India’s numero uno policymaker and current G20 Sherpa Amitabh Kant opened Day 3 of YourStory‘s flagship startup-tech conference TechSparks 2024 on a hugely optimistic note.
In a virtual conversation with Shradha Sharma, Kant shared that India can become the world’s No. 1 startup destination if only more domestic capital was flowing in to the sector, along with other allied advancements in new technologies like AI, quantum computing, semiconductors, drones, spacetech, deeptech, and more.
“75% of the funds in startups is still coming from abroad. We need Indians to put money in our startups. You need a Fund of Funds (FoF) to support the VCs. And the insurance funds and pension funds need to put substantial amounts of money in this after doing due diligence,” he said.
“India should not be dependent on just foreign capital. You have seen a huge boom in the stock market. India has a lot of capital to deploy. What people should do is take more risks and put their money in entrepreneurs who will end up making great wealth in the years to come,” Kant added.
Interestingly, international hedge funds and VCs like Tiger Global and SoftBank, along with pension funds like Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers’ Pension Plan (OTPP) have played a critical role in the deployment of foreign capital in India’s startups through the last decade.
But the country now needs large amounts of patient capital from domestic investors in order to take the next quantum leap in tech advancement, according to Kant.
“We need a Rs 25,000-crore deeptech fund for India which will do risk-sharing with the venture funds while they [VCs] do the due diligence. You need a lot of patient capital. Every one of us should put in a little money in our startups,” he said.
India and the age of AI
AI, one of the biggest buzzwords at the 15th edition of TechSparks, could define India’s place in the world in this century. “AI is a fundamental technology and foundational tool across sectors. And there is no doubt in my mind that India will overtake the US as the No. 1 AI developer [destination] in the next five years,” asserted Kant.
“We have such highly skilled manpower and that’s why you see the rise of Global Capability Centers (GCCs) in India. There are about 2,000 of them now and they are setting up head offices here because they can get skilled manpower at a cost that is 10X lower [than anywhere else in the world],” he explained.
But for that to happen, India needs to focus on skills and talent in a very big way. “What is really important is the talent, which will lead to investments, and that will lead to growth. We have seen this in the field of semiconductors, and now we should re-orient many of our engineering courses across institutes to embed AI, ML and quantum computing in a big way,” Kant said.
The veteran policymaker further added that there is a tectonic shift taking place in the world and we must embrace technology. “Even the government has really pushed into newer areas of growth like the AI mission, the green hydrogen mission, the semiconductor mission, and we will make a major breakthrough in some of these areas soon,” he stated.
Making impact at scale
India is no stranger to being courted by global corporations, investors, policymakers, trade associations, etc. for its attractive demographic dividend. The average age of the country is estimated to be 28, when most other major economies in the world are greying and saturating. In Kant’s view, this will allow India to “do a population-scale impact which no other country has the possibility to do”.
Elaborating on this further, he said, “This is not merely India’s decade, this is India’s century. And a lot of that is dependent on the population. In the next 15 years, 30% of skilled manpower in the world will be provided by India. And we will be actively innovating for the next 5 billion people of the world and not just for the 1.4 billion Indians. Therefore, the size and scale of India enables us to do things at a deep discount than at a deep premium and create demand in the domestic as well as the export market.”
India’s place in the world was on full display at the G20 Summit in 2023, and Kant was the kingmaker in bringing all major economies and emerging markets on the same platform. “No G20 country anywhere in the world had done it to the size and scale in which India did it,” according to Kant.
“India was able to bring all G7 countries and emerging markets and even Russia and China together on all key developmental issues… We played the critical role of a consensus-maker and established India’s key role as a ‘vishwamitra’ in many ways,” the G20 Sherpa added.
