Rajeev Chandrasekhar: 'Prime Minister Modi and I want the next wave of startup founders to come from towns and villages of India'

Minister of State for Electronics, IT, Skilling and Entrepreneurship Rajeev Chandrasekhar says the semiconductor space will boom in India following the increasing siliconization intensity in automotives, mobile communication and computing.

India is gunning for a lead seat at the global semiconductor table and is leaving no stone unturned to achieve that dream. Also, the fabs here (fabrication plants where microchips are made) will be geopolitically part of a much more trusted, safe and resilient value chain, the minister added. Excerpts from an interview ahead of the Semicon India conference to be held in Bengaluru shortly:

It's Prime Minister Narendra Modi's vision to make India one of the global leaders in the semiconductor and electronics space. Minister, what in your view, are the opportunities that are in front of India in the semiconductor space and how can we take advantage of them?

There's an underlying strategy that the prime minister has been executing over the years, which is expansion of the digital economy. As you know for many years, we were a tech services country and we built a large number of companies which were doing tech services. The government has built an entire ecosystem of innovation around the internet and has played the significant role of a catalyst in areas like fintech, identity authentication, online services, consumer tech etc. So, there has been a systematic expansion of the technology pie and the digital economy pie. We are creating an internet economy and data economy piece along with AI and other areas which are going to come into the National Data Governance Framework.

The important part of the tech economy that the prime minister has built has been the electronics space and the recent COVID and post-COVID changes in the value chain. The PM has alluded to that in the World Economic Forum conference that we will be a leading player and increase our market share in the global supply chain. One element of the digital economy that we then naturally go towards is semiconductors. For India, semiconductors are a very important natural expansion because we have an underlying demand for electronics that are going to be driving the demand for semiconductors. Then we have two or three other areas of innovation like automotives, mobile communication and computing – all three are strategic areas of growth and focus for us and the siliconization intensity in all three categories is increasing. That is further driving justification for semiconductors.

The third and very important piece is that semiconductors are now not just Fab-led or process led. The design element of semiconductors and the innovation on semiconductors are as important to the future of the semiconductor ecosystem in which we are very good. Therefore, it makes very logical sense as we grow our digital economy, we also are creating very viable, practical opportunities for semiconductors as well. I'm saying all this to contrast India's move into semiconductors from other countries who seem to be doing this with a tactical, kneejerk geopolitical consideration. Ours is demand-led digital economy with capability and competency. Plus, India will be the largest Fab that will be non-China proximal.

Minister, you had made a statement recently that India does not have deep bench strength in terms of talent in the semiconductor space. I also believe that there is a mission to create talent at three levels - the research piece, design and innovation and the supervisory talent. Can you please elaborate on that?

I'll tell you very clearly that one of the conversations when it comes to India, is the conversation about talent. The talent requirements of semiconductor, design and innovation on one hand and the highly complex Fab issues, supply chain management issues etc on the other hand are very different. These require very diverse sort of talent and the answer is we don't have a deep bench strength today but we are very capable of and focused on developing the talent capability that India needs. There is talent scarcity around the world for semiconductors and semiconductor professionals. So, we see ourselves as having an opportunity to provide talent not just Indian fabs but also fabs around the world.

I also want to add that there is a government task force that has been assembled and I'm personally overseeing that. It's a task force that combines AICTE, IITs of the country, other engineering colleges, labs, the academia and start-ups and we are addressing the issue of skills at three levels – semiconductor research, design and manufacturing and the supervisory skills that we need in the supply chain.

Minister, as a country, what is our mission now in terms of the expansion of the semiconductor and electronics industries? What's the opportunity space that we are chasing?

It's very simple, Darlington. It's simple in the sense that it is simple to articulate but very difficult to execute, of course. On the electronics front, we have already laid out a strategic plan that we will do $300 billion of manufacturing by 2025 of which $120 billion will be exported; different categories of electronics, IT hardware, mobile telephony, services, the whole nine yards. So, that's one piece. On the semi-conductor piece, we believe that with the increasing siliconization of automotives, mobility where we are now in 5G and 6G like the rest of the world, we will create our own domestic solutions. You saw recently Tejas, which is a Tata company, acquiring semiconductor firm Saankhya Labs in Bengaluru. Even among Indian companies the move is to create domestic solutions and mobility. Plus, you have the compute companies of the world sitting here, so we believe that the opportunity is for a minimum of $110 billion of semiconductors that will be required in India by year 2030. About $80 billion would the intermediate point by 2025-26. So, it's a large market for semiconductors to be consumed by India. Plus, the Fabs here will be geopolitically part of a much more trusted, safe and resilient value chain. The export potential of this Fab will be significantly high.

What would you count as India's USP in the semiconductor industry? In the past we have missed many an opportunity in this space.

Oh, absolutely. I am personally making presentations to these major semiconductor companies. I have a section that says 'Why India' and that proposition is very compelling because remember that we are going to be one of the largest electronics markets in the world. The prime minister has put forth our ambition to be a significant player in the electronics value chain for the world.

