Making Money Online in India gets tougher

It has been only a week since PayPal India stopped processing all money transactions to personal accounts in India. They have also blocked the withdrawal of available funds. Apart from receiving the AdSense checks, most of the Indian bloggers and freelancers would have used PayPal for online money transfers and hence the future of their hard earned money remains uncertain.

A lot of people think that making money online in countries like India is a really easy to do thing. Indeed, it’s so easy to get started but with all its related risks (Read Online business risks) and a lot more related uncertainties.

Online Business Models

Most online money makers in India (and several other Asian countries) work mainly around the following business models

  • Blog on internationally accepted topics and drive US traffic and earn money via advertisements (mainly AdSense and sometimes other networks and private ads)
  • Writing services and other related freelancing opportunities
  • Specialized services – graphics, banners, themes, other web development services
  • Selling goods via eBay
  • Online forex trading etc

As far as I know, not many Indians are keen on doing affiliate marketing or any MLM stuff. However, even for the most harmless (and capital investment free) areas such as blogging to make money online there are hurdles and ongoing issues.

Main hurdles and issues

When it comes to one’s online rights, India is not as bad as China. Nobody really blocks or censors websites in India. However, there are other areas where policies – mainly from the government – prevent people from doing free mode online business from India.

The main issue here is the strictly controlled foreign exchange policy. I would assume that the recent PayPal issues are mainly around the RBI (Reserve Bank of India)’s guidelines related to the foreign exchange policy. Due to the same reason, even online currency trading is not possible from India. All that is legally permited is the futuress trading of currencies – that too only USD-INR pair on wide spreads.

The high rate of Income tax is another key issue that freelancers pay here assuming that they are paying taxes in India for their online income. The rate of income tax is 30% for the higher income groups and to make it worse due the huge difference in USD buy/sell rates, most people end up loosing a lof of money in exchange rates as well.

Ban from the major online income contributors such as Google AdSense is another big issue. Most of those people who get banned by AdSense are from this part of the world (many for valid reasons, I must add, but not all).

Lack of proper cyber crime enforcement is another big issue here. Usually, only when some high profile issue happens, the cyber squad gets into action. If somebody is hacking to your online accounts or even defame your online business’ goodwill for that matter, nobody really cares.

Way forward

In my opinion, if you are completely depending on your online income to support your financial needs, you may need to think twice now. It’s not going to be very easy for anyone to continuously innovate and sustain the online income models. Online business (especially blog income) can be thought of as an additional income but never the only thing or primary income stream that you should be banking on. It’s time to find an offline regular job, if that is not the case already.

Happy Money Making!

Comments

  1. I have just started looking at India as a means of introducing into the Uk market as I know you guys are entrepreneurs in your hearts.

    Paypal seem to make the rules up as they go along, I have had trouble with them in the Uk, they don’t mind small amounts of income, but when it comes to large deposits they freeze my account. I had to find an alternative, which turned out to be a Canadian source.

    Stick with you guys, what you need is your own paypal equivalent.

    Keep up the good work Ajith.

    • Robert, thank you for your comment and sharing your experience. I am not against compliance but there are couple of other things that PayPal do which I do not like – like the exchange rate mismatch, service fee etc.

  2. why paypal blocked, i m really tired for the sake of paypal pls help me

  3. Ankur Khanna :

    Hey guys!

    India is finally into Online Money making and I’d love to share some information about Affiliate Marketing. Earlier I was making money via Google Adsense, until I found a better way of monetizing my site.

    I joined as an affiliate at OMG India which is, I think, India’s #1 Affiliate Marketing company. All you need to do is sign up and they’ll give you banners and affiliate materials from over 50 campaigns which is great.

    I have a blog in consumer electronics niche and I put up some ads over there and I gotta say – Making money from affiliate marketing is way better than adsense.

    In case you guys are wondering, you can find more about OMG India via in(dot)omgpm(dot)com

    I look at 3 things when I join an affiliate network –

    1) Payments on time
    2) lot of campaigns to choose from
    3) Support.

    And personally, they have been able to satisfy me in all these areas.
    To those who are finding better ways of making money online, I’d really suggest affiliate marketing.

    Just my 2 cents 🙂

  4. Hi, Is hindrance still continuing whereas payment via pay pal in India?

Trackbacks

  1. […] | March 13, 2010 | Internet Marketing, News Analysis, Online Money Making Looks like the recent PayPal India chaos – whereby the personal account holders couldn’t withdraw money to Indian banks – has […]

  2. […] an year back I had wrote about how making money online from India is getting tougher. Things are getting even worse with PayPal and RBI further tightening the Forex inflow norms for […]

Leave a Reply to sanjay Cancel reply

*