that the licence will allow it to realise its goal of delivering a seamless, inclusive, and high-performance payment experience. 

“Securing the final approval from RBI marks a significant milestone for SabPaisa… We are poised to harness this opportunity to deliver unparalleled solutions, ensuring our competitiveness and future resilience,” SabPaisa CEO Pathikrit Dasgupta said.

The payment aggregator framework was introduced by the RBI in March 2020. It mandates that payment gateways secure an aggregator licence for acquiring merchants and delivering digital payment acceptance solutions.

When it received the ‘in-principle’ approval  from the central bank in November 2022, the Delhi NCR-based fintech startup said it was looking to scale its offerings to onboard more merchants.

In its latest statement, the bootstrapped startup said that it is seeing a sizable uptick in its top line and is also profitable.

SabPaisa claimed its revenue grew 2X over the past two fiscal years and it expects a similar growth in the financial year 2024-25 (FY25). The startup claims to serve 1.4 Mn cash counters across India. 

Founded in 2016 by Dasgupta, Abhimanyu Jha, Rajiv Moti and Kumar Manish, SabPaisa operates a hybrid payment gateway platform that caters to a wide gamut of merchants. It also offers a number of other payment solutions for recurring, offline payments, among others. 

With the RBI’s approval, SabPaisa has joined the growing list of entities which have received the payment aggregator licence. On Thursday (June 13), Aurionpro Solutions’ arm Aurionpro Payment Solutions said it has received payment aggregator licence. 

Besides, Groww, Amazon Pay, JusPay, Stripe, Tata Payments, Innovit, Concerto Software and Systems, and Mswipe have also received their licences this year. 

As per the data available with the RBI as of June 1, 26 entities, including PhonePe, Reliance Payment Solutions, and PayU, have been granted in-principle approvals by the RBI for payment aggregator licence. On the other hand, the applications of Global Payments Asia-Pacific (India), LivQuik, and Tapits Technologies’ are under process. 

The post SabPaisa Gets RBI’s Final Approval To Operate As A Payment Aggregator appeared first on Inc42 Media.

In a move to boost innovation and sustainability, the Centre has approved grants of INR 50 Lakh each for seven startups in the technical textiles sector under the National Technical Textiles Mission (NTTM).

As of today, eight startup proposals have been approved under NTTM, focusing on sustainability, composites, high-performance textiles, meditech and smart textiles, driving significant advancements in these crucial areas. 

The announcement was made by Rachna Shah, Secretary, Ministry of Textiles, while chairing the 7th meeting of the Empowered Programme Committee (EPC) of the NTTM on Thursday (June 13).

In addition to approving startup funding, the EPC has allocated INR 6.4 Cr to IIT Guwahati. This funding will support the introduction of new technical textiles subjects and the enhancement of laboratory infrastructure within the institute’s Civil Engineering Department.

The grants have been approved under the NTTM’s Grant for Research and Entrepreneurship across Aspiring Innovators in Technical Textiles (GREAT) scheme. This initiative aims to encourage young innovators, scientists, technologists, and startup ventures to transform their ideas into commercial technologies and products, thereby fostering self-reliance in India.

As per GREAT guidelines, to qualify for the GREAT scheme, startups must operate as private limited companies, partnership firms, or LLPs with a turnover below INR 100 Cr in any previous financial year. They should be dedicated to innovating and enhancing existing products, with a focus on potential job creation. 

Additionally, they must be registered under the Indian Companies Act and have been incorporated within the past five years. Startups are required to maintain operational R&D facilities or have affiliations with an incubator.

Launched in 2020, NTTM aims to establish India as a global leader in technical textiles through initiatives that promote research, innovation, and the widespread application of technical textiles across various sectors.

The Centre launched the NTTM to boost local manufacturing in the country. Last August, Inc42 reported that the Ministry of Textiles would allocate 10% of the grant-in-aid to incubators. Additionally, it approved INR 151 Cr in funding for 26 institutes to upgrade laboratories and introduce courses on technical textiles. 

Beneficiary institutes included IIT Delhi, NIT Jalandhar, NIT Durgapur, NIT Karnataka, NIFT Mumbai, ICT Mumbai, Anna University, PSG College of Technology, and Amity University.

The post Centre Greenlights INR 50 Lakh Grants Each For 7 Startups In Technical Textiles To Boost Innovation appeared first on Inc42 Media.

The Enforcement Directorate has carried out searches at 19 locations across Mumbai and Pune and seized movable assets, including incriminating documents, digital devices, cash, bank funds, demat account holdings and luxury watches estimated to be worth INR 8 Cr in connection with the Fairplay App money laundering case.

Fairplay app, a subsidiary of Mahadev Book app network, is alleged to have links in illegal broadcasting of cricket/IPL matches and various online betting activities including results of Lok Sabha Elections 2024.

The probe was initiated based on a First Information Report (FIR) lodged by the Nodal Cyber Police in Mumbai, following a complaint from Viacom18 Media Private Limited.

