India: The Next Tech Global Superpower?

‍0:00:00.6 Amitabh Kant: Despite all this, we're going to see a huge era of enhancement of production and productivity because of AI, machine learning, robotics, drones.

0:00:11.5 Secretary S. Krishnan: If there is one country in the world which is gonna be a big technology adopter in the days to come, it's going to be India. And we need to probably not just absorb technology, but also create technology.

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0:00:23.8 TK Kurien: Real core technology, very, very little has come out of India. And that's because of two reasons. Number one is it needs enormous stay power. Patience. Investors don't have patience.

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0:00:36.6 Sriram Viswanathan: Hi everyone. This is the Tech Surge Deep Tech podcast presented by Celesta Capital. Each episode we spotlight issues and voices at the intersection of emerging technologies, company building, and venture investment. I am Sriram Viswanathan, founding managing partner at Celesta Capital. If you enjoy Tech Surge, now is a perfect time to hit the like and subscribe button. And while you're at it, you can leave us a review on your favorite podcast platform. If you're just discovering us, visit techsurgepodcast.com to sign up for our newsletter and check out the archive of some very interesting past episodes. For decades, India was the world's IT services engine. Today, it is trying to become something very different. A creator of deep technology, foundational intellectual property, and global competitive companies. Semiconductors, advanced computing, space systems, quantum technology, biotechnology. These are the foundations of the modern economy, and nations are rewriting industrial policy around them. India is entering into this arena with unique momentum, a massive talent base, a fast-scaling innovation ecosystem, and a China plus one geopolitical opening that's reshaping global supply chains. But building a deep tech economy isn't a quick turn game. Success requires alignment between government policy, patient capital, institutional capacity, and an entrepreneurial execution at national scale.

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0:02:13.5 Sriram Viswanathan: India's latest union budget includes clear signals. Serious funding for AI compute, bigger support for semiconductors and the full supply chain, and a long tax holiday to attract global cloud and data centers. Backed by sustained space spending and a large R&D to commercialization pool through the 1 lakh crore, or roughly about $12 billion, in an R&D related scheme called the RDI scheme, which stands for research, development, and innovation. The upshot is simple. India is treating deep tech like national infrastructure, using long-horizon incentives to de-risk investment and pull in private capital, stepping up on par with the other global technology superpowers. For the first time, it is in this backdrop we bring this special episode where we offer three lighthouse perspectives on India's deep tech trajectory. A senior policymaker shaping India's deep tech agenda, a national strategist who has helped define India's global economic posture, and a long-horizon technology investor deploying patient capital. To understand where India is headed in deep technology, it's important to start with policy. My first conversation is with Mr. S. Krishnan, Secretary at India's Ministry of Electronics and Information Technology, called Meity. Thank you so much for joining us.

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0:03:51.6 Secretary S. Krishnan: Thank you for having me.

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0:03:52.9 Sriram Viswanathan: Secretary Krishnan, it's a pleasure to have you on board. So, perhaps we can just start off with talking about your role because you have a very broad portfolio in terms of the technology policy, and you're also driving many of the conversations and discussions with the large technology leaders. Just explain to me what does your role entail as a secretary?

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0:04:17.1 Secretary S. Krishnan: The Ministry of Electronics and Information Technology has a number of responsibilities, and these responsibilities have significantly grown in the recent past with the growth of technology. So, one part of it is electronics itself, the industry, and what needs to be done to promote design and manufacture of electronics in India. Semiconductors as an important segment of that. That's one key element. And then all the policy relating to imports, exports, our trade-related policy in that space. Then we have on the information technology side, artificial intelligence is the main focus now. But in addition, digital public infrastructure, which India is promoting across the world, the way that technology is applied within government and within governance in terms of digital governance, what happens with cyber laws, the legal provisions relating to all of these aspects, whether it is social media, whether it is electronics resources, whether it is facilitating electronic contracts, digital signatures, a range of those responsibilities.

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0:05:28.9 Sriram Viswanathan: So, paint us the vision for the technology policy. What is the... Let's say, what does this look like in five years? What would you say would make you feel like you achieved the objectives that you've laid out?

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0:05:42.9 Secretary S. Krishnan: I think the important thing in the Indian context, and given what is happening with geopolitics and what is happening given India's large size and talent, I mean, it's a large market, there's a fair amount of technology-linked talent. Our average age in India is 27. Many Western countries are well above 40. If there is one country in the world which is going to be a big technology adopter in the days to come, it's going to be India. And we need to probably not just absorb technology but also create technology and figure out a way by which we actually gain from this entire moment and also play a global role as a trusted provider of technology, both in terms of what we do on the electronics side, the hardware side, and also what we do on the software side, including artificial intelligence. I think we have to really leverage our human resources to make sure that we become providers to the world in each of these spaces. And we are a country driven by technology. The overlay of all this technology is there in every sector of India's economy.

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0:06:52.8 Sriram Viswanathan: No, I want to take you back maybe 30 years when the true software and services ecosystem just exploded in India with IT services companies that came about. And it was undisputed that the Indian infrastructure for IT services is by far the best in the world. You're literally the back office of the entire world. But I want to really point to the fact that you are making a very focused effort to drive all of these key sectors. But 30 years ago, you didn't have anything like that and it still happened. And it was largely driven by industry. I mean, I addressed you had NASSCOM, maybe you had CII, but Wipro flourished, Infosys flourished, and HCL and others. What was the difference? Why is there a need today to have a significant government push to these key sectors versus the software ecosystem development?

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0:07:48.6 Secretary S. Krishnan: I think there are two or three things which are important. One is that even now, I think the key role is to be played by the private sector. It's not going to be the government in terms of us establishing large companies or public sector companies which will do a lot of this. Unlike in many other sectors of India's economy where there is a large public sector presence, this is a space where there's very little public sector presence. And it's not as if that's going to change. But I think two or three key things are important. We've got very good services companies, globally competitive and, as you say, providing services across the world. But they are truly not product companies in that sense. And we, both in the electronics side and on the non-electronics side, the digital technology side, I think we need more product companies coming out of India, more of the design taking place in India, more risk-taking happening, more research and development happening in these spaces. And I think that is what the government wants to catalyze. So, we want to just cater to those requirements which will ensure that this gets catalyzed.

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0:08:55.6 Sriram Viswanathan: So, I'm sure you would appreciate that in any major government-backed initiative along the lines of what you're talking about for technology explosion and ecosystem development, it's not just the government's underwriting with capital. It requires a lot more than that. It requires, as you said, private sector involvement, but equally important, skills development, university research work happening. All of that is crucially important. As you know, in the US, the proliferation of the internet occurred largely because of DARPA, largely because of NSF, largely because of government programs that drove the infrastructure. Are you comparing that to the current times and what you're trying to do?

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0:09:40.8 Secretary S. Krishnan: It's important to learn lessons from what others have done, and that is clearly something that we will do. But again, what works in one economy may or may not work in another economy. We can't do exactly what the American economy or what American policy achieved and what was done there. We can't exactly do what, say, China has managed or what Europe has managed. There are a number of factors which are different. There's resource endowment. Clearly, India, in terms of public resources, may not be able to spend as much as some of the other countries. So, it necessarily has to be frugal. The role of the private sector is a little different, and that needs to be catalyzed a little differently. The sizes of the enterprises may vary. We may not have such large enterprises in all cases. There will be differences in what we do. But I think the crucial thing in India's case is the talent which is available, the size of the cohort of talented people trained in STEM. I think that is a very crucial factor. The other crucial factor, of course, is that, as you said, the entire ecosystem needs to be built.

