By Dr. Jaijit Bhattacharya
From technology flows wealth. Technology can thus play a major role in accelerating the Indian economy, but would require focus on attaining leadership in various niche technological fields. India is currently laying emphasis on technologies such as , Additive Manufacturing, Drones, etc. This paper, however, looks at certain specific technologies on which India’s focus is either inadequate or absent. Emphasis needs to be laid on these areas too, else India will be left behind, once again, in the technological race.
India’s wealth, till about two centuries ago, was mostly acquired by selling technology driven products to the rest of the world such as cutting edge wootz steel (used for weapon making and making of the famous Damascus steel), high purity zinc, very large ships et al. It is also worth noting that 50% of entire Netherland’s textiles and 80% of its silk came from Bengal in the 17th century. Both textiles and silk are products of technology. India also had great capability in ship building, which literally was driving British shipwrights to starvation. To save its ship building industry, the British resorted to legislation to throttle and kill the Indian shipbuilding industry.
As per the archives of the British parliament, a petition of several ship-builders of Great Yarmouth was presented to the British parliament in February 5, 1813. The petition begged that letting India-built ships to compete with British ships “will render precarious the means of maintaining his Majesty’s navy, and especially of fitting out with dispatch, his Majesty’s fleets on pressing emergencies, and will thereby undermine that great bulwark of our independence and greatness as a nation.” Consequently, the first legislative act of 1813 prohibited ships below 350 tonnes from plying between the Indian colonies and the United Kingdom. That took away 40 per cent of Bengal and Surat built ships out of the lucrative India-England trade. The second Act in 1814 denied Indian-built ships to be registered as British, to trade with the United States and the European continent. This was the “atmanirbhar” steps taken by the British in the 19th century, to protect themselves from the onslaught of the superior Indian ships.
This one piece of technology, ship-building, clearly demonstrates the role of advanced technologies in the export basket of India, till about 18th century. It also underlines how technologically backward nations such as Britain, were able to claw into global technological leadership through a general policy of using a combination of regulations, standards and incentives to protect the domestic uncompetitive, technology-driven industries and to acquire technological competitive advantage. The above example amply demonstrates the role of government in ensuring that its domestic economy gains technological edge. Similar principles have been followed by all the advanced economies, including the USA, Japan, South Korea and China, among other nations of the world.
India has continuously missed “catching the bus” when it comes to industrial technologies. We either betted on too long-term a technology, or remained bystanders to new industrial technologies coming up, and then tried to play catch-up for the next few decades. Even when Indian industry was there at the right time, such as automobiles or television, we almost succeeded in throttling our domestic industry through poor policies, leading to near-death experiences. In other cases, such as the development of the Electric Vehicle (EV) industry and the associated battery industry, while the rest of the key economies globally unleashed a series of government policies towards the end of the first decade of this century, India simply watched. And now, we are playing catch-up in the EV industry, while being heavily dependent on economies such as China for key components and batteries.
What India needs is a dedicated institutionalised approach to acquiring technology. This paper focuses on a set of technologies that are economically critical for India, and on which more policy focus is required than what is being given currently. These technologies are in the cusp of disrupting existing industries and can potentially contribute to more than 5% of the USD 5 trillion economy that India wants to achieve in the near future.
Supersonic Transport Aircrafts
Supersonic passenger aircrafts are the next generation of passenger aircrafts, which will transform aviation. India can ill-afford to sit idle while others take the lead. Since the start of large-scale commercial aviation, the world has been pretty much stuck at commercial flights cruising at mach 0.8 speed. Crossing the sound barrier is a significant technological leap, given the myriad engineering challenges like managing turbulence, change in wing angles and the sonic boom. Due to the sonic boom impact on residential buildings and the nuisance value of the sound produced, the first successful commercial supersonic aircraft, the Concorde, was mandated to fly transatlantic, and was prohibited to have supersonic speeds while flying over land. Sadly, the Concordes were retired after flying for a little over 25 years. They were ultimately marred by a devastating accident, which contributed towards reduced profitability. The last flight took place in 2003, and the remaining Concordes were moth-balled and left at museums, as the operating costs exceeded the earnings.