The FIR cited various sections of the Indian Penal Code (IPC), 1860, the Information Technology Act, 2000, and the Copyright Act, 1957, accusing Fairplay Sport LLC and others of causing a revenue loss exceeding INR 100 Cr (proceeds of crime).

The ED investigation uncovered that Fairplay Sport LLC entered into agreements through foreign-based entities in Dubai and Curacao with Indian agencies representing celebrities.

As per ED, Fairplay collected funds through various shell bank accounts. These funds were then layered through a complex network of bank accounts belonging to shell entities and ultimately accumulated in pharmaceutical companies involved in bogus billing.

“Investigation revealed that funds from these companies have been siphoned off to overseas shell entities based out of Hong Kong SAR, China and Dubai. More than 400 bank accounts of shell entities were found to be used for these purposes which are under examination along with trailing/utilisation of funds collected from the public by Fairplay,” the agency added.

Viacom18 had secured the digital rights for streaming the Indian Premier League (IPL) matches from BCCI for a period of five years. Viacom18’s JioCinema announced that it would stream IPL 2023 matches for free on its app. Around the time when the OTT platform began streaming the tournament earlier this year, FairPlay is said to have pushed ads as well as put up hoardings in Mumbai and other major cities and associated itself with the tournament.

Moreover, illegal sports betting platforms like Parimatch, Betway, 1XBet, Betfair, Crickex, Fairplay and Lotus365 intensified their operations in India during the Indian Premier Leauge (IPL). These websites were offering discounts and hosting ‘treasure hunts’ for match tickets to attract cricket enthusiasts.

Betting and gambling are strictly prohibited under the Public Gambling Act, 1867, and are considered illegal in the majority of regions across the country.

Earlier this year, the Central Consumer Protection Authority (CCPA) also issued an advisory warning celebrities and influencers to refrain from promoting such illegal activities.

The post Fairplay App Case: ED Raids 19 Locations Across Mumbai And Pune, Seizes Assets Worth INR 8 Cr appeared first on Inc42 Media.

Update Note: June 13, 2024; 20:50

After the article was published, Hike sent a statement claiming that WinZO has filed a frivolous case.

“The short answer is that this is a frivolous case aimed at tarnishing our credibility. The fact that they did not get the interim reliefs they requested from the Hon’ble High Court, establishes that the Hon’ble Court did not see any merit in their case,” a company spokesperson said.

Hike also claimed that its Rush gaming app has grown rapidly and has threatened players like WinZO, which prompted this case. “We strongly believe that we will succeed in the Arbitration proceedings like we succeeded before the Hon’ble High Court.”

The company also claimed it worked with WinZO to bring in investors for the latter, and that there were demonstrable differences in Hike’s Rush and WinZO app when it comes to match-making.

The Hike spokesperson added, “WinZO overnight wanted Hike to merely be a financial investor and not a strategic partner as originally agreed. As a part of this exit, non-compete was dropped as WinZO was well aware that Hike was no longer a long term investor in WinZO. The dropping of the non-compete was signal enough that it would be open for Hike to enter the real money gaming sphere. Therefore, to invoke arbitration more than 3 years post the launch of Rush, clearly establishes that all such allegations are an afterthought”.

Original Story: June 12, 2024; 21:26

The legal battle between WinZO and its former strategic investor Hike has taken a new turn as the Delhi High Court has granted WinZO’s request for arbitration and the appointment of an arbitrator.

In an order passed last month, the Delhi High Court has directed WinZO and Hike to submit the source codes of their apps, WinZO and Rush, in sealed covers to the Registrar General. This will allow for future comparisons if needed, the order said.
The sole arbitrator has the power to request these source codes for the arbitration process and will be provided with necessary assistance.

Additionally, WinZO’s algorithm, allegedly copied by Hike, must also be submitted in a sealed cover. If access to the source code or algorithm is required, parties can request the formation of a confidentiality club from the sole arbitrator.

WinZO filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim reliefs against Hike.

The dispute started from WinZO’s allegations that Hike Singapore, through its Indian subsidiary Hike Private Limited, launched a competing app called ‘Rush’ in November 2020. According to WinZO, several key features of the WinZO app have been imitated or copied by the respondents.

WinZO claimed that similar features on the ‘Rush’ app violate its IP rights and misuse confidential information. Additionally, WinZO alleges that Hike Singapore filed a patent application on December 21, 2020, for an algorithm titled ‘A Method And System For Determining Compatible Contenders For A Contest,’ which is claimed to imitate WinZO’s proprietary match-making algorithm.

Therefore, WinZO sought to restrain the respondents from using any of its confidential information or intellectual property.

Inc42 has reached out to both the parties. The article will be updated based on their statement.

The Conflict That Dates Back 5 Years

Back in 2019, WinZO Games raised $5 Mn in Series A funding. The round was led by Kalaari Capital and messaging and payments platform Hike.

As per sources, Hike initially agreed to invest $3.2 Mn for 25% equity in WinZO. However, during the document signing, Hike insisted on receiving 25+1% shares, which WinZO founders granted. Kavin Bharati Mittal of Hike, who was on WinZO’s board, had signed a non-compete and non-solicit agreement.