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0:11:12.2 Secretary S. Krishnan: Indian research has been modest compared to many of those other places, including the fact that the private sector hasn't invested as much in research as they have in other places. We have to incentivize ways by which the private sector would also come into research and development of products. So, that's another thing which requires clear focus. We also find increasingly that many people, Indian diaspora, who have been in... Who worked elsewhere, are now willing to come back and support this Indian students who picked up graduate degrees, who have done PhDs and so on elsewhere in the world are now willing to come back to India and do what is needed and work here. So, a number of things are also changing. All of that put together, I think, will create the critical mass. And another important step has been the development of entrepreneurship. Today we are the third largest startup ecosystem in the world, and that should count for something in terms of what can happen in that space.

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0:11:54.3 Sriram Viswanathan: Yeah, I just shudder to think your day job because what you do is so critically important for the whole country, but you don't control all aspects of what these programs are and obviously there's other ministries, there's Department of Science and Technology, there's a department of DPIIT, and there's a whole bunch of other ministries. How do you actually stitch it all together? What is that cohesive thread that allows for you to sort of coordinate all of these programs?

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0:12:22.2 Secretary S. Krishnan: What you say is absolutely right. Given the size of India and given the size of each of these sectors, you do need separate institutions, ministries to do this. And in addition to all the ministries at the Government of India level, there are state governments we have to work with. You have to understand that some of the Indian states are larger than many large European countries. It's always a challenge to work with so many moving pieces. But I think that's what we bring to the table in the sense coordinating all these efforts and making sure that we converge with other efforts going on at different levels in government so that we are able to deliver something which is coherent and is meaningful to the country. Some of those efforts, including the India Semiconductor Mission and hopefully the artificial intelligence mission in the days to come, will be able to deliver what we intend.

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0:13:10.9 Sriram Viswanathan: So, let's double-click on that because that's one of the core initiatives that you are directly responsible for, which is the ISM program. You actually invited a bunch of private sector folks to participate in that. So, you've made close to $20 billion of commitment already in the manufacturing schemes and also the design schemes. First of all, how did that come about? What drove the formation of ISM itself, and how do you see that evolving over the next five-year period?

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0:13:40.2 Secretary S. Krishnan: I think India has been wanting to be in the semiconductor space for almost more than six decades now. Early efforts in this direction were as old as 1962 is what I understand when I read through old records. At every stage there's been an attempt to actually develop a semiconductor industry in the country. There's a very small and focused on strategic needs semiconductor industry which happens. The Semiconductor Laboratory in Mohali was one of those early efforts, and at some point in between it was actually with the Department of Space as part of the Indian Space Research Organisation. They felt that serving that strategic need was the primary objective. Now, of course, it is with Meity and we are trying to, while serving the strategic needs, we are also trying to look to see what else we can do in the semiconductor space more broadly, given that it's become such a broad-based technology which is needed everywhere in all forms of electronics.

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0:14:35.1 Sriram Viswanathan: If I may interrupt. As you say, it's been around for 60 years. The objective and the desire to make progress in this area has been there for 60 years. What are you doing now differently? Because it's unquestionable that the 60 years of progress has been.

What are you doing now that's different?

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0:14:53.7 Secretary S. Krishnan: That's the point I was coming to. We've had attempts over the last 60 years. I've been personally aware of attempts in the last 20 years at least, starting 20 years ago. And we never had a program which actually brought it together till now. And I think for the first time we have, in my understanding, and as you said, I've spent almost 36 years now in government, we've never had an industrial policy program which has been as generous, which offers up to 50% of subsidy or grant from the central government, from the federal government, and in addition to that, something from the state governments as well towards the build-out of a large semiconductor manufacturing facility. It's never been done in India before. We put down something like $10 billion just from the government side, Government of India side. And states have also put about half of that down. $15 billion is what has come about. This has been huge. And usually what happens in India is that any kind of industrial policy linked subsidy is paid out only after you've finished the entire investment and you're into commercial production. This is one case where we're actually paying out on a pari-passu basis simultaneously with the investment which is taking place.

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0:16:15.3 Sriram Viswanathan: From the early days of the risk.

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0:16:16.9 Secretary S. Krishnan: From the early days. So, and it's entirely a grant-based funding, so it is not even equity in some form. But which I tend to regard as we then become actually the biggest stakeholders in the success of any of the programs.

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0:16:32.9 Sriram Viswanathan: Sure.

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0:16:33.3 Secretary S. Krishnan: And I think that is a mindset which has now come in saying that...

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0:16:37.2 Sriram Viswanathan: That's changed.

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0:16:38.5 Secretary S. Krishnan: That's changed and that we need to ensure that this thing actually works and succeeds because the government has actually put down so much, there's so much of public money involved. And I think we've also put together a mechanism of evaluating these projects, walking them through about three or four stages of approval and making sure that all the issues are covered in that. And some of the best experts in the world globally are involved in this process. We have an advisory committee, we have a technical and financial feasibility advisory group which has some top-notch experts from all over the world who advise us on whether this project will work or not. And then internally in government, we have about two or three levels of approval, including a fairly rigorous economic and technical process which it goes through. But we've been able to do it fairly fast. So, you would see in the last two years we've been able to put through about 10 projects and brought them to an approval stage. This year we probably have the first chip coming out of India in the calendar year 2025. I think all of those are...

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0:17:42.3 Sriram Viswanathan: Big changes. And as you point out, I think, if I were to just roll back the clock to when it was attempted in the decades before, the one big difference that stands out for me is the lack of international collaboration and participation in the old days, which is very different now. You're really trying to get leading-edge fabs to be established in India and be sort of cutting-edge for manufacturing these products. And as you know, I've spent decades in the semiconductor industry and it is not easy because it's not just capital. You can't throw tens of billions of dollars and expect to manufacture a 2-nanometer fabrication facility in India. So, I wonder what is driving you to aspire to be in the cutting edge when there may be some low-hanging fruits available for you in semiconductors in manufacturing, which may be a more prudent way for India to sort of climb up the ladder of innovation, if you will, because you can't make this thing happen overnight. And so, I'm just questioning what is the motivation for you to shoot for the leading edge in manufacturing, or is that even an objective?

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0:18:58.1 Secretary S. Krishnan: What you say is absolutely right. I mean, semiconductor manufacturing is some of the most advanced manufacturing in the world. Some of the countries who are at the leading edge have been doing this for almost six decades. They've reached where they are now. If you're starting, you can't immediately aspire to be at that end. And our understanding is that as you grow closer and closer to the leading edge, costs go up significantly, dramatically. Particularly I understand that when you come down from about 28 nanometers, when you sort of... To about 14 nanometers, the costs go up exponentially. Likewise, below 14 it again goes up, and below 7 it goes up, below 5 it goes up. So, we are aware that there's this challenge, but we are also aware that the industries require the broader industry. As semiconductors and electronics become more ubiquitous, there's a big requirement in the legacy nodes as well. Between the 28-nanometer to the 110-nanometer range, the number of electronics items which are manufactured using chips that size. That technology is more mature. The costs involved are less given India's current situation in terms of what we can afford. And I think the way we are going about this is that there's reasonable certainty of what the market looks like, there's reasonable certainty about the technology.