The electronics value chain today is $1.5 trillion and to a large extent is dominated by China. In the post-COVID scenario, the world is looking for a diversification of that value chain. Therefore, there is a great opportunity for India in domestic consumption as well as being a trusted supply chain for the rest of the world. Clearly, India today, from a technology point of view is at an inflection point. There is respect and awe for Indian start-ups and Indian entrepreneurs around the world. There is a tremendous amount of capital that is available for investing into India. So, that's the second bucket. The third bucket is that we have a government today that has raised the bar on execution. We are no longer seen by the outside world as a country that cannot get things done and one which has no execution capacity. We are building roads at a rate faster than any other country in the world. We are building ports, building electronic manufacturing clusters, so we have a lot of things going for us. The government is saying look we'll give out $10 billion of capital subsidies and financial incentives to those who invest here. Even if somebody believes that there is some risk, viability gaps in the model that they want to address before investing, the government is stepping forward and saying here's the money.

You are also in charge of the skilling portfolio. How does the whole skilling game dovetail into the semiconductor space?

It's very relevant, Darlington. One of the concerns people have is that we don't have the talent. When we have 450 million youngsters, how can you say we don't have the talent. It's only the question of developing the talent. I'll assure you that the Indian diaspora today is a significant participant in the global semiconductor space and many of them want to come back to India and many of them want to be adjunct professors here, train people and give back to the country. Yes, to an extent, we are not fully there yet in terms of the talent pipeline but I'm confident that we'll get there. This job or challenge that I have for myself is a much more exciting task than even bringing in any investment. Grooming 500,000 Indian youth to be players in the global semiconductor space is an absolutely exciting challenge and an opportunity as far as I'm concerned.

It's widely said that 2020-2030 is India's tech decade or techade. There has been plenty of capital flowing towards the Indian start-up ecosystem, huge number of unicorns are born every year in India. In your view, where's it all leading to? What shape is the economy taking as a result?

It's all going to lead to a trillion-dollar digital economy. The digital and tech part today occupies 10-15 percent of the overall economy of three trillion dollars. We want to make it a significant piece of that growing economy. When we are a $5 trillion economy, we would like us (the digital-tech part) to become a $1-1.25 trillion of that.

Also, I believe that start-ups are a signal of many things. Apart from expanding the digital economy, it is a significant change in the way our economic model has been built in the last 60 years where only a few companies and a few groups got access to capital and opportunities. Now you have this huge energy unleashed, thousands of entrepreneurs who have access to capital, who are confident and are able to take their ideas and make it either successful or fail and try again. This is a social transformation of our economy that's underway.

In my opinion it's a genie that has been unbottled. The energy of young Indians have been unbottled and attached to that is the success of the unicorns and startups. This is giving more energy and confidence to the next wave of start-up entrepreneurs coming in. We are only seeing the tip of the iceberg.

There is deeptech, AI and all kinds of areas where there are going to be newer and newer start-ups including in the semiconductor and electronics space. I suspect we'll have more than a 1,000 unicorns in the next two to three years.

On the education front and the skilling sphere, what we probably don't have in India are the kind of universities that the US has i.e a Harvard or a Stanford. The tech dominance of the US is built on the talent pool churned out by these universities. We have the IITs of course, but they are largely confined to Indian students. How do we address this skill gap?

We can both agree on one thing that the New Education Policy that was announced in 2020 was one of the biggest reforms in education. A child does not have to get restricted to learning Physics, Maths etc but also learn coding and all kinds of other things and can get credits for it. Earlier, we had the department of science and technology, department of higher education etc but maybe there was not much of an active collaboration at a policy level or at the outcome level. We are making sure that there will be more of these clusters that are anchored by the innovation ecosystem, comprising the labs, academic institutions and the government. This is not very different from the US model. As a result, there is now a collective belief India's destiny is going to be shaped by the tech and digital economy. It's that sort of opportunity that is motivating cross-functional collaborations between different types of institutions and subjects. The next wave of innovation may come from bio-medical, medical-engineering etc for which you cannot create a university as these are inter-disciplinary co-operations. There is no established curriculum for that. We are creating an overall environment where innovators can collaborate. As long as the sandbox is very clear, innovators will find a way to innovate and do great things.

I often wonder whether a lot of the tech talent that we have in India in the tier-III towns and villages go unnoticed. Since most of the companies are located in the metros or bigger cities, there is a significant advantage for city-dwellers. So, how do we ensure that we democratise this? How do we ensure that youngsters from remote areas get to partake in whole technology game?

It's an absolute priority for the government and me. It's a priority task that the prime minister has given our ministry, which is to make sure that these digital opportunities are equally available to a young lad in Ghaziabad, Jharkhand, Srinagar, Kohima, Palakkad or Udupi as much as the youngsters in Bengaluru or Hyderabad. We don't want the concentration of digital concentration of these digital opportunities in 4-5 cities. It's a 100 percent policy objective.

I'll tell you couple of things we have done. Our entire startup ecosystem is slowly being moved away and refocused on tier-II towns. We have an extensive network of STPI and start-up hubs that's moving their focus to tier-II and tier-III towns. We are working out a plan to incentivise, prod and encourage technology majors to create virtual developments in these smaller cities. With a mix of work from home and hybrid models, companies do not have to set up huge centres in these places. After BharatNet and 5G get rolled out and connectivity in the II-tier and III-tier towns improve significantly -- of course we will talk in a year and you can take a report card from me then – I'm confident that these youngsters would absolutely itch to get into this (technology game). In my own personal experience while campaigning during the UP elections with the slogan Digital India ka Digital Uttar Pradesh, the response was tremendous. They have the same aspirations. It's a question of the government enabling it.

We have reached out to the big investment firms like Sequoia and said we will take you on the back of our start-up network which is now focusing on tier-II, tier-III cities. We will facilitate and enable that. The prime minister and I genuinely want the next wave of start-up founders to come from these tier-II and tier-III cities.