Differences between WinZO’s founders and the strategic investor, Hike, emerged within weeks of Hike’s investment in early 2019. When WinZO needed to raise Series B funds, Mittal suggested getting additional funds from Hike instead of other investors. WinZO’s founders, seeking to diversify their investor base and bring in more expertise, preferred raising funds from a large VC firm.

WinZO then received a second term sheet from prominent investors at a valuation of $60 Mn post-money. Mittal sought to waive the non-compete clause, assuring WinZO’s founders that Hike would not enter the gaming industry. WinZO’s Series B funding round closed in August 2020, after which the non-compete agreement was waived. Hike launched Rush in October 2020.

In response, WinZO held an Extraordinary General Meeting (EGM) and revoked Hike’s information rights, offering an exit. Hike, having invested $3.2 Mn, received $12 Mn from WinZO.

Hike was founded in 2012 by Kavin Bharti Mittal as an instant messaging app but later pivoted to a gaming platform. Since rebranding, the startup raised capital from crypto investors such as JumpCrypto, Tribe Capital, Republic, Polygon, among others.

Meanwhile, WinZO was founded by Paavan Nanda and Saumya Singh in 2018, WinZO is an online skill-based gaming startup that partners third-party developers to host games on its mobile-based application. It earns revenue through platform fees charged from users for real-money games.

The gaming startup saw its consolidated operating revenue zoom nearly 3X to INR 673.94 Cr in the financial year ended March 31, 2023 (FY23). The Delhi NCR-based gaming major reported an operating revenue of INR 233.89 Cr in the previous fiscal year.

The post [Update] WinZO And Hike’s Court Battle Over Alleged IP Violation Heats Up appeared first on Inc42 Media.

After internally debating the matter, the Karnataka government has reportedly extended the exemption of startups from the provisions of labour regulations for a period of five years. 

As per Economic Times, the state government has exempted new-age tech players, animation, gaming, computer graphics, and other knowledge-based industrial companies from the Industrial Employment (Standing Orders) Act till 2029. 

The report, however, added that the exemptions come with caveats such as mandates to set up an internal committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and a employee grievance redressal committee (GRC).

In addition, the exempted company will also have to furnish reports to local labour authorities about the cases of disciplinary action such as suspension, discharge, termination, demotion, dismissal, among others of its employees.

As per the report, the state government was mulling bringing the technology companies under the purview of labour regulations but opted against it after opposition from concerned stakeholders. The proposal to revisit the norms came after the labour department flagged instances of arbitrary termination, mass layoffs and sexual harassment at work place. 

The latest exemption reportedly looks to allay these concerns by adding caveats that “precisely” define the working and service conditions of employees and mandate startups to comply with relevant procedures before terminating the service of an employee. 

In January 2014, the state authorities issued an order exempting certain tech companies from the standing orders until 2019, with the aim of accelerating their growth and recognising certain industries as sunrise sectors. 

Commenting on the development, the president of Karnataka Employers Association BC reportedly hailed the decision and said that the exemption “would go a long way in developing IT and ITES industries” in the state. 

The development comes as Indian startups continue to reel under the impact of funding winter. As a result, multiple new-age tech companies have resorted to laying off employees in droves to conserve cash and extend their runway. In many instances, thousands of employees have been fired in a single retrenchment exercise while salary payout have been delayed for many others. 

As per Inc42, Indian startups, primarily based out of Bengaluru, have fired more than 37,260 employees since 2022. 

The post Karnataka Govt Extends Exemptions To Startups From Labour Norms For 5 Years appeared first on Inc42 Media.

The commerce and industry ministry is likely to seek more funds for startups in the forthcoming Budget, set to be announced by the new government, in an effort to boost innovation across the country.

As per PTI’s report, the new government may announce the Budget for 2024-25 in July.

The current seed fund scheme, introduced in April 2021 with a corpus of INR 945 Cr is set to end this year and the ministry is considering proposing a new scheme along similar lines.

The Startup India Seed Fund Scheme is among the host of schemes, including the Fund of Funds for Startups (FFS) and Credit Guarantee Scheme for Startups (CGSS), launched by the government during the last few years to expand the country’s startup ecosystem.

The fund, allocated over four years, was designed to provide seed funding to eligible startups through incubators across India.

Back in 2021, the government announced the launch of the ‘Startup India Seed Fund’ to offer financial assistance to startups for proofs of concept, prototype development, product trials, market-entry and commercialisation of products or ideas.

Easy access to capital is crucial for entrepreneurs in the early stages of their enterprises, another official stated. The funding needed at this stage can often determine the success or failure of startups with promising business ideas.

The ministry is also anticipated to propose a dedicated policy for deep tech startups.

Over 1,000 startups were selected by approved incubators under the Startup India Seed Fund Scheme (SISFS) to provide cumulative financial support of INR 177 Cr as of April 30, 2023, the government informed the Parliament last year.

Startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) are eligible to get funding via one of the government-recognised incubators under the SISFS. Startups need to have at least 51% shareholding by Indian promoters to be eligible to get financial assistance under the scheme.

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