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0:20:21.1 Secretary S. Krishnan: There's a way in which our ecosystem can actually step up and make sure that we are able to meet the requirements of such advanced precision manufacturing. And if we're able to build a base at that level of tackling the legacy nodes, then in the next phase or subsequent phases, we can move into the more leading-edge technologies. And that's the way that the ISM is also progressing. We are not aiming to, and there are people who have criticized us saying that you've not gone to... What is the point of putting so much money down if you're not going to make a 1-nanometer chip or a 2-nanometer chip? But I think we'd have to put down many, many times the amounts that we are putting down now to get there. There's a lot of uncertainty globally. So, I think we are taking the more conservative approach that you had yourself outlined of not necessarily starting at the leading edge, but somewhere in between and trying to work our way up.

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0:21:19.3 Sriram Viswanathan: That's a good segue to the second program that you have, which is the design-linked initiatives where you're really supporting companies that are actually designing the product with a view towards having some of those products be manufactured by the factories that you would have supported by the production-linked initiatives. In that context, before we talk about some of the challenges that some of those companies have, isn't it fair to say that having a large factory, even if it's not in the leading-edge nodes, but N-1, n-2 kind of nodes, isn't it important to ensure that those factories are fully capacity utilized? And it is a far cry today to expect non-Indian customers to come to India for N-2, N-3 capacity because that capacity is available at a fraction of the cost in Taiwan or Singapore and other places. Inherently you have to fill those factories and the only way to do that is to have local domestic demand or procurement. Do you think that the Indian market is capable and open enough to fill those factories by having those design products manufactured in India versus going to a cheap geography?

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0:22:35.9 Secretary S. Krishnan: As we speak, our semiconductor demand is about $50 billion a year, between $45 and $50 billion a year. We expect it to reach about $110 billion by 2030 or thereabouts. Now, the total capacity which is getting created in the country and what they would actually manufacture would be about $8 to $10 billion by 2030 and the subsequent years. This is the domestic manufactured product which we have approved under our schemes. So, it looks like the actual capacity that we are creating is only about 8% to 10% of India's own demand for semiconductor products. So, I think the ability to sort of generate enough domestic demand to meet that requirement is something we can do. But as you know, semiconductors and electronics are a global value chain. You have to run these fabs efficiently and productively to make sure that we are able to cater in certain nodes to not just domestic demand but also export. And being export competitive is very important because you can't stick Indian manufacturers or Indian customers with higher cost products just because it's there.

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0:23:52.4 Secretary S. Krishnan: So, that's one part of the story. But the other part of the story also is that we really have to design a lot more of the chips and semiconductors in the country in order to provide in interesting ways. Today, Meity, my ministry, has a program called the Chips to Startup program under which about 350 academic institutions and startups are using EDA tools which we provide for them subsidized.

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0:24:20.5 Sriram Viswanathan: This is the Cadence, Synopsys tools. The government bought customer and you've made it available.

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0:24:26.4 Secretary S. Krishnan: And so, we make them available. And I wanted to measure the impact of how many hours these tools are being used for, and I was very pleasantly surprised to learn that this year we have used more than 12 million hours. That is what these tools have been used by these 350 entities across the country.

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0:24:51.4 Sriram Viswanathan: That's fantastic. So, that's...

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0:24:54.7 Secretary S. Krishnan: I mean, fantastic utilization of something which has been provided.

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0:24:55.4 Sriram Viswanathan: That's fantastic. So, can you give us a balanced scorecard of your effort in ISM 1.0 to what you're trying to embark on in ISM 2.0? What has worked in ISM 1.0 and what are you thinking of changing in this second version?

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0:25:11.2 Secretary S. Krishnan: Let's start at the other end, which is the design end. I think in the design-linked incentive scheme, the kind of companies which we had made eligible was fairly restrictive in terms of only startups and small and medium enterprises. I think we need to think bigger. We need to permit more companies which can be done. Some of the other practices were restrictive in the way that the grants were released and the requirements for grants to be paid back if somebody else bought into the company. We have to think of the intellectual property. We want the intellectual property to be in India. We have no doubts that it has to be with an Indian company, with an India-registered company, and in India. But it doesn't necessarily mean that it has to be owned entirely by Indians. So, we have to figure out a way of structuring that. Then we also have to make sure that the way in which the money is released and the amount of money which is released is also liberalized a bit because in deep tech of this nature, the amounts initially required are fairly large.

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0:26:17.3 Secretary S. Krishnan: So, that is something we will ease out. But more important, and most important, is that there needs to be access to risk capital because if growth has to take place, then risk capital has to be there. Because what we've found is that some of the successful chip and other deep tech companies that we incubated here then eventually flip and move to other jurisdictions simply because they want to raise more risk capital. We have to enable more risk capital to come in and government has to find ways to actually do that. So, these are all things which we will try and do on the design side. On the manufacturing side, in addition to what we did in the previous edition of ISM, which is basically looking at fabs and ATMPs and OSATs, we would also try to do a few other things in the sense of trying to incentivize in a slightly differentiated way so that the kind of technologies which have not already come in continue to stay incentivized at a higher level.

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0:27:15.9 Sriram Viswanathan: Do you envision an artificial intelligence mission? Of course there is a quantum mission. So, how do you think you will replicate what you've seen here in some of these other sectors?

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0:27:27.3 Secretary S. Krishnan: Again, we are taking slightly differentiated approaches. If you take artificial intelligence, we have the India AI Mission under Meity. That again is doing an interesting job and we've taken a very distinct and different approach to what many other countries have done, including what Europe and others have done in this area. The three things which are wanting or which you would need to establish an AI ecosystem in India, first is compute. And you can take an approach saying that we will fund and establish our own compute. We've taken a slightly different approach. We've said the private sector will build the facility. What we will enable is underwrite a market to actually buy from the private sector facility capacity, compute capacity.

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0:28:09.2 Sriram Viswanathan: This is a little different than what Saudi Arabia or UAE or some of the other places are doing where they have a sovereign AI infrastructure that is built. So, you don't see India doing that.

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0:28:19.6 Secretary S. Krishnan: We will establish some. We've not closed off that possibility. There will be some limited capacity which is sovereign, which is meant only for government and for our other users, which we'll have to because of sensitive data, sensitive requirements. But by and large, for research, for innovation, and for others to use, it would be established in a public-private partnership model that the private sector would establish the facility and government would enable people to buy time, buy the services there. So, that is as far as the compute itself is concerned. The second important thing is data. We've set up a data sets platform, it's called AI Kosh, where more than a thousand government data sets have already been loaded. And we are working with various ministries and state governments to actually bring on more data which can be used by a range of entrepreneurs and innovators to train their models and so on. That's the second thing. The third element is supporting model development itself. We are supporting Indian companies, both which have been incubated in academic institutions like IIT Madras, IIT Bombay, and so on, and also by startups.

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0:29:34.2 Secretary S. Krishnan: And we are supporting them to establish their models and build them. These are three verticals of the India AI Mission. There are other verticals where we are addressing skilling, as that becomes important, skills development in that area. We are addressing issues relating to how we can support entrepreneurs better. And most importantly, from an Indian context, how do you develop applications? Because I think that is something ultimately, how AI gets applied and how people use it on a day-to-day basis is what's going to become the differentiator. How do we have this ecosystem of a large number of AI-based applications being developed which can then be deployed? And that, in a way, is probably the opportunity for India in AI, that much like the Y2K movement, India's youth, India's STEM human resources are the ones who would be out there to deploy the AI applications which are developed both for various companies across different sectors in India and globally.