However, there is a renewed interest now, globally, for supersonic flights, primarily due to time savings. Supersonic flight can cut down the travel time from say London to New York from 6.5 hours to a mere 3.5 hours. One could potentially, fly out in the morning from London to New York, finish work and come back to London before the day ends. Similarly, a Delhi-New York flight can be completed in 8 hours instead of the current 15.5 hours. And with further development of higher speed supersonic flights, these times can be further reduced. Such possibilities have led to a scramble for the development of the next generation of supersonic aircrafts, which are less noisy, more fuel efficient and faster than anything that we have seen earlier. These aircraft can redefine the airlines industry as we know it today.
Among the new crop of startups that have ventured into design, development and manufacturing of supersonic passenger aircrafts, is Boom Supersonic. They are building supersonic aircrafts where the sonic boom will not be noticeable, and their vision is to provide supersonic flights at USD 100 per seat, to anywhere in the world. It is an incredible vision. They are also the front-runners to being adopted by many airlines, including United Airlines, which plans to roll out supersonic routes using the USD 200 m Boom Overture Supersonic aircrafts, by as early as 2029.
Boom Supersonic is joined by startups that are focusing on smaller supersonic business jets, catering to the personal jets/ chartered jet market. Exosonic, again an American startup for supersonic transport aircraft, hopes to receive certification for its supersonic aircraft by 2029. Exosonic has also received a contract from the US Airforce to build the Air Force One for the President of the United States. Hermeus is another American startup which is building what is called a hypersonic aircraft, that can fly at five times the speed of sound. This is indeed the future. It will be having a range of 4,600 miles. It too has received funding from the US Air Force and it too is building an aircraft for Air Force One fleet.
The West Asian economies too, in a bid to diversify away from an oil-based economy, have jumped into the supersonic aircraft fray, with Mubadala, the Emirati sovereign investment fund, joining hands with Russia, to build a new supersonic transport aircraft from scratch. The Russians obviously come with a treasure trove of experience, having built the world’s first supersonic transport aircraft, the Tupulev Tu-144, that flew till 1999. More recently, they have been flying the supersonic Tupulev Tu-160. However, to be successful in the commercial market, the aircrafts need to make economic sense, and so Russia and Mubadala of UAE are going together for a brand new aircraft, built from scratch.
We also have Spike Aerospace, founded by Indian origin American, Vik Kachoria. It has an interesting design as it has no windows, and yet passengers can see everything outside, through a panoramic internal display that is connected to cameras outside. In fact, we also have Tech Mahindra contributing to this project by leveraging its prowess in engineering, optimisation and composites. Some others such as Aerian Supersonic, who have been working on smaller supersonic business jets, but had to suddenly shut shop as funding dried out. These are the vagaries of working on the cutting edge.
India, unfortunately, does not yet have a noticeable transport aircraft manufacturing industry, leave alone a supersonic transport aircraft. Being left behind in almost a trillion-dollar industry, will not do any good to India’s ambitions of becoming a USD 5 trillion economy and more in the near future. More importantly, India will be left out of a very critical technology that will also have strategic applications. Imagine having low sonic boom hypersonic bombers, which may be hard to detect on radars. India cannot afford to be a passive bystander to the fast-developing world of supersonic aviation. We need to act now to get on to this bus.
Artificial Meat and Artificial Agricultural Produce
Artificial meat refers to cultured meat, produced by in vitro cell cultures of animal cells. It is a form of cellular agriculture. It basically takes a single cell of an animal, and reproduces the same in the lab to make large chunks of uniform meat. Cultured meat and its technologies are critical for a world getting deeply impacted by climate change.
