Indian Prime Minister Narendra Modi’s upcoming visit to the United States has enthused his Indian-American supporters in Silicon Valley who have helped with his schemes such as Digital India and Startup India.
Modi will be at the White House on September 24 to participate in a Quad leaders’ summit followed by his address at the 76th UN General Assembly the next day.
We reached out to Venktesh Shukla, founder & managing partner at Monta Vista Capital and former chair, TiE Global, to know of his expectations from Modi’s visit.
Shukla, who then TiE Silicon Valley president, had in September 2015 hosted a “Digital India Dinner” (photograph on top) for Modi, involving 300 movers and shakers from Silicon Valley. CEOs of tech giants such as Adobe, Cisco, Qualcomm, Microsoft and Google had attended the event.
The geopolitical situation arising out of the Afghanistan pullback is expected to occupy the centerstage, and so is the discussion about the Quad, India’s role in it and the nature of the response to the threat posed by a restless China in the Indo Pacific region.
However, the threat of “Countering America’s Adversaries Through Sanctions Act” (CATSAA) if India goes ahead with the S400 Russian anti-missile defense system is a hurdle.
Asked if there had been any movement on trade since Modi’s last visit in 2019, Shukla said a number of trade and economy-related issues should also come up for discussion.
That the two countries still do not have a preferential trade agreement is a matter of concern, he pointed out. The Trump administration had withdrawn the preferential trade treatment to exports from India and embarked on a negotiation to come up with a new one.
“So, it is high time that we have a new one now,” Shukla told indica News. “Given the explosion of innovation in India in space and energy, it will be an immense win-win proposition if the two countries set up an arrangement to fast-track innovation coming from India into US Departments of Defense, Energy and Space.
“There is a congruence of strategic interest among India and US and it makes eminent sense to open up government agencies in US to innovation from India,” Shukla said.
The day after the Digital India Dinner in September 2015, TiE SV co-hosted with Nasscom around 30 startups from India that were at the cutting edge of innovation, he said.
“The PM was exposed to these startups for the first time and he was captivated by the boldness of their thoughts and the scale of problems they were attacking,” Shukla said.
Shukla is on the Startup Advisory Council chaired by India’s commerce minister Piyush Goyal.
Asked if was pleased with the way the startup culture has come up in India, Shukla said: “I would say while India has tasted success, it is far from reaching its potential.
“I still remember how we contributed to the development of this policy framework while working with Amitabh Kant, chief executive officer of NITI Aayog,” he said.
“Startups are one thing that has gone extremely well for India in the last five years since Startup India was launched. Depending on how you count, there may be 40-60 unicorns in India and at least 25 of them became unicorns this year. The global money is pouring into any Indian startup that is showing reasonable traction. There is no shortage of growth-stage capital for successful startups in India.
“But the constraint is the limited number of angel investors,” Shukla added. “By one count, there are only 6,000 angel investors in India. This number needs to be at least 100 times bigger. This is one area where the government has a big role to play in its taxation policy. It is more tax-friendly to invest in the stock market than it is to invest in startups. This needs to change.”
He pointed out that in the US, investment in startups qualifies for tax exemption up to $10 million of profit.
“Look at the tiny country of Israel,” Shukla said, adding: “2500 companies from Israel have gone public or been acquired by US companies in the last 20 years or so. India, being 150 times bigger, should aspire for much more.”