Rajesh Mehta, Badri Narayanan Gopalakrishnan, and Srujanee Mishra
It is an opportune time for India to join hands with the US to achieve the dream vision of Atmanirbhar Bharat through technology collaborations and investments with US. In the light of the current geo-political tensions and the impact of COVID-19, it is an opportune time for India to join hands with the US to achieve the dream vision of Atmanirbhar Bharat through technology collaborations and investments with US. Venktesh Shukla, ex-Chairman of TiE Global and the general partner of Monta Vista Capital says: ‘If we interpret “Atmanirbhar” to mean that India will create conditions such that globally successful companies come out of India, that will be a huge win. I hope that “Atmanirbhar” does not lead to a mindset of 60’s and 70’s that inflicted substandard cars like Ambassador in India.’
The biggest US Technology companies in Silicon Valley like Google, Facebook, Amazon, have invested around $17 billion in India since the start of 2020. This could be a turning point in the US-India relationship as they capitalise on the large Indian digital market. The Trump administration is making is harder to bring the best talents from the world to Silicon Valley. This can be an opportunity for India to improve its R&D ecosystem to attract, encourage and nurture the best brains in the world.
India needs to start working from the root of the problem, the education and innovation infrastructure of the country. MR.Rangaswami, Founder of the Sand Hill Group and Indiaspora, says: ‘US tech companies have invested billions of dollars into India in the past few months and this bodes well for a lot more future investments from MNCs, private equity and venture investors. India should leverage this opportunity by streamlining regulations and setting clear tech policies. This decade can be the golden one for India!’
Chinese smartphone companies have an 80% share in the Indian market. In addition, most of India’s biggest and most promising start-ups have considerable Chinese investments. This is the time for US to invest into the promising digital market of India.
The need of the hour is working towards developing competitive 5G technology. US-India can join hands in order to counter Huawei. While US has a few small start-ups working towards 5G, there are concerns US needs to address. A telecommunication company in an emerging market needs a networking company to provide the entire package of cell towers, electricity generation, antennas etc.
While most Chinese vendors are ready to provide full financing as they are supported by state-controlled financial institutions. US companies do not receive enough financial backing most of the hardware is not even manufactured in US, but in China. Reforms that incentivise these start-ups to manufacture majority of the content in the US can help encourage US companies to buckle up and compete against Chinese competitors, it is not the most cost- effective. Working with India will give it access to a huge population of young, tech talents who can work towards the same goals and come up with innovative technology that may surpass China. Jio is a promising player in future 5G technology, as it has claimed to not have depended on Chinese crutches and has even been tagged a ‘clean’ teleco. Also, its advancements and partnership with tech giants like Google may provide a solution to the current 5G conundrum, as it leads the way for more US investments to the same end.
Due to recent events, many foreign companies are looking to shift their base from China to India. While India has the potential to develop in manufacturing, it needs adequate foreign investments and technology transfers. A favourable climate has to be created for foreign investments in order to recover the economy from the pandemic and work towards self-reliance. There are several roadblocks to countries wanting to diversify their supply chain and shift bases to India, however. India is not well- integrated with the global supply chain. For instance, India is not a part of RCEP. This makes it harder for exporters in India to have tariff- free access to destination markets and offer reciprocity to trading partners. India lacks infrastructure, such as large ports and highways, top-notch labour quality and sophisticated logistics. Also, India has to make several structural reforms to improve its Ease of Doing Business as a lot of MNCs are gravitating towards countries like Vietnam.
The most promising industries for collaboration lie in aerospace, aviation, defence, pharmaceutical and agricultural sectors. It is in the best interests of US to tap into India’s vast potential in developing defence technologies in tandem. India has achieved a lot in the arena of space technologies (rocket and missile), cyber technologies and is also advancing rapidly in AI. Co-operation is not only creating innovative technologies in these arenas, but also create a network of high- level researchers in all three countries to share knowledge and make technology transfers much easier.
While India is known as the ‘pharmacy of the developing world’, it imports almost 70% of Agents Pharmaceutical Ingredients from China since it is more economical. If India decides to do away with Chinese imports, it needs to source indigenous raw materials and all phases of intermediary goods, as well as develop indigenous technology in order to maintain competitive costs. It also needs innovative reforms and technology in sectors like agriculture, which could potentially be the biggest arena to collaborate with US as it is a global leader in agricultural innovation.
India is working towards creating a business climate suitable for foreign investments. In the Ease of Doing Business Index (2020 report), India has improved by 23 places to the 63 rd position. India has inviting FDI in the agricultural sector, health sector, technology driven sectors and even the aviation and defence sectors. The future seems optimistic as, eminent scientist Dr Ragunath Mashelkar says, ‘Indo-US partnerships, in today’s context, have a great opportunity to use the powerful force multiplayers of talent, technology and trust to create mutually reinforcing exponential growth, like never before in history!’
Rajesh Mehta is a Leading International Consultant & Policy Professional. Badri Narayanan Gopalakrishnan is founder director, Infinite Sum Modelling, and affiliate faculty member at University of Washington Seattle. Srujanee Mishra is a researcher at Infinite Sum Modelling.
This article was originally published in The Financial Express.