Focus on the future, tech experts tell Indian minister Piyush Goyal

Ritu Jha-

India’s tech industry must now add a high technology (often called Deep Tech) segment, which is today largely the preserve of advanced economies. That was the view of Professor (Emeritus) Arogyaswami J Paulraj, Department of Electrical Engineering, Stanford University, California.

Paulraj made a presentation to Piyush Goyal, India’s minister of commerce and industry, at Stanford University during the latter’s visit to the San Francisco Bay Area this past week. Paulraj serves on the Indian Prime Minister’s ‘India Semiconductor Mission (ISM)’ advisory committee, set up in April 2022, to drive India’s strategy to develop semiconductors and display ecosystems.

The committee is mandated to provide key inputs to build a resilient supply chain, promoting investments, financing mechanisms, global engagement, research and innovation, among other things.

Paulraj told indica this was a smaller meeting and that Goyal, a very articulate cabinet minister, spoke on closer collaboration between Stanford University and the Indian government on energy and tech policies. Goyal also had a brief meeting with energy expert Arun Majumdar, the Jay Precourt Provostial Chair at Stanford University.

“Minister Goyal talked about India’s success in LED lighting, renewable energy, satellite imaging, e-commerce and fintech,” Paulraj said. “He also spoke on the need for better north-south equity in TRIP (pharma licensing), mitigating climate change, etc.”

In his presentation, Paulraj said: “Some major sectors in deep tech include core information technology (semiconductors and systems for computing, telecom, and AI), advanced instrumentation, commercial jets, and patented (branded) pharmaceuticals. Deep tech is likely to soon include areas like quantum computing, genetics-informed medicine, and advanced materials.”

He said Deep Tech has these main characteristics:

  • A highly skilled workforce with the majority of MS or Ph.D. trained engineers
  • A strong intellectual property profile to protect R&D investments
  • A high-intensity (R&D investments as a fraction of sales), global reach with markets, supply chains, and R&D operations spread worldwide
  • A deep foundation of world-class research universities and labs that generate fundamental breakthroughs to feed this industry.

Though several Foreign Headquartered Companies (FHCs) in deep tech have R&D operations in India, the real economic and strategic strength of the country also needs deep tech firms with headquarters in India, Paulraj said.

“No doubt, it is a challenging task, but it is also a clear opportunity,” Paulraj said. “Happily, several factors are falling into place: Prime Minister [Narendra] Modi’s leadership and commitment, the growing skills base in the country thanks to large R&D operations by FHCs, increasing interest from financial and corporate sectors to invest in this sector, and a recent trend of experienced engineering and entrepreneurial talent abroad to relocate to India.”

Goyal, who has been in US since September 5, attended the two-day Indo-Pacific Economic Framework (IPEF) session held on September 8 and 9.

IPEF is itself based on these pillars – Fair and resilient trade (encompassing seven subtopics, including labor, environment, and digital standards), supply chain resilience; infrastructure; clean energy, and decarbonization; and Tax and anti-corruption.

Asked if the CHIPS Act becoming law could help India, Mukesh Aghi, the president and chief executive officer of the US-India Strategic Partnership Forum, was unequivocal: “Yes, it does, you have two large factories coming up in Ohio and Arizona. They are going to focus, on seven nanometer high chip production. India can be focused on 25 nanometers… Most of the design will happen in India.”

Aghi said, “I don’t think the issue is funding; the issue is helping clear the ecosystem so that these companies design and manufacture in India. The government [of India] has set up a large amount of funding, an incentive plan to take it forward and they [the semiconductor firms] have offices in India.”

On Goyal moving ahead on the trade deal with the US, Aghi told indica, “It gives you a pick-and-choose option. It is not a rigid trade economic agreement. It makes it easy for countries [to decide] if they are ready or not.”

Aghi said that while policy and framework may not align, the overall trade between the two countries is increasing. He said that there is pressure to buy local in both the US and India.

“There always will be friction points,” Aghi said. “These are more like irritants rather than show-stoppers.”

“I think his [Goyal’s] trip was a success, the bilateral trade with United States Trade Representative Katherine Tai and Secretary of Commerce Gina Raimondo was very successful,” Aghi said. “You will see more concrete steps between the two countries,” Aghi said. “India does provide opportunities for US companies to explore it here both for the domestic and global market.”

He cited the example of Russia, where many companies shut down overnight.

“So, when you look at China [and] if it invades Taiwan then … we are looking at helping these companies explore India as a potential secure supply chain,” Aghi stated.

Dinsha Mistree, lecturer and research fellow at the program on Strengthening US-India Relations at the Hoover Institution at Stanford University, expressed surprise that policy makers want to move out of the trade deal.

“If you walk away from trade negotiation that makes lot more difficult to have your voice and input here,” Mistree said. “I am surprised they don’t want to be in these discussions because, previously, when we had people come to [Stanford University] they made it very clear they are keen to see a trade deal.”

Mistree said he understands that in terms of the trade deal, he [Goyal] won’t be the primary decision maker, but the “minister of commerce is India’s representative, and if he is not interested, the message he is sending is, “We want to do it in a certain because that is how India sees it.”