The Intergovernmental Panel on Climate Change (IPCC) of the United Nations, in its latest report, highlights the devastating impact climate change will have on the world, which can only be halted if we cut back on greenhouse gas emissions. As livestock, raised for meat consumption, contributes to over 14% of all greenhouse gas emissions, the production of artificial meat will help in fighting the impact of climate change.
By December of 2020, we already had the first restaurant selling cultured meat. This was the “1880” restaurant in Singapore, where cultured meat manufactured by the US firm Eat Just was sold. The first hamburger patty grown directly from cells happened even earlier in 2013, when professor Mark Post at Maastricht University pioneered a proof-of-concept for cultured meat by creating the cultured meat hamburger patty. Since then, other cultured meat prototypes have gained media attention.
Cultured meat is still not a “stabilised” technology. Numerous challenges remain in growing artificial meat at a commercial scale, that completely looks and tastes like real meat and can be produced at a lower cost and with a lower environmental footprint compared to current livestock-based meat production. It also requires fetal bovine serum that involves killing of a pregnant cattle. Although such issues are also getting technologically resolved to produce meat where no animal has to be killed, there are other issues such as being able to grow fat and muscle cells together, just like in real meat. There are also regulatory and ethical challenges. However, cultured meat will have very significant impact on our lives and our food industry at this current juncture when we have extremely inefficient manner of livestock-based meat production that is responsible for significant deforestation and for greenhouse gas emissions. The current livestock-based meat production is both cruel and unsustainable. The world needs to move to slaughter-free meat, which will also help in preserving our environment. India too, can least afford to ignore this technology.
It is interesting to note that the technology used for manufacturing cultured meat can also be used to manufacture fruits and vegetables and cereals and pulses. All agricultural produces can be manufactured in the same manner, thus reducing pressure on land and reversing deforestation. This is critical from an environmental perspective. Also, we would not need to spend enormous amounts on supply-chain and trucking costs in transporting food from rural areas to urban areas as the food can be manufactured in urban factories, thus further reducing greenhouse gas emissions. Such technology also has space applications. Astronauts would not need to carry large amounts of food to space, as they would be able to manufacture them in small petri dishes.
The implications of cultured meat are enormous. Many start-ups and government funded laboratories in US, Europe, Argentina, Australia and Israel are jumping into the fray, and one would not be surprised if China too, also has its own entities doing research and development in this area. However, India with over 16% of the global population, seems to be starkly missing in this race, again letting the bus pass by. We therefore need to look into not only cultured meat but also cultured agri produces.
India has already signalled its intent to develop capabilities in quantum computing—a field of computing which leverages the collective properties of quantum states to perform computation. This is based on a branch of physics called Quantum mechanics, where a particle can be in multiple states at the same time, and it explains the aspects of nature at small (atomic and subatomic) scales, for which classical mechanics is insufficient.
Quantum computing is a critical technology because Quantum computers are believed to be able to solve certain computational problems, many times faster than classical computers. Quantum computing is now expected to become mainstream in the next few years as the field shifts toward real-world use in pharmaceutical, data security and other applications.
In the Union Budget announced in February 2020, a sum of Rs 8,000 crore has been allocated for setting up a National Mission on Quantum Technologies & Applications (NM-QTA). It is one of the technologies that India can ill-afford to miss. Indian initiatives must quickly lead to achieving Quantum Supremacy. The term Quantum Supremacy does not describe hegemony but stands for the theoretical case where quantum computers are believed to be able to quickly solve certain problems that no classical computer can solve in any feasible amount of time.
As of now, quantum computing still has a long way to go and a number of technical challenges remain in building a large-scale quantum computer. Sourcing parts for quantum computers is also challenging. Many quantum computers, like the ones made by IBM and Google require Helium-3, which industrially can be made only through nuclear reactions. Also, the special superconducting cables are made only by a Japanese company, Coax Co, thus creating severe vendor dependency and perhaps vendor lock-in.