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0:30:34.5 Sriram Viswanathan: Let's talk a little bit about this program that Department of Science and Technology in India has launched, which is the RDI scheme, which is for research, development, and innovation. And you had a big role in actually helping shape that along with the other ministers. How do you expect that to evolve and how is that different from ISM itself?

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0:30:56.6 Secretary S. Krishnan: That is a much broader-based program and it's part of what has been attempted to be done under the ANRF, Anusandhan National Research Foundation.

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0:31:07.3 Sriram Viswanathan: Which by the way, for our non-Indian audience, that's the effort to create something along the lines of DARPA and NSF.

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0:31:13.9 Secretary S. Krishnan: That is right. So, the idea that the ANRF was created last year with the intention of actually expanding research and development in a range of areas. As Secretary in the Ministry of Electronics and Information Technology, I'm one of the governing body members of ANRF and their executive committee members, part of many of the discussions. And what Meity's done is it's probably the first ministry which is actually co-funding research efforts with ANRF. Now, another offshoot of this is the RDI program, which is basically intended to support research in the private sector alongside the private sector. And as part of the RDI program, there's an intention to set up a deep tech fund, a kind of a fund of funds for deep tech which will raise money in addition to the government money, along the lines of the National Infrastructure Investment Fund, raise money from the private sector and from other investors, and thereafter invest into funds which will support deep tech in India. The ambition really is that India should, as I said already, be a participant in this global value chain. I think we need to be clear with this kind of technology, no one part of the world or no one geography is going to be the provider of everything.

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0:32:34.6 Secretary S. Krishnan: We need to be a significant player in two or three areas of deep tech, including in the semiconductor space, in the AI space, the way we made space within the IT-ITeS services, in the biotechnology space. And at least in some of these horizontal technologies, whether it is AI or semiconductors, have a key position so that we are part of this global value chain.

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0:32:59.5 Sriram Viswanathan: So, Secretary Krishnan, thank you so much. Your broad range of understanding of the issues and commitment to making this thing happen is truly laudable.

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0:33:08.7 Secretary S. Krishnan: Thank you.

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0:33:09.7 Sriram Viswanathan: You've just heard how India is building the policy stack, from semiconductor incentives and design enablement to an AI mission anchored in compute, data, and applications, to a new financing engine aimed at mobilizing patient capital into frontier technologies. But these policies aren't happening in a vacuum. The global order is shifting. Supply chains are being redrawn, technologies are instruments of national power, and alliances increasingly shape innovation corridors. India itself has evolved greatly over the past decade as well. To understand why India's deep tech push is also a story of global and domestic transformation, we now turn to Amitabh Kant, who served as India's G20 Sherpa and former CEO of NITI Aayog. Amitabh is a force to reckon with when it comes to policy matters of just not India's importance, but of global significance. So, thank you for coming.

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0:34:14.5 Amitabh Kant: My pleasure.

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0:34:15.2 Sriram Viswanathan: Why don't we start first with the more pressing situation that we find ourselves in globally, but more specifically in India. The overall economic impact of some of the tariffs and how the Indian government is actually looking at what does India find itself in at this point and how do you see this evolving? I'd love to hear your thoughts on how should this evolution occur.

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0:34:42.9 Amitabh Kant: I think it's important to look at it from a global perspective. To my mind, there are three critical issues that are taking place. First is that there is a breakdown in the institutions that were established post-World War II. The relative period of stability and [0:34:59.8] worldwide that has come to an end. So, you're seeing wars in Europe, you're seeing a war in Middle East, and institutions are not able to manage that, number one. Number two, there's a breakdown in the global value chains. Free trade, which had lifted vast segments of population above poverty line, there is a complete breakdown in global supply chains. That's important. And thirdly, despite all this, we're going to see a huge era of enhancement of production and productivity because of new forces. AI, machine learning, robotics, drones. We are living in an age which will be transformational as far as production and productivity. And AI will enable us to improve learning outcomes, health outcomes, nutrition standards, which was never envisaged earlier. So, these are critical forces. And in the midst of all this, we also have a challenge with India-US relationship right now because the bipartisan efforts over the last two and a half decades to build up a close relationship geopolitically between United States and India is seeing a lot of storms right now.

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0:36:16.3 Amitabh Kant: And it's important simply because USA accounts for about 26% of global GDP. It accounts for about 48% of the market capitalization with just 4% of the population. And if India's ambition is to grow from a $4 trillion economy to a 30-plus trillion dollar economy, it's important that India works closely with the United States of America. It's a free market economy. India will grow and prosper if there's free enterprise in India, if we are able to use technology to leapfrog in many, many areas. But this is something which the present administration in United States must also realize and must work closely with India.

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0:37:04.4 Sriram Viswanathan: Yeah. So, let's unpack a bunch of these things because I think as you likely point out, this is not just an issue where India is finding itself in sort of a transformational set of factors that is affecting everybody globally. But I think very specific to India, it seems like there is a global issue relative to trade. There is a technology disruption quite profound as a consequence of AI. There is a need of the hour for India to really look at what is its role in the evolution of deep tech and how does India move from just the traditional services-oriented, IT services-oriented, sort of back office of the rest of the world, to really creating intellectual property and really leading some of the key sectors in deep tech. There's a whole set of issues around that. And then of course, the reframing of the global order has a significant impact. Let's just unpack this a little bit. So, just give us some broad data on how over the last five years India has fundamentally changed.

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0:38:14.8 Amitabh Kant: What's happened in India in the last decade, and I would look at our five but a decade. A decade has been transformational in India for several reasons. One is that there's been a huge amount of structural reforms. You have one tax across the economy, that's the Goods and Services Tax. You have the bankruptcy code, you have the Real Estate Regulation Act, you have ease of doing business focus, you have the lowering of corporate taxes. So, those are structural reforms that took place. Then there is a digital transformation of India. Everyone has a digital identity. India has 50% of the real-time fast payments. We are able to provide credit on just mobile in 30 seconds. You can do a stock market transaction in 30 seconds. You can buy an insurance policy in 30 seconds to one minute. All this on the mobile, on the go. This doesn't happen anywhere else in the world. Indians don't go to a physical bank. They do all their transactions from their mobile. So, the cost of acquisition of a customer has fallen... It has fallen from about $30 to less than 15 cents. And India has technologically leapfrogged in a manner that the Bank of International Settlements said that India has achieved in seven years what it would have normally taken 50 years to achieve.

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0:39:28.5 Amitabh Kant: That's the UPI infrastructure. That is everybody using the digital identity to do transactions. Because between 2015 and 2017, we opened up 550 million bank accounts. Every second bank account was opened in India. Every second bank account across the world was opened in India. And then we seeded these bank accounts with both the digital identity and the mobile number. And that to my mind has been transformational in India. So, this is what India has done on digital infrastructure. And thirdly, I think what India has done in terms of physical infrastructure. It's built 40 million houses for its citizens, which is more than the population of Australia. It's provided toilets to 130 million Indians, which is more than the population of Germany. It's provided piped water connections to 253 million, which is more than the population of Brazil. It's built about 88,000 kilometers of road, which is 4x what roads India had before. So, the physical infrastructure has been enormous. And the fourth thing is that it's gone green in a very big way.

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0:40:53.0 Amitabh Kant: It's done about 230 gigawatts of renewable energy, brought down the cost of power, of renewable power very substantially. And it's pushed the limits on strongly feeling that a green economy is good for India. And we are able to do it not at a green premium, but at a green discount, and that India would be the first country in the world to manufacture, urbanize, industrialize in a very, very sustainable manner.

