India’s tech sector poised for phenomenal growth: Ashwini Vaishnaw at HTLS

Oct 31, 2023 07:07 PM IST

HTLS 2023: Union minister Ashwini Vaishnaw said he sees significant gains in exports of hardware, including sophisticated microchips

NEW DELHI: India’s technology sector is poised for phenomenal growth in the coming decades, minister for electronics and information technology Ashwini Vaishnaw said, citing the country’s foundation of talent, its recent success in 5G roll-out, and the government’s focus on enabling and predictable policies.

Union electronics and information technology minister Ashwini Vaishnaw in conversation with R. Sukumar, editor-in-chief, Hindustan Times during the Hindustan Times Leadership Summit, in New Delhi, India, on Tuesday (HT Photo)
Union electronics and information technology minister Ashwini Vaishnaw in conversation with R. Sukumar, editor-in-chief, Hindustan Times during the Hindustan Times Leadership Summit, in New Delhi, India, on Tuesday (HT Photo)

In a conversation with HT’s editor-in-chief R Sukumar in virtual session that kick-started the 21st edition of the Hindustan Times Leadership Summit, Vaishnaw said that he sees significant gains in exports of hardware, including sophisticated microchips, and solutions that can help the world bring technology to the people.

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“Our country has so many good engineers, we are so good at design. We are designing for the world, practically every large company in the world as a tech centre in India. And that phenomenon, if we can translate into manufacturing in India, then. it can be a phenomenal growth story,” said Vaishnaw in the session that was broadcast on Tuesday.

The Union minister said that from a position where electronics manufacturing was a minuscule portion of the country’s factory output a decade ago, the sector today has surpassed 8 lakh crore in output value.

“The biggest difference was stable policy, a clearly defined incentive regime, and a very clear focus on removing the unnecessary compliances and the results speak for themselves,” he said.

Vaishnaw said that a large and what may be underrated aspect of the sector’s potential is design and allied industries. Design, in particular, is often not taken into account while computing an industry’s output, but it is a domain in which India is laying down crucial groundwork.

“Take, for example, when Google announced it will begin making its Pixel phones in India. If you look at it plainly, the numbers may not be much. But the design of the Tensor chip, which is at the heart of the phone, was designed in India. Today, it is fabricated outside, but tomorrow, it will even be fabricated in India,” the minister said, referring to an announcement at the Google India event earlier this month.

Fabrication refers to the process where microchips, or semiconductors, are lasered on to silicon wafers. The Union government launched a semiconductor mission in 2021, which includes incentives and tax breaks for companies that decide to build manufacturing facilities.

“Our biggest strength is design. The second biggest is green power. And the third is the ability to handle very complex chemicals. These place us in a sweet spot where we do not only design but also manufacture chips,” he said.

The minister cited the case of Micron, an American semiconductor company that has finalised plans for a $2.75 billion manufacturing facility in Gujarat. This, Vaishnaw said, has already kick-started an allied industry.

“Already five large component manufacturers have decided to set up their base in India.”

Supporting these are investments in infrastructure. “The huge investment in infrastructure is reducing the overall cost of doing business, in terms of your shipping time, in terms of your internal logistics, in terms of the cost of power -- all those things are reducing rapidly,” he said. The minister, however, added that the semiconductor industry was complicated and India will need to move forward carefully.

Vaishnaw also used the example of 5G, or fifth generation communications technologies, and telecom -- a domain with “a great turnaround story” -- as examples of both the advances as well as potential of the Indian technology sector.

“It is because of the telecom equipment that the 5G roll-out is so good [in India]. Most of the equipment are designed in India, manufactured in India for Indian conditions and then exported. [There are] 70 countries to which telecom equipment is getting exported. That’s the sort of change that has come,” he said.

The minister spoke on the digital public infrastructure (DPI) initiatives that he said were a “great success story” of collaboration between public and private sectors. “When the Prime Minister launched Digital India, the thought process was to create an ecosystem where the public and the private sectors can collaborate in a way that opens up digital technologies to a large number of people, which opens up the creative energies of the people and which democratises,” he said.

This, he said, was different from the approach in developed economies that follow a trickle-down model, where technology first becomes available to the affluent. “So today we have a concept which is established, proven, rolled out on a large population scale, and accepted by the world as the way forward for digital solutions for societies,” he said.

At the core of the concept, Vaishnaw explained, was the State, using public funds, building platforms that are interoperable, and atop which private stakeholders develop products and services. Using the example of the unified payments interface (UPI), Vaishnaw said such an approach had brought down transaction costs --- “from what used to be about $8 for a typical transaction, it now costs few cents”.

Tying this together is a policy approach that Vaishnaw described as breaking away from the “two big thought processes in the world”. “If you look at it globally, one process is huge control, strong guardrails. And the other is a totally liberal approach with no control. Both ways are imperfect.”

India, he added, is creating a “better solution”: a regulatory framework “that makes sure innovation is getting its due and also ensures people’s rights and security are properly managed”.

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