In October 2019, a Sycamore processor (a Google quantum processor) created in conjunction with Google AI Quantum was reported to have achieved quantum supremacy, with calculations more than 3,000,000 times as fast as those of Summit, an IBM supercomputer that is currently one of the fastest supercomputers in the world. By December 2020, even Chinese universities were reportedly having success in quantum computing. But that still does not imply that it will lead to a multi-billion dollar industry and lead to new jobs getting created, as in the case of supersonic transport aircraft and artificial meat. So why should India spend its scarce resources in quantum computing?
The answer lies in the extremely profound impact on the world that quantum computing will have in the manner we live and interact and do business and banking and communication. It would make all current banking encryption useless, the day it achieves demonstrable quantum supremacy. It would entail reworking of our cybersecurity systems and frameworks. It would have a deep impact on the cybersecurity of not just banks but of entire nations. Nations that do not possess quantum computing technology, will become extremely vulnerable. India cannot be caught in such a situation.
The economic upsides of quantum computing are also very significant. India already has small pockets of expertise, that are developing algorithms for quantum computing. And as India gets around to spend the Rs 8,000 crore of its budgeted money, it must have clear achievable goals so that the money is not frittered away without any outcomes. Also, to be clear, as I have written many times before, technology is not a patent created or bought, neither is it a set of techniques written down in a book. It is a team of humans who are actually working on the technology and improving on it on a daily basis. And hence, a significant amount from that Rs 8,000 crore needs to be spent to create the human resources that can absorb and develop quantum computing. That is why the Japanese have a yardstick of spending 10 dollars on technology assimilation for every dollar of technology procured. India too, needs to change its mechanisms for technology acquisition.
This brings us back to the issue of an institutional structure required for technology acquisition—an empowered body having a national perspective. Otherwise, our efforts will be splintered into multiple bodies and groups, which may even work at cross-purposes, to the detriment of the nation. Only then can we achieve supremacy in quantum computing and other technologies.
Robotics is an exploding market, with new players jumping in. India has a nucleus of a very successful robotics private sector, albeit still in early stages. We need to focus on growing this industry to be able to serve unique Indian requirements as well as for exports.
Today, robots are playing an increasingly critical role in lives of people, be it in
manufacturing, or in the services sector as receptionists, nurses, firefighters or as soldiers. Robotics has now reached a level where a combination of technologies will make the robotics industry explode in the near future. We have artificial intelligence combining with speech technologies, sensors and all-pervasive connectivity, leading to more powerful and more useful robots getting created. In the not-too-distant future, we will also have autonomous vehicle.
Robotics is thus another “big bus” that we are poised to miss, if we do not act now. While the country does have numerous startups and deep skills in robotics, it is not enough to be able to get any significant slice of the global robotics market. Moreover, India needs robots for its own unique usage, such as replacing dangerous manual scavenging with robots, or tackling terrorism. For that matter, even though India is a young nation with perhaps the largest population of people below 24, we are also home to one of the largest populations of the old, who would need support through robotics. Robotics can also play a key role in providing quality education and also in other fields such as healthcare, agriculture, mining etc.
Globally, the robotics market size, valued at USD103.95 billion in 2019, is projected to grow to USD 209 billion by 2025. This is a conservative estimate. With the maturing of the enabling technologies and greater adoption of robotics in emerging economies, the size of the robotics market is set to explode. In fact, in October 2017, Saudi Arabia even granted citizenship to a robot named Sophia, making it the first robot citizen of the world.
With new-age players like Tesla, GreyOrange (an Indian company) etc. entering the global robotics market to join the earlier entrants like ABB, Hitachi and Mitsubishi, the market will further democratise and expand. From an Indian policy perspective, robotics has figured in Indian Economic Survey 2017-18 as a priority area, but it has drawn limited attention in terms of policy or plan. In parallel, the developments in private sector and few research institutions in India has been laudable. In the paper, “Robotics in India”, published in the Journals of India, several impediments had been identified for development of robotics in India. These include lack of a robotics hardware ecosystem resulting in imports of most of the components for robotics. In addition, regulatory issues on dual-use certifications is leading to challenges in certifications. The high import duties (in some cases), and bottlenecks in customs as part of the permission driven environments, is also playing a deadening hand.