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0:41:19.7 Sriram Viswanathan: How do you think about the dependence of India's partnerships as it relates to some of these key trends and results that you're articulating? How much of that is really as a result of some of the key partnerships that you've been able to establish globally versus just domestic transformation that has occurred?

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0:41:40.8 Amitabh Kant: So, we are looking at... Living in a world where you need to work with countries. There has to be backward-forward linkages with good technology. I mean, one of the main reasons why we have been able to do it is because we have a lot of brilliant, bright Indians who go abroad to the universities in the United States. Many of them come back to do innovation in India. We had a very close relationship with Europe. We have a very close relationship with Japan. Some of these good infrastructure, like dedicated freight corridors, the metros, we make about eight metros in a year. No one else is doing that. It's all in partnership with Japan. We are doing the high-speed train with Japan. There's a lot of global relationships which India built up in the last decade.

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0:42:27.6 Sriram Viswanathan: In that context, I think you would agree that the predominant relationship India has, as you rightly point out, has been with the United States. So, given the change of climate in what is really happening, how worried should the Indian government be about this? And what's the alternative set of alliances that's going to continue to propel India's ambitions in this journey of becoming a developed country? How do you see that?

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0:42:56.6 Amitabh Kant: So, United States is very, very important to my mind because it accounts for about 26% of global GDP. It accounts for about 46% of the market capitalization with just 4% of the population. And that's remained stable. The Europe has come down from 30% to 17% and it'll come down lower, but the United States has remained. It's a highly innovative society because of its universities.

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0:43:22.0 Sriram Viswanathan: Do you see the current blip? Is it a blip or is it a fundamental reshifting of alliances in your mind as it relates to the global partnerships that India has to look for?

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0:43:34.9 Amitabh Kant: No, it's a blip because Donald Trump is a very unusual politician. He's not a normal politician who believes in policies long-term. India had a very steady relationship with the United States. This was bipartisan in nature for the last two and a half decades. Quad relationship with Australia, Japan, United States, and India was built up through a bilateral, bipartisan relationship. A breakdown in all this really signifies that a lot of soul-searching needs to be done on the side of the United States. On our side, we truly believe that we need to work with the United States in a big way. We need to work because trade for us is important. No country in the world has grown without trade. You look at the post-World War II, whether it was Japan, whether it was Korea, whether it was China, all grew because they were able to export into the United States. And it's important that India becomes a major exporting nation. We've tried our best to work in close partnership with the United States. We continue to do that and we strongly believe that in the long run it is important for India and US to have a very positive, constructive and a mutually respectful relationship.

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0:44:50.2 Sriram Viswanathan: Talk about the supply chain diversification as well globally. And one of the things that I know you've been very active and vocal about is the China plus issue of supply chain resilience and diversification, it's really played very well to India's advantage, but it'll be recently. But now it seems like that is getting redrawn. Is this India's moment to really drive supply chain resilience in the context of this global reframing, or is that a second priority to energy independence? And how do you see these two things?

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0:45:26.6 Amitabh Kant: No, first of all, it's important to understand that what China is today, it's a supplier of close to about 80% to 85% of electric vehicles. It supplies about 80% of the battery manufacturing to the world. It supplies about 75% of the solar components to the world. It's all a consequence of America's dependence on China for manufacturing. The outsourcing of manufacturing in China happened as a consequence of the American geopolitical policies. So, China is a creation of the United States of America. Let's get that very clear. Now, it's important that the world doesn't make itself so dependent on one country. It's important from a global perspective.

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0:46:21.9 Sriram Viswanathan: But that's one that is true. I don't see you doing or I shouldn't say you, I mean the Indian government trying to do anything differently as you are trying to attract advanced deep tech companies like TSMC or Applied Materials or some of the key technology companies. The Indian government is also trying to attract such companies to come in here, or Nvidia, because there's nobody else in the Indian ecosystem that has the same sort of capability. So, you are almost going to have to do the same thing as what China did. So, you're not making the point that what China did was any different, are you?

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0:46:59.9 Amitabh Kant: No, no, I'm not saying that. All that I'm saying that it's important for India to do two things. One is use technology to leapfrog in some of these cutting-edge areas. Secondly, become highly competitive. And that is a function of enhancing your physical and technological infrastructure very, very sharply. And thirdly, become a very, very innovative nation. All this is critical. You need to do R&D, you need to push deep tech, you need to in a range of areas make the big jump forward, and that is what India is attempting to do.

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0:47:39.1 Sriram Viswanathan: So, if you were to project, I know this from the times of having less than 200 startups just a few years ago to tens of thousands of startups now with many unicorns. It's still hard for me to really wrap my head around a deep tech startup that has or a company of global significance coming out of India in the last 10 years. There would be a few, but predominantly it's all consumer internet, how do you deliver groceries faster and Ola and all of that. And how do you expect that to transition? Because I don't see those companies having global relevance. While they're all great companies, maybe they're great businesses and a lot of investors have backed them and all of that, that's all fantastic. But it is still a long stretch for us to think about the next Google or a next Nvidia or a next Broadcom or companies of that stature. It's gonna take a while for India to really get there. So, how do you bridge this gap between your ambition of becoming self-reliant in the deep tech space and also potentially becoming global leaders? That's the ambition versus the reality of where you are, which is largely IT services, largely sort of usage of technology, but not creators of new technology. How do you bridge that gap?

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0:49:02.3 Amitabh Kant: A number of young startups today are doing path-breaking work in drone manufacturing, or they're doing cutting-edge work in robotics. There are a number of companies, young startups working on AI funded. Look at Sarvam, look at Krutrim, for drones look at IdeaForge, look at Qure.ai.

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0:49:23.8 Sriram Viswanathan: It'd be cool.

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0:49:24.8 Amitabh Kant: Many, many. Or space... We opened up the space sector in a damn big way. We've opened up the geospatial sector in a very big way. So, there are many, many other startups. But the important point that you're making is that it's not just a few startups, but you create millions of startups in the deep tech area. I think the important thing there is that first and foremost, to my mind, you need to make your universities as the center for innovation. You need to ensure that a lot of innovation starts happening at the cutting-edge level of the universities where professors work with the students. Number two, allow the professors to take equity in their startups. Number three, allow a lot of VC funds to participate. Is the VC funds funding there? And don't worry about failures there. Allow failures to happen. Out of hundreds of failures, you'll have one or two success stories. But enable that ecosystem of innovation to really move forward at the university level and ensure that all these research centers of government, CSIR, et cetera, that have been built up do not work in isolation, but work with the universities.

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0:50:43.5 Amitabh Kant: All innovation must take place at the university level. And that will create exactly what the IIT Chennai Research Park does, that it ensures that university and IIT students then go on to start doing manufacturing at the research park or allow any other innovator to come in. Every single university of India must do innovation and work with the professors, enable them to take equity, allow a lot of VC funds to flow to that, and allow failures to take place.

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0:51:15.6 Sriram Viswanathan: It is still cumbersome to have capital flows to come in. It is still cumbersome to have tax policies that seem to be aligned with this vision that you paint. Unless there's a coherent strategy that supports this larger mission, there can always be, it's kind of like the lowest common denominator of inertia really dictates the pace at which things will move. And if something is stuck in SEBI or in RBI or in capital flow policies, all of the things that you're talking about will become still aspirational and will inhibit capital to really flow in. VCs cannot really come in to support these things. Do you think that the government is doing enough in focusing on that and removing bottlenecks in that area?

