It was a busy and interactive day for technocrats at the Four Seasons Hotel Silicon Valley at East Palo Alto, California. After all, they were meeting India’s minister for commerce and industry Piyush Goyal and getting the opportunity to speak with directly on concerns they face doing business in India.
Some of the issues raised by venture capitalists, entrepreneurs and policy research organizations included simplifying the process for setting up a start-up, giving tax incentives, raising and structuring funding, building an ecosystem around chip manufacturing, direct investment in the stock market, and even encouraging SpaceX for internet coverage.
Khanderao Kand, founder of GITPRO, a networking platform of Indian-origin technocrats in Silicon Valley, suggested in a letter that “for most of the Indian start-ups, US is the biggest market. And often also the only source of capital as they scale. Many have incorporated in US as a Delaware entity. These start-ups when successful bring tremendous wealth and experience to India. Hence when crafting the start-up policies, we request the government to focus more on enabling such start-ups and take Silicon Valley inputs, from start-up incubators and organizations Falconx, TiE Silicon Valley, GITPRO before making significant changes.”
The letter suggested how the Indian government could enhance technological capabilities and use satellites such as SpaceX for internet coverage. Kand also highlighted other segments and touched on transportation and real estate.
Another suggestion was to use Intel’s and Brookfield’s collaboration for their Chandler Fab in Arizona. The letter asked the Indian government to explore a law similar to the Chips Act that provides incentives to local high-tech manufacturing.
To be sure, Brookfield Infrastructure Partners and Intel have decided to jointly invest up to $30 billion in its manufacturing expansion project at its Ocotillo campus in Chandler, Arizona, with Intel funding 51% of the project cost and Brookfield the remaining.
Sanjit Dang, venture capitalist and co-founder of U First Capital, asked about growing B2B start-ups in India and how start-ups, in general, can drive India’s GDP growth.
“We also asked if tax incentives can be provided to entrepreneurs but he (the minister) said no, reasoning that the world needs to focus on the huge revenue opportunity in India rather than tax benefits,” Dang told indica.
Dang said he also brought up with Goyal if India should utilize Elon Musk’s satellite-based internet service Starlink by SpaceX for its rural areas. But Minister Goyal stated SpaceX needs to get cheaper than India’s mobile infrastructure. Then we are happy to explore collaboration with them. SpaceX needs to not just look at India as a market, but also create jobs locally.
Minister Goyal talked about the power of India’s huge market, led by a young aspiring population.
Goyal estimated that India will achieve a GDP of $30 trillion in the next 30 years. India’s GDP in 2021, according to the World Bank, was $3.17 trillion. Last week, India ($3.53 trillion) crossed the UK ($3.38 trillion) as the fifth largest economy in the world behind the United States ($25.35 trillion), China ($19.91 trillion), Japan ($4.91 trillion) and Germany ($4.26 trillion).
Balaji Thiagarajan, chief technology officer (CTO), LendingClub, told indica that Goyal talked about India’s GDP growth and how the country plans to reach $30 trillion soon. “That is amazing growth,” Thiagarajan said. “His focus on was the macro economy. The minister said that India was going through a lot of change within the country and that we are not perfect.”
Thiagarajan said his fintech company has an interest in investment in India but access to government policy for investment in India is not clear.
“The problem is data residency and access to data for non-US citizens in fintech is a sensitive topic,” Thiagarajan said. “At some level we have to find how can government can help in brining supportive policies. So, we have not invested and we don’t know enough how to do business in India and with the restrictions we have, America’s and India’s policy frameworks in this regard have to come together. The US policy is clear but India’s is not clear yet.”
Thiagarajan was impressed with Goyal, though. “From what I heard, he is a minister who his feet on the ground, and is aware of what India needs to do.”