Netflix Under Scrutiny: India Probes Streaming Giant's Business Practices

Netflix, the global streaming powerhouse, faces increasing scrutiny in India, a crucial market for its expansion strategy. The Indian government has launched an investigation into the company's business practices, examining various allegations that could potentially impact its operations in the world's second-most populous nation.

According to a government email dated July 20, 2022, sent to Nandini Mehta, a former Netflix executive, Indian authorities are looking into several issues concerning the streaming giant's conduct in the country. These include:

• Visa violations
• Tax evasion
• Illegal structures
• Racial discrimination

The email, sent by Deepak Yadav from the Foreigners Regional Registration Office (FRRO) of the home ministry in New Delhi, requested Mehta to provide details and documents related to these allegations. This development sheds light on the growing challenges Netflix faces in India, where it has approximately 10 million subscribers.

Netflix entered the Indian market in 2016, recognizing its potential for growth among the nation's 1.4 billion people. Since then, the company has invested heavily in producing local content, including popular Bollywood-inspired series and films. However, this expansion has not been without hurdles.

The streaming giant has faced controversy over content deemed insensitive by some Indian viewers. In a recent incident, Netflix was compelled to add disclaimers to an Indian series about a plane hijacking after social media backlash and government criticism over the portrayal of Muslim hijackers as Hindus.

While Netflix has been aware of an ongoing tax dispute in India since 2021, the broader scope of the investigation, including allegations of visa compliance issues and racial discrimination, had not been previously disclosed. The company maintains that it is "unaware of an investigation by the Indian government."

"I welcome the Indian investigation and hope the authorities make their findings public."

Mehta, who worked for Netflix from April 2018 to April 2020, is currently pursuing a lawsuit against the company in the United States. She alleges wrongful termination, racial discrimination, and gender discrimination – charges that Netflix vehemently denies. The company counters that Mehta was fired for misusing her corporate credit card for personal expenses.

This investigation comes at a time when Netflix is facing various challenges globally. The company has recently implemented measures to prevent password sharing and has been experimenting with new content formats to maintain its competitive edge. In India, Netflix competes with local streaming services like Hotstar and JioCinema, forcing the company to adapt its strategies to the local market.

As the investigation unfolds, it remains to be seen how these allegations will impact Netflix's operations in India. The outcome could have significant implications for the company's growth plans in this key market and potentially influence its global expansion strategies.