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0:52:04.7 Amitabh Kant: So, Sriram, a lot has been done in terms of ease of doing business at the Government of India level, but a lot more needs to be done in terms of radically overhauling ease of doing business at the state government level. Because India is a very large country. It's bigger than 24 countries of Europe. States have to be the driver of that. Second is that the regulators have to change their mindsets. The regulatory systems have to become very easy and simple. Thirdly, I think the change of mindset. The mindset has to be that India will grow only if there's free enterprise. Free enterprise will be the driver of India's growth story. It can't be the government. The government can only facilitate. Allow private sector to create wealth. Allow free enterprise to create. No country in the world has grown for long periods of time without free enterprise. That should be the spirit of India.

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0:52:58.6 Sriram Viswanathan: I completely agree with that. But if you were to compare some of the more successful models that have worked, whether it's in the US or parts of Europe and other places, the public money that goes into private industry that feeds the entrepreneurship cycle is a well-oiled machine. Many of the universities have endowments. There's lots and lots of capital. Some of these public universities, pension funds go into private capital. The private capital goes into innovative startups. That loop is a very efficient loop. In India, you don't have that because you don't have rich universities or endowments. Most of the capital has to come from the government directly. And how effective can that be? Because it's still very difficult for the government to start thinking about, let's capitalize something that has a greater than 50% chance of failure. Beause that's what is needed. You have to embrace risk and failure if you truly want to excel in finding the great companies. Do you think the government has that appetite for risk-taking and failure as is required?

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0:54:11.6 Amitabh Kant: Three things have to happen to my mind. First and foremost, like we did with Startup India, when we created a fund of funds, many startups failed. But you distance. The government must provide the resources, but distance itself from the governance of it. Allow private sector to run that fund of funds. Create a fund of funds for deep tech, but distance yourself. Allow your best private sector people to manage it. That's number one. Number two, push the private sector to spend more on R&D. India's private sector has been a laggard on R&D. So get them... Push them more through tax and many other benefits so that they can do cutting edge. There's a need for Indian pharma to move from generic to high value added. And there's a need for Indian companies to work on defense and space to push them into R&D. That's number two. Number three, to my mind, what the government should do is to throw up a lot of grand challenges, cutting-edge challenges. India needs to throw up. India needs to get clean water, for instance.

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0:55:19.7 Sriram Viswanathan: The man on the moon in 10 years kind of...

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0:55:22.4 Amitabh Kant: Absolute. So, throw 10 big grand challenges where government becomes the first buyer. Once you do that breakthrough, it'll succeed commercially if government is the first buyer. Government is the first buyer, and government is the first buyer. And then change all the procurement codes to enable that technology to flourish. If India does that, then India will find solutions to the challenges of not just the 1.4 billion people of India, but for the next 5 billion people of the world who are going to move from poverty to middle class. That's a huge, huge market. You will be able to build technology at low cost. I mean, you have a challenge in sewage in India. You have a challenge in making flyovers in India. You have a challenge of finding clean water. All this requires grand challenges, but with government as the first buyer.

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0:56:17.3 Sriram Viswanathan: So, that's a procurement decision. You're absolutely right. Because in China, as you know, lots of the early technology-related investments the Chinese government made came with a domestic procurement benefit for those opportunities. That made a huge difference for the likes of Huawei and ZTE to flourish. Huawei has completely transformed itself largely because of the support that the government had. Amitabh, I think you've just laid out a very wide band of sort of issues and opportunities that India has got, and there's a compelling case that you're making about what the government is doing. What could the government do more? If I were to ask you, where do you feel the government is not putting its entire muscle in or should do more of?

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0:57:07.5 Amitabh Kant: First and foremost, it's very important to understand that India is a very large country. There are certain things the central government will do, certain things the state governments must do.

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0:57:17.4 Sriram Viswanathan: Sure.

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0:57:17.8 Amitabh Kant: And the state governments must become easy and simple. India has grown in a socialist regime for a very long time. You need to dismantle that, and you need to bring in a mindset of free enterprise. And therefore, a lot of dismantling of rules, regulation, procedures has to be done at the state level. That's number one. Number two, if India's ambition is, as the Prime Minister spelled out, of Viksit Bharat, from $4 trillion to a $30 plus trillion economy, you need to be able to create a lot more infrastructure and do it to world-class standards. Whatever you do today in India, quality is important. That, to my mind, is very, very important. Number three, urbanization will be a very big driver of growth in the years to come. 500 million people are going to get into the process of urbanization. Every minute, we'll see 30 Indians moving from rural areas to urban areas. You need to create 500 cities of 1 million each. To be able to do that, you can't do this without getting the best of private sector to build good quality infrastructure. So, urbanization will be a very big driver of growth.

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0:58:41.6 Amitabh Kant: And fourthly, to be able to do all that, you drive manufacturing, drive urbanization, you need a cultural mindset change. You can't do this without a huge cultural change. That is, Indians must believe in quality, Indians must believe in integrity, and Indians must believe that Indians are going to take India to the $30 trillion economy with discipline. Discipline, quality, integrity must be the key hallmark of India moving from $4 trillion to a $30 plus trillion economy. Therefore, a cultural mindset change is important.

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0:59:24.7 Sriram Viswanathan: Well, Amitabh, thank you so much for sharing your insights. It's been just an incredibly enlightening conversation. I really appreciate you spending the time with us. And it's a great pleasure. Thank you once again.

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0:59:34.5 Amitabh Kant: Thank you.

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0:59:35.8 Sriram Viswanathan: Reforms, digital rails, global partnerships, and industrial policy are creating tailwinds. But technology leadership is ultimately measured in companies that win global markets. That raises the practical question, what needs to change inside the research and startup ecosystem for India to produce the next generation of deep tech category leaders? For that venture and founder lens, we now turn to TK Kurien, CEO and Managing Partner of Premji Invest and former CEO of Wipro. TK, thank you so much for joining me on this podcast. Let's talk about Premji Invest and your strategy and the sort of thematic bets that you're taking. Your assets are diversified across a number of sort of asset classes. You do public equities, you're investing in other funds, you're doing direct investing, you're doing structured products. And it's very hard to be good at many things. But you seem to have delivered an incredible return to your LP or parent while at the same time scaling your platform. And you're now almost four or five X your assets under management in the past eight years that you've been there. So, isn't it too much?

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1:00:58.3 TK Kurien: So, we've taken a very deliberate approach to partnerships. We know what we are good at and we grow. We also know what we are not good at.

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1:01:06.4 Sriram Viswanathan: What are you good at at Premji Invest?

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1:01:09.2 TK Kurien: We are a very good growth stage investor. Early stage doesn't come easily to us and naturally to us.

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1:01:16.3 Sriram Viswanathan: Especially because it's a lot of delayed gratification. And I would have thought as an operator, when you are starting new businesses, you would have been most qualified to have delayed gratification to start. But you went into only late stage and you didn't do any early stage.

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1:01:34.4 TK Kurien: The reason behind that is very simple. The corpus that we have is owned by the foundation. I did not want to take risks on the foundation money. I was very clear that certainty of return was more important than the quantum of return that I would get. So, I really in a way sacrificed that in the first stage. Once we became very good at that and our gravity moved towards that, one of the things that we have done in the US now is to really start something in the early stage.

