DALL·E 2024-05-14 10.51.07 - A minimal square illustration representing India's strategic focus on critical technologies. Show icons of semiconductors, AI, drones, and biotechnolo

India’s Strategic Focus on Leading Technologies: Boosting Small Businesses and Building an Allied Ecosystem

International cooperation and competition over critical technologies have assumed greater prominence in recent years, driven by emerging geopolitical frictions and rapid technological innovation. In this context, India, the world’s most populous nation and fifth-largest economy, has adopted a strategic approach to critical and emerging technologies. With objectives of ensuring economic and national security, spurring economic growth and employment, and increasing its global competitiveness, India has taken several crucial steps.

Public investments and subsidies for manufacturing have increased, research and development (R&D) and education ecosystems are being improved, and new liberalized policies and regulations have been outlined. Additionally, technology agreements and standards are now a priority in India’s diplomacy. This strategic focus on critical and emerging technologies aims to position India as a global leader in high-tech industries while fostering a supportive ecosystem for innovation and economic resilience.

The Ripple Effect of High-Tech Manufacturing

India’s focus on high-end, technology-intensive manufacturing can produce a cascading effect across various sectors of the economy. High-tech industries such as semiconductors, biotech, nanotech, and AI-enabled manufacturing create demand for a wide range of support industries. For instance, when India scales up its semiconductor industry, it not only employs electronics experts but also generates numerous jobs in transportation, warehousing, parts manufacturing, and sales management. The development of these industries can thus stimulate a broader entrepreneurial ecosystem, creating opportunities for small businesses to thrive.

Moreover, India’s technology priorities include traditional strategic technologies (defense, nuclear, space), critical digital technologies (semiconductors, electronics, telecommunications), and emerging technologies (AI, quantum computing, drones). The lower cost and higher power of computing, alongside better telecommunications networks, enable transformations in digital security, cloud computing, AI, and automation, setting the stage for another generation of economic growth and new military applications.

Policy Support and Infrastructure Development

The Indian government has introduced several policies and initiatives to support this technological advancement. Key initiatives include the Production Linked Incentive (PLI) scheme, which has directed approximately $26 billion towards manufacturing critical components such as electronics, green technologies, biopharmaceuticals, and telecommunications. Specific national policies, such as the India Semiconductor Mission, the National Green Hydrogen Mission, and the National AI Mission, offer additional financial incentives and support for high-tech industries.

To complement these financial incentives, the government has also taken steps to create regulatory certainty and clarity with respect to manufacturing, digital policies, drones, and space. These steps include regularly updating and streamlining the Defence Acquisition Procedure, establishing the Indian Space Policy 2023, Drone Rules 2021, and the National Geospatial Policy 2022. Dedicated nodal agencies like the Indian Semiconductor Mission and National Quantum Mission have been established to create policy frameworks, initiate private sector projects, and support skill development.

The Long-Term Vision: Higher Per Capita Income by 2047

India’s renewed focus on critical and emerging technologies has come about due to two main factors: the centrality of recent technological breakthroughs and shifting geopolitical realities. The military threat from China and the Covid-19 pandemic highlighted India’s exposure to global supply chain disruptions, creating an impetus for indigenous manufacturing of critical electronics, defense supplies, and healthcare equipment. As firms seek alternatives to China for developing and manufacturing strategic technologies, India has a significant opportunity to become a leading player in these fields.

By continuing to push for high-tech manufacturing and creating a supportive ecosystem through policy measures, infrastructure development, and financial incentives, India is on the right path to achieve higher per capita income by 2047. This strategic focus not only aims to elevate India’s global competitiveness but also ensures that the benefits of technological advancement trickle down to create a robust, inclusive economic growth model.

Leave A Comment

Your email address will not be published. Required fields are marked *