India also has many financial disincentives built in. Any company which imports robots into India, currently pays about 26.85% tax (7.5 basic customs duty plus 18% GST). This is a serious impediment to mass adoption of robots, which is compounded by limited availability of critical human resources. According to the FICCI-TSMG Advanced Manufacturing Survey 2016, lack of quality human resources with necessary skills and expertise to work with advanced manufacturing technologies, negatively impacts the ability to undertake cutting edge R&D in India. There is also a significant mindset shift required in order to grow the industry. In spite of the Government’s focus on robotics lately, the notion that robots will destroy jobs, severely hampers an enthusiastic adoption of the technology and the growth of the market. Fortunately, India has a strong IT base, that can provide the fuel to propel the robotics industry. India must therefore, leverage its advantages to be able to be a net exporter of robots in the near future and quickly harness policy and regulatory tools to achieve global leadership in robotics.
Central Bank Digital Currency
The movement towards Central Bank Digital Currency has potential to transform flow of money. However, myriad issues need to be solved before such an instrument can be brought in. There has been a raging debate on cryptocurrencies since the creation of the Bitcoin. A cryptocurrency is a secure digital store of value and hence is a possible alternative to currencies. However, there are multiple issues with cryptocurrencies that need to be resolved, before they can truly emerge as an alternative to currency.
The legal status of cryptocurrency, in most places, is that of a commodity. Just as one is free to buy or sell commodities like gold, silver, pulses, grains etc, one is free to buy and sell digital stores of value, that is cryptocurrencies, as long as it is not harmful. This is where some of the issues with cryptocurrency come up. They seem to have aspects that are harmful to the financial sector.
In a recent case, a Chinese national was caught money-laundering using the crypto exchange WazirX. He had bought cryptos (short for cryptocurrency) on the WazirX exchange and converted them into dollars on the Binance exchange, outside of India, which enabled him to siphon money out of India (WazirX and Binance shared the same digital store of value). These are the challenges of using cryptocurrency from a monetary management perspective. Any economic offender fugitive can simply convert money earned from illegal operations into a crypto, put it on a pen drive, and fly out with that money. Unfortunately, this is what makes cryptos popular. Essentially, there is anonymity attached to crypto, and hence its use is preferred for doing illegal transactions. Governments and law enforcement agencies are trying to plug these loopholes in the cryptos, and make them workable currencies.
The legal-comic part of the WazirX case is that the Directors cannot be charged for complicity in foreign exchange violation. The legal position is that cryptocurrencies are considered as a commodity and not as a currency in India. Hence, as no currencies are involved, no foreign exchange violation has taken place! This comic angle actually demonstrates that cryptos cannot be glibly treated as commodities either, as they are far more powerful. One can transport the equivalent of 10 tonnes of gold in a small 10 gram pen drive, by using crypto, and no customs in the world can catch it.
However, even if these issues of money-laundering and funding of terrorism are addressed, there is still the issue of central banks, such as the Reserve Bank of India (RBI), losing an important monetary tool, wherein the Central Bank could “print money” and increase the money supply at times such as the current times where the government has funds pressures due to the Covid-19 pandemic. A non-sovereign crypto, that is a crypto that is not under the control of any government, takes away the power to exercise these important monetary tools, as extra cryptos cannot be released. Those who support early adoption of cryptos, in fact see this as a positive feature, since it prevents an irresponsible central bank and an irresponsible government from printing excess money which would have an inflationary impact and would be tantamount to “stealing” money from people’s pockets. However, in certain circumstances, such as the current post-pandemic economic situation where demand has dimmed and the vulnerable sections of the society need cash in hand, it is important to print money and provide such support, so that the economy survives. A crypto prevents such a step from being taken, thereby threatening the entire economy.