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1:02:08.6 Sriram Viswanathan: So, you were probably the only industrial house out of India that has been as successful as you've been in making illiquid asset investments and had a tremendous success at that. You look at the folks at Reliance or Bharti or any of the other homes industrial houses, they don't have as comprehensive an investment program as you do. Now, the question that I really wonder is that India, for all the great opportunities that exist for growth as the fastest growing economy, bulk of your investment is not in India, it's outside of India. Is that a fair statement?

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1:02:49.9 TK Kurien: No, it isn't.

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1:02:50.7 Sriram Viswanathan: Okay.

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1:02:51.4 TK Kurien: Bulk of our investment is in India.

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1:02:53.4 Sriram Viswanathan: In dollar terms, it's in India?

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1:02:55.2 TK Kurien: $9 billion out of our 13 billion sits in India.

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1:02:57.7 Sriram Viswanathan: I see. I didn't realize that.

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1:02:58.1 TK Kurien: 9 billion. And the bets that we have made in the US are basically technology bets. The idea was, can we bring the technology back into India and make it effective? Do we have a point of view with what's happening on the bleeding edge for us to adopt it in India? I think that was the whole idea behind it.

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1:03:16.2 Sriram Viswanathan: So, on a currency adjusted basis and market growth adjusted basis, which has been a better market for you to invest in?

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1:03:24.5 TK Kurien: The top two markets in the world have been India and the US for the past 15 years.

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1:03:29.4 Sriram Viswanathan: Right. But you're in a unique situation because you're taking rupee capital and putting it in India and by definition, the rupee is depreciating. Your returns are goosed up in a way because of currency also.

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1:03:42.3 TK Kurien: So, even with currency gains, my India-US returns are more or less comparable.

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1:03:49.1 Sriram Viswanathan: Really? So, you mean after you normalize it, it's still comparable?

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1:03:56.8 TK Kurien: Surprisingly, what happens is people think that you cannot make money in India. You can make a lot of money in India if you're smart about putting money into India at the right time and backing the right founders. I think the biggest challenge that we had at a stage in India was that everybody across the world believed that there was money to be made in India and there was so much of supply of capital that valuations went completely haywire. We stayed out of that. And the next... Because we really didn't find companies with either a technology differentiation or a great management differentiation or both.

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1:04:34.9 Sriram Viswanathan: Got it.

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1:04:35.7 TK Kurien: There were very, very few that we could pick up. Some of the ones that we backed done extremely well.

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1:04:42.0 Sriram Viswanathan: Yeah.

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1:04:42.9 TK Kurien: So, I think the next phase for us is really to look at that because we believe that in India, especially with the geopolitics around, I think India needs to develop its own technology.

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1:04:54.8 Sriram Viswanathan: I'm quite intrigued by your comment that you're actually investing quite a bit in India. And in a way, you've actually been doing that well before the government has started now to attract a lot of people with a view towards investing more in India. So, let's just talk about what your views are on what the government is doing. Without getting into specifics, do you think that the government getting involved in attracting or incentivizing folks like you and others to do more in India, is that the right thing? Do you think they are doing enough? What's your view?

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1:05:28.5 TK Kurien: So, I think there are a couple of things here. One is that for a startup environment to work effectively and if you have to recreate what is already there in the Valley, I think the biggest thing that all of us have to do as investors is to make sure that we have an ecosystem running which is thriving, which is the connection between the people who have money and the people who have ideas, and the bridge in between, which is academia back to business and getting that network in place. I think it's a very, very critical role that all of us have to play. Unfortunately, what's happened is that we've always been, in a way, constrained in India for lack of capital. Capital has been a big issue. First, I think it's a lack of capital, lack of capital to actually chase risky ideas.

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1:06:19.5 Sriram Viswanathan: Right.

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1:06:20.4 TK Kurien: See, very investor in India, most investors in India would believe that if they're going to put X amount of money, they would like to get a certain return from it. Nobody is playing for those big hits and those big losses. We are in the business where we say, okay, we'll make five investments, we lose one, so be it. We'll make money on the balance four. That's not a mindset that's natural for people. Many firms take different approaches. Everybody takes, they distribute their capital across 50 firms and hope that if you've chosen the folks with the right pedigree, some of them will do well and produce extraordinary returns.

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1:06:58.8 TK Kurien: But there are very, very few of them backing real core technology. So, if you look at India, India's been very, very good in terms of business model innovation. What works in the West has been taken, replicated with modifications for India, and they've done very well there. But real core technology, very, very little has come out of India. And that's because of two reasons. Number one is it needs enormous staying power.

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1:07:27.1 Secretary S. Krishnan: Patience.

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1:07:27.7 TK Kurien: Patience. Investors don't have patience. Second is the ecosystem, because there are very few success stories, the ecosystem hasn't been built. So, it's a little bit of a chicken and egg. And I think the government coming in in this and providing the incentives would hopefully start that process.

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1:07:47.5 Sriram Viswanathan: This is fantastic because this is exactly what the government has announced. So, do you think something dramatic has happened in the government bureaucracy that actually has seen the light based on what's going on, or why is that happening now?

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1:08:00.3 TK Kurien: If you look at the big technology changes that happened, semiconductors, artificial intelligence, we seem to have missed quite a few of them already. And if you go back again and look at the Valley, a lot of the people you see there are people from India who have done this.

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1:08:16.8 Sriram Viswanathan: That's right.

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1:08:17.2 TK Kurien: So, you ask yourself a very fundamental question. What is the environment there that makes sense for the same guy to move from India and do well, which India cannot provide? And to a large extent, I think the government is trying to answer that fundamental question.

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1:08:34.9 Sriram Viswanathan: Well, in a way, you could also argue that the tailwind for India to succeed in attracting talent back to India to potentially leapfrog in some of these sectors with the right amount of incentives. In that context, do you think what the government is doing now is enough, or would you wish they would do more? And if so, what kind of things would you want them to do more of?

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1:09:00.5 TK Kurien: I think the government is doing its part.

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1:09:02.5 Sriram Viswanathan: Yeah.

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1:09:02.9 TK Kurien: I think we have to now do our part.

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1:09:04.9 Sriram Viswanathan: Sure.

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1:09:06.0 TK Kurien: And that, I think, is gonna be more difficult. So, I think the government can provide billion dollars, they can provide 3x. Those are all great fiscal incentives.

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1:09:16.3 Sriram Viswanathan: Right.

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1:09:16.8 TK Kurien: But they can't create an ecosystem. We have to create the ecosystem.

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1:09:19.8 Sriram Viswanathan: So, it's to be seen how this evolves. If you were to give yourself a metric that you would measure yourself, of course, the financial returns would be an obvious metric—but what are the other metrics that you would look at measuring yourself in the context of you helping create this ecosystem in India?

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1:09:37.2 TK Kurien: Simple. I think if you go back and look at it... Yeah, I was talking to somebody, it's kind of funny, from the US who's very big in AI. So he said, "I've come to India and I've talked to people, I've met a lot of founders. I haven't found good companies." So, I heard him out and I said, "Why do you think that is?" And along the way, he made one comment I thought was very interesting. He said, "Intellectually you're very bright people. Everybody can critique a model extremely well. But they can't do it. Why is that?"

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1:10:09.0 Sriram Viswanathan: Well, it's funny. I won't name the geography, but I think you will get my drift. It's another geography where entrepreneurs are often found to go into a room, two of them will go in, come out with three opinions. And India has that sort of thing as well. Maybe this is in our cultural DNA of arguing. But I think the amazing thing that you just mentioned, which is the same people in a different environment are able to create incredible value. My own personal experience has been that we're an investor here, we see that excitement pretty amazingly scaling in the last five plus years. Crystal ball for me. What do you think this is gonna look like five years from now? Are we on a straight line? Are we exponentially growing in this area? What's your view on the India opportunity?

