The Indian Internet sector has seen a wave of Chinese capital inflows in recent years, as many advanced Internet companies and venture capital funds seek to tap into the expanding market of the world's second-most populous country, a report released on Thursday said.
The flood of funds appears to be sparking concerns in the Indian business community, and it's prompting calls for more collaboration with local companies.
Between 2015 and 2016, Chinese Internet companies and others invested $4 billion through 18 strategic investment or merger and acquisition deals, according to the report from Chinese venture fund and market information provider ZDream Ventures.
The deals included high-profile transactions involving some of the largest Chinese Internet companies, including online travel agency Ctrip's $180 million investment in India-based Makemytrip and ride-hailing app Didi Chuxing's $30 million investment in India's ride-hailing app Ola. Other Chinese Internet giants such as Alibaba Group and Tencent have also made investments.
Arriving at a time when European and US capital adopted a "conservative" approach in India, Chinese investors saw great opportunities in India, the ZDream report said, adding that the flood of Chinese capital was followed by a heavy presence in India's Internet sector.
More than 50 percent of Indian Internet users have used or are using online products and services originating from China, according to the report, which was released at a China-India Internet conference in Beijing.
"The cooperation we are seeing now is just the beginning. It will be continuously enhanced in the next few years," Shri Amit Narang, deputy chief of mission at the Embassy of India in Beijing, said at the conference, "Our message to the Chinese people is very straightforward: go invest in Indian, go create in India, and innovate in India."
Chinese companies still have a strong interest in the Indian market. "I believe that for any Chinese company in any sector, India's huge market and opportunities can't be ignored," Xiang Feng, CEO of Chinese logistics company YTO Express, said at the conference.
However, the increasing investment is a double-edged sword, Satyan Gajwani, vice chairman of Indian company Times Internet, told the Global Times on Thursday on the sidelines of the conference.
On the one hand, Chinese investors bring capital, experience and opportunities that "really excite us," but on the other hand, their heavy presence has also drawn some concern, Gajwani said.
"The concern a lot of Indian entrepreneurs have today is that the biggest Internet companies in the country are not Indian," he added.
Gajwani said that Chinese companies should be more localized and collaborate with local companies in the development of India's backward ecosystem, and not pursue a model that is a "Chinese-driven or Chinese and US-driven" one.