Can we take the best of the cryptocurrency, mitigate its risks and create something more robust, wherein people can actually use the cryptocurrency and increase efficiency in the economy? This is where the concept of Central Bank Digital Currency or CBDC comes in. CBDC is a concept wherein the central bank issues a cryptocurrency that can possibly be pegged to a fiat currency, or managed in a different manner, but under the control and monitoring of the Central Bank, so that issues of KYC (Know Your Customer), AML (Anti Money Laundering), CFT (Combating Financing of Terrorism) and monetary policy issues could be addressed, especially for large value transactions. However, by taking away anonymity in CBDC, one also takes away some of the attractiveness of the crypto. But then it is anonymity that is the bane of crypto from a law enforcement perspective, that a CBDC will solve.
However, a CBDC by itself is not a panacea for crypto adoption. A CBDC still poses issues that need to be resolved. So, if India adopts a CBDC—let’s just call it ‘IndiaCoin’ for now—the first to get impacted would be the banks. Large transactions would no longer be needed to be routed through banks or the hordes of neo-banking startups. So, the banks would have to reinvent themselves to stay relevant, as a considerable part of their business will get hit. In fact, the US Federal Reserve Bank and the Massachusetts Institute of Technology’s Digital Currency Initiative will soon be publishing the first stage of their work to determine whether a Fed virtual currency would work on a practical level. This would also be seen as a response to China’s CBDC as well as a response to the plethora of cryptocurrencies that are all over the place.
Replacing the multitude of cryptocurrencies with a single CBDC resembles the step the federal government of US took in the 19th century, when it stopped the circulation of various currencies issued by a plethora of banks in the US, and replaced them with a single currency, the US Dollar, issued by the Federal Reserve Bank.
An ‘IndiaCoin’ CBDC would help in many national initiatives such as DBT (Direct Benefit Transfer), wherein support to the vulnerable can be transferred directly to them, without the need of a banking intermediary, thereby increasing the efficiency. Businesses and civic society can issue payments directly to each other, without the need to go through banks, and save enormous costs. But it also comes with the fear that during any crisis, people can quickly withdraw large amounts of money from banks, into a simple small pen drive, and that can lead to a run on the banks and thus lead to a banking crisis and failure of the financial systems. Also, it is not really clear if an ‘IndiaCoin’ would be cheaper than paper currency, since the cost of running the cryptos is supposed to be very high, depending on what algorithm is used.
However, many of these issues are solvable. And once solved, an ‘IndiaCoin’ would bring in tremendous benefits to the economy, with payments being pushed into the background as they would get linked to smart-contracts, smart vehicles, smart roads and so on, where automatic triggers would lead to flow of payments. It is a welcome move that Indian institutions and the government are discussing such a possibility, and are treading carefully forward rather than rushing in.
We need a policy to accelerate self-reliance in India, similar to what the British adopted in the 18th century, to protect its fledgling industries from competition. The policy should enable an environment whereby the required goods and services can be created from within the country, rather than getting them from other economies. However, it is neither to be confused with the erstwhile “License Raj” that hollowed out India, nor with the “Great Leap Forward” of China, that took its economy back by a whopping -25%. Atmanirbhar, therefore, can be looked at as a campaign to create robust world-class industries in India, that would make India competitive globally in a range of goods and services.
The campaign is based on the five pillars of economy, infrastructure, systems, demography and demand and is fuelled by packages that provide support to MSME’s, the poor including farmers, agriculture and new horizons of growth and finally, government reforms, to act as enablers.
What is holding back accelerated adoption of Atmanirbhar? Specifically, for the government market, we continue to see procurement frameworks skewed against local suppliers, despite the push by the Prime Minister’s Office. In almost every government department (Both Centre and the States), there are numerous cases where foreign suppliers are favoured over Indian suppliers. This bias is brought about by tweaking the procurement requirements/ tender documents by putting in criteria that is impossible for Indian players to meet such as the Indian player needs to be in business in the given industry for over 25 years. Or, the participating supplier must have provided the goods or services to at least two governments outside of India. Such pre-qualification criteria are abundant in government procurement documents and appear to favour foreign suppliers.
