Is Capital dumping really happening in India?

These days the Indian startups are going through a huge ruckus due to a parasite named ‘Capital Dumping’. It all started last year during the month of December when Indian e-commerce giants, Flipkart and Ola outstretched voice against American colossuses, Amazon and Uber respectively; appealing the government for protection against them regarding the parasite.

If you are scratching your head on what Capital Dumping means – well, it’s selling exported products in the foreign market at a lower price in comparison to that in domestic market. Capital Dumping is a kind of price discrimination which occurs when the manufacturers lowers the price of products in the foreign markets than in the domestic market. Basically the purpose of this procedure is either to increase the market share in a foreign market or to drive out competition. According to WTO (World Trade Organization) dumping is convicted if it causes or threatens the domestic industry in the importing country.

Its effects on the Indian startups is that- More demand is being created for Chinese products during festive seasons thus reducing the sales of Indian products, increasing competition for small and medium units in the country, domestic units shutting down due to these cheap foreign products, distrust among consumers due to low quality and increasing imports-decreasing exports, thus, more flow of income outside the economy.

Chief executive officer of ANI Technologies Pvt. Ltd., BhavishAggarwal, who owns Ola, believes that it has become a war-like situation in India, a corporate war between the Indian startups and the American invaders, taking away money from our economy to their country thus, asking government to come with some measures.

To our wonder today it has somewhat become an ironical situation in our country wherein government is coming up with programs like Make in India; where it allows both national and multi-national companies to manufacture their products in India, but at the same time there have been instances where the local startups are facing problems because of these MNCs (Multi-National Corporations), similar to Ola-Uber case and no solutions have been provided by the government yet.

Hence, again our country is being assaulted by foreigners though in a different manner, therefore we should come up with some strict policies in such crisis situations. We shouldn’t let others exploit our ‘golden bird’.

Do share your thoughts about such commercial war prevailing around the world and how helpful it is in our comment section below.

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