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1:10:56.6 TK Kurien: Let me draw a contrast with China.

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1:10:58.0 Sriram Viswanathan: Right.

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1:10:58.7 TK Kurien: It's a very good contrast to draw because it gives you a sense of what is possible.

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1:11:02.4 Sriram Viswanathan: Right.

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1:11:03.5 TK Kurien: I remember going to China, and the first joint venture that GE did in China was with the PLA.

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1:11:11.0 Sriram Viswanathan: Yep.

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1:11:11.5 TK Kurien: The People's Liberation Army. And it was a 51-49 joint venture. 49 was owned by the PLA and 51 was owned by GE. And Beijing was a dusty little city. There was a single lane highway from the airport. You couldn't walk around in the evening because pollution was terrible. And the only hotel that you could stay in was the Kempinski. And of course, they used to come and go through all your baggage. So, every time you left the hotel room and came back, you could find all your clothes all over the place. And more importantly, my toothbrush was the most difficult one to locate. I don't know why they couldn't manage that problem. But anyway, that's how it was. China took a view that they are going to be really... They're going to dominate the world in certain technologies, starting with Huawei and telecom. They did an absolutely brilliant job where that was the national policy. Everybody bought. If you remember, there were two companies at that point of time. Huawei dominated that. ZTE kind of fell away. And then they decided to go global. I still remember the first thing that they did when they went into UK was that they went out there and got the influencers in the telecommunications community, which was people in British Telecom.

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1:12:31.0 TK Kurien: They convinced them that this was, number one, at a significantly lower price. Their service levels were absolutely outstanding. Their software sucked, but they were willing to live with it because the pricing was so much better. They really dominated that space. And I'm pretty sure that Huawei didn't make too much of money at that point of time in telecom equipment. Government support was massive to make them grow. Then they picked up, look at batteries.

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1:12:57.0 Sriram Viswanathan: Yeah.

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1:12:58.0 TK Kurien: Rare earths. So, one by one they've gone after industries.

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1:13:01.5 Sriram Viswanathan: Yeah.

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1:13:02.4 TK Kurien: I think the trick for us is as a country we should be very clear that we can't spray our money across 50 different industries.

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1:13:10.8 Sriram Viswanathan: Yeah.

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1:13:11.7 TK Kurien: We have to pick national leaders that we believe are really going to be...

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1:13:15.5 Sriram Viswanathan: As in sectors?

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1:13:16.5 TK Kurien: In sectors, yeah.

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1:13:17.3 Sriram Viswanathan: So let's say you're running... You're the man on the top job here in Delhi. What would that be? What are the three sectors that you think India has the highest potential for success?

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1:13:27.3 TK Kurien: That's the worst job on earth. Trust me, I wouldn't want the job.

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1:13:31.6 Sriram Viswanathan: Yes. But let's just pretend.

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1:13:33.9 TK Kurien: Lots of criticism, very little money, and a lot of hard work.

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1:13:36.4 Sriram Viswanathan: Yeah, exactly. What sounds like my day job.

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1:13:40.0 TK Kurien: Not something you want to do. But if I look at it... If you look at AI as a theme, what's happened is that a lot of the work is now being done around models. But remember, these are LLMs. Language by itself has an inherent issue in terms of representation. If I say the sky is blue, the way you think of blue and the way I think of blue may be very different. But yet, I think language models by themselves and the derivatives thereon on the application side, I think it's a massive opportunity for India.

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1:14:18.2 Sriram Viswanathan: So, you're still sort of going with the evolution of the whole IT services model where software is the bigger priority is what it sounds like.

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1:14:27.5 TK Kurien: It's not software. I think the whole agentic framework basically means that you have to now define roles with a degree of specificity for agents to be effective. That knowledge of how, what is the specificity sits in India because the work is being done out of India. And it would be a crying shame if we don't do something there.

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1:14:53.0 Sriram Viswanathan: I get it. Right. Okay. Well, that's a good one.

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1:14:55.4 TK Kurien: Okay that's one. Second is that after this, the next big evolution is gonna be in biotech. China's gone way ahead. Compute side, this quantum coming on, US has gone way ahead. China is following. So, if you look at the newer areas which are gonna come at us maybe five, seven, nine years down the line, and there are a whole bunch of them there. We have to pick one or two that we believe that we're gonna bet on. And we have to direct our scientific community, our dollars from a VC perspective, bring back talent abroad that has got competence in the area, and create a framework where we can really, really create something that all of us are proud of in India.

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1:15:41.5 Sriram Viswanathan: Well, it sounds like it's a little different than where the market is today in biotech or life sciences in India. There are some green shoots, but predominantly it's outsourced chemistry. People are doing far more efficient way of drug discovery and maybe doing contract research work for other big pharma. So, you're thinking that that should change to what you just talked about, which is fundamental research to bring new modalities.

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1:16:10.5 TK Kurien: Absolutely. Because what happens is that if you're not ahead of the curve in terms of knowledge...

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1:16:16.0 Sriram Viswanathan: Okay, that's the second one.

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1:16:17.1 TK Kurien: You're fundamentally left behind.

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1:16:19.6 Sriram Viswanathan: Sure. Is there a third one?

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1:16:22.1 TK Kurien: Well, I think semiconductors is another area which I think is a great opportunity. I have a slightly different approach there. We have to do enough that's required in India to be self-sufficient. We shouldn't end up doing so much in India where we are uncompetitive. I think that's a thin line.

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1:16:43.3 Sriram Viswanathan: Before we close, if you're a startup in India today in the current environment from in all these three areas, AI, life sciences, and possibly semiconductors, what's one or two pieces of advice you would give them in this fast-changing world versus what you would have told somebody 25 years ago as you were coming out of GE? Is there a difference or is it the same metrics?

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1:17:09.3 TK Kurien: Absolutely different. Those days I'd have told people, "Hey, listen, make money." Now I would say, you know what there are people willing to back you today really long-term if you build something which can really sustain, which is sustainable and which can be world-beating. I think that is the ambition that we need to have here.

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1:17:28.8 Sriram Viswanathan: That's a great place to end this because the government is also trying to do that. I really applaud the government on what they are trying to do. And folks like yourselves at PI and Celesta and a number of others are trying to play a role in this ecosystem. So, great. Congratulations, TK, for all the great work that you've done and your successes. I'm delighted to be your partner and hopefully we'll do lots of things together. Thanks once again for coming on this podcast.

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1:17:58.1 TK Kurien: Thank you, Sriram. And thank you for being a great partner.

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1:18:01.7 Sriram Viswanathan: Three vantage points, but one story. India is building a policy stack designed for deep tech. Today's geopolitical context makes this extremely urgent. The real bottlenecks quickly reveal themselves as execution and discipline focus on a few arenas where India can win globally. Across these conversations, clear patterns begin to emerge. Policy sets direction, strategy enables scale, and markets enforce discipline. India's deep tech future will not be built by any one of these alone. It'll be built when all these three factors align over time with patience and with the willingness to embrace risk. In the end, India's deep tech moment will be measured by the success of the companies that are built and that become global market leaders in time to come. Thank you for tuning in to the Tech Surge podcast from Celesta Capital. If you enjoy this episode, feel free to share it, subscribe, or leave us a review on your favorite podcast platform. We'll be back every two weeks with more insights and discussions of all things deep tech. Bye for now.

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