It is important to identify the steps needed to provide a level playing field to domestic players and to ensure that such superfluous criteria are not brought into government procurement. There are a lot of steps that can be taken through policy measures, once the problem is recognised. To begin with, there needs to be an appellate authority with requisite teeth, where tenders or procurement norms that are discriminatory to Indian players and which do not provide any apparent benefit to the government or the public, can be brought up for seeking redressal. This would make it easier for smaller players and startups to demand a level playing field through a set-out process. Such an appellate body can possibly be in the lines of the National Human Rights Commission, with adequate suo moto powers, to immediately rectify any violation of a level playing field for domestic players.
However, a Atmanirbhar Commission will not be sufficient to make India Atmanirbhar. More needs to be done and one can borrow from the policies adopted by the Defence Procurement Procedure 2016 (DPP 2016), which progressively follows the DPP 2013. DPP 2016 was updated to a more progressive DPP 2020, in order to aggressively promote increasing indigenous manufacturing and reducing timelines for the procurement of defence equipment. It is important to reduce the timelines for procurement, not just from the government perspective, but also from the perspective of domestic players, who have limited ability to pursue government deals that have a long sales cycle, going into multiple years, if not a decade. The long procurement cycle itself is a big deterrent to domestic players, as they do not have alternate markets to depend on, and are extremely dependent on being successful in the Indian market, before being accepted in any other market.
The key features of DPP 2016 that needs to be adopted to accelerate the Atmanirbhar campaign, is the concept of Make II. The ‘Make’ procedure for indigenous design, development and manufacture of defence equipment/ weapon systems, was simplified in 2016 and promulgated in DPP-2016. A new sub-category ‘Make-II (Industry Funded)’ was introduced under this procedure with primary focus upon development of equipment/system/platform or their upgrades or their subsystems/sub-assembly/assemblies/components with focus on import substitution. In this subcategory, no Government funding is envisaged for prototype development purposes but has assurance of orders on successful development and trials of the prototype. This is the key policy measure that needs to be adopted for government procurement of civilian goods and services. It reduces the risks of domestic players in developing cutting edge goods and services.
Under the defence Make II procedure, successful development would result in acquisition, from successful Development Agency/Agencies, through the ‘Buy Indian–IDDM (Indigenously Designed, Developed and Manufactured)’ category with a minimum of 40% domestic content, through open commercial bids. Cases where innovative solutions have been offered are to be accepted, even if there is only a single individual or firm involved. If we can have a similar program for civilian procurement, it would eliminate much of the “creative” procurement norms that infest government procurement, and tilts the process in favour of foreign suppliers.
At the end of the day, the other side of the coin of Atmanirbhar is access to domestic market. Domestic players cannot invest into products and services without access to domestic markets, especially the government market that makes up roughly 20% of all procurements in the economy. With handicaps such as higher cost of capital and infrastructure that throttles production and logistics, domestic players already have the pitch queered against them. Adopting Atmanirbhar policies that nudge the state governments to procure from domestic players and provide level playing fields to them, would surely accelerate the Atmanirbhar campaign. Such a policy must include an appellate authority for seeking redressal related to unfair procurement norms and a procurement policy that mimics the Make II policy of the DPP 2016.
New technologies are emerging on the horizon which will significantly disrupt existing industries. This provides a good opportunity for India to enter into these industries on the back of the new disrupting technologies to lay the foundation of India’s future economy. Will India continue to be a technology importer or will India be the leader of technology-based exports, as India was till the 18th century, will depend on whether we are able to take the appropriate steps now.
To gain dominance in the given technologies, India must have an institutional framework to doggedly pursue technology acquisition through all means possible. Such a framework is in addition to the Atmanirbhar campaign that India already has. Only then can India surge ahead in dominance of key technologies in a short period of time.
This article first appeared in India Foundation, https://indiafoundation.in/articles-and-commentaries/critical-technologies-for-a-usd-5-trillion-economy/
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