Modi to woo investors in Silicon Valley to bring more innovation in India’s IT sector

The state of California, which is home to the world’s largest and most prosperous tech companies, has been the most sought after place to visit, for leaders across the globe. India’s Prime Minister Narendra Modi who is in the United States of America to attend the 70^th anniversary celebrations of the UN General Assembly, would also be spending a considerable amount of time at the west coast. He would be visiting tech giants like Apple, Google and Facebook and also attending an event where startup companies showcase their innovations.

Mr Modi met investors and businessmen in New York before he leaves for the west coast, where he will be interacting with a more diverse set of entrepreneurs in the tech sector. From big tech giants to startups, Mr Modi is expected to pitch the India story to woo investors and bring in more innovation in India’s IT sector. While Microsoft, Google and Facebook have their Indian operations headquartered in India’s leading cities, there are a sizeable number of Indians who work in these organisations in the US and also head these organisations. There are many Indians who have started their own tech startups and contribute to innovation in the tech sector in the US.

Boost to India’s IT sector

While India has its share of leading tech companies such as Infosys, Wipro, TCS, HCL, it is not particularly known for innovation. Modi’s visit to the tech hub is expected to convince many potential investors and the Indian diaspora that India is a good place for tech business and that his government is going all out to make it easier to do business in India.

Tech giants such as Google and Facebook are looking to expand their base in India. India is home to a population of 1.3 billion and the potential the Indian markets offer is a known fact but India’s skilled workforce and qualified people in tech gives it an edge over other Asian countries. India also has a favourable demographic dividend unlike its competitor China. Mr Modi’s visit to the west coast comes after Chinese President Xi Jinping’s visit to the region to woo tech companies to help revive China’s slowing economy. While Mr Jinping has promised to look into implementing economic reforms, there are other hurdles facing the tech companies in China, which they wouldn’t face in India.

How does India fare compared to China?

While China’s economy is much larger than India’s economy, India’s services sector especially the IT sector has dominated in Asia over China. India has plenty of qualified people in this field and a favourable demographic dividend while China has harsher regulations and lack of transparency in the tech sector. For example any foreign company wanting to invest in the tech sector in China cannot invest directly. It has to partner with a Chinese company and share its technology. This has led to intellectual property rights issues and a host of other complexities. Facebook and Google are also blocked in China.

India on the other hand gives the tech companies a much freer hand in running their operations despite having its own limitations. Microsoft and other leading tech giants do have their R&D facilities in India, while Google is all set to have its own campus in India, which already gives the tech sector a head start over China.

Initiatives to support startups by the Indian government would be another point of consideration for the tech companies to choose India and boost the overall IT sector.

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