So, where will Indian start-ups find alternative capital? “Given the large presence of the Chinese, it may be difficult for funds from other jurisdictions to immediately fill their shoes,” said Atul Pandey, a partner at a law firm which represents Chinese investors in India. The standoff has already spurred some uncertainty. Dealmakers say that funding rounds involving Chinese investors closed faster than those with Western companies. And more important, Indian start-ups had hoped to emulate and learn from the mobile-first evolution of the Chinese market so they could follow the same trajectory. So the unexpected and quick decoupling with China's tech giants has undoubtedly caught many off guard. But strategic investors from other parts of the world will eventually return post-Covid-19, even if the Chinese don’t, experts say. They point to the fact that India is still the largest market for internet companies with China closed off for years. And during the coronavirus lockdown, India attracted nearly $20bn in foreign capital from Silicon Valley companies like Google and Facebook, and global private equity giants such as AIDA, KKR and General Atlantic. But most of that money went to billionaire Mukesh Ambani’s telecoms venture, Jio Platforms, and not to fledgling start-ups. So India may have to create domestic capital to fill the void left by China.
Nikhil Inamdar, ‘India start-ups flounder as tensions with China rise’, BBC