Conceptualizing Scope of International Commercial Law in Stimulating Venture Capitalism in India. A Comparative on Policies Undertaken in USA, Israel, China

Abstract

Globalisation has brought about a world of opportunities, one of these opportunities relates to Venture Capitalism. The central research question in this research paper is to find what violates commercial law, what constitutes commercial law, how was commercial law manifested, what are the efforts made by autonomous institutions to bridge internationally accepted grounds of business law. Further to examine this question and to highlight the approach. I have taken examples of countries like the United States, Israel and China to show the evolution of venture capitalism and international business laws, governing it. Innovation is a key driver of productivity and long-term growth and can help solve social challenges at the lowest possible cost {Organisation de cooperation et de developpement economiques (OECD), 2015}. Innovation in small and medium sized enterprises (SMEs) is at the core of inclusive growth strategies: more innovative SMEs are more productive SMEs that can pay better wages and offer better working conditions to their workers, thus helping reduce inequalities. Furthermore, recent developments in markets and technologies offer new opportunities for SMEs to innovate and grow. Digitalization accelerates the diffusion of knowledge and is enabling the emergence of new business models, which may enable firms to scale very quickly, often with few employees, tangible assets or a geographic footprint (OECD, 2017). SMEs are, on average, less innovative than large companies. For example, across OECD countries, the median value in the national SME share of business R&D is 35%. Moreover, small firms (10-49 employees) are approximately only half as likely as large firms to have a business website allowing for online ordering and only one-third as likely as large firms to be using Enterprise Resource Planning (ERP), a software platform that integrates core business processes in real-time The importance of innovative SMEs is incomparable and the need of venture capital investment is linked to these SMEs. It will be interesting to take a closer look at the regulatory framework of venture capital in the India. This leads me to my research question for this thesis: ‘How is the venture capital industry in India developed and what can the Indian government do to stimulate the venture capital industry in an effective way?’ This thesis is divided into an introduction to venture capitalism, four chapters and a conclusion. In the first chapter, I will explain venture capital and its trends over the years. Chapter 2 analyses the role of the government in flourishing venture capital markets located in the United States, Israel and China. Chapter 3 analyzes the role of the Indian Government in the venture capital market and some suggestions on how to improve upon promoting venture capitalist in India will follow in chapter 4. These four chapters are followed by a conclusion.