Having worked on new tech product development for India (and other emerging markets) for 5 years, two observations have always jumped out:
- India is digitizing at breakneck speed
- Indian tech products are hardly found outside of India
This decade, the former should continue uninterrupted, but the latter is set to change: technology innovation in India is accelerating, and by the end of the decade I believe Indian tech products will become household names in the Western world. Here’s why.
1. A wave of digitization
The few years past have dramatically changed the landscape in India itself: carrier Reliance Jio got 100Ms of people low cost internet phones with abundant 4G for about $1.50 per month. Today, 700M (!) Indians have smartphones, with mobile data more accessible than almost anywhere else in the world.
Amazon competitor Flipkart rapidly established e-commerce, and India now has 100Ms online shoppers. Digital payments are surging, with India’s government-initiated digital payment system, UPI, seeing payment volume over 1/3rd of GDP (!).
UPI and its digital identity peer, Aadhaar, are part of various successful government efforts to boost India’s digitization and technology innovation. Other elements are the Make in India program (aiming to catalyze technology manufacturing) and a protective stance towards Chinese technology, such as the ban of Chinese apps on app stores, creating space for Indian innovators.
2. A young tech-educated base
India’s demographics skew much younger than those of other large nations, a productivity advantage with the majority of the population at working age.
Country / region Median age
------------------ ------------
Europe 42
United States 38
China 37
Brazil 31
Indonesia 28
Mexico 28
India 27
Nigeria 18
And India’s top universities are almost all technical, most importantly part of its Indian Institute of Technology universities:
Top 10 ranked universities (QS India University Rankings)
- Indian Institute of Technology Bombay
- Indian Institute of Science
- Indian Institute of Technology Delhi
- Indian Institute of Technology Madras
- Indian Institute of Technology Kharagpur
- Indian Institute of Technology Kanpur
- University of Delhi
- University of Hyderabad
- Indian Institute of Technology Roorkee
- Indian Institute of Technology Guwahati
Competition for entry in these schools is extreme, with admission rates below 2% (lower than top schools in the US). This has built a dense pool of competitive technical talent in India.
Historically, a lot of Indian tech talent left the country to pursue careers in the US and elsewhere. The result is that many of the tech industry’s global leaders are Indian, such as Google’s and Microsoft’s CEOs and much of their senior leadership, as well as many successful technology investors. As opportunities in India are rising, a much larger share of this talent will choose to stay in India this decade.
3. An investment surge
Foreign investment is rapidly flowing into India: Reliance Jio recently received billions of dollars in investment from all of Facebook, Google, Qualcomm and Intel, while Amazon and Walmart entered India’s e-Commerce space with deep local investment. Sequoia Capital, a large US venture capital firm, now has 3 of its 10 global offices in India, and Softbank, the (in)famous deep-pocketed Japanese investment fund, has bet $11B+ on Indian startups in recent years.
Because of this, India now has over 50 unicorns (private companies valued at $1B+ in a funding round). Not yet in the range of the US (200+) or China (100+), but already well beyond the UK and Germany. Valid questions of startup overvaluation aside, there’s nearly unlimited cash in India available for people to build & grow tech companies.
The caveats
There are factors holding India back: corruption is still high and ease of doing business low (complex approval processes, regulations, etc.) compared to the markets it has to compete with, creating some drag on innovation.
Country Ease of business rank
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United States 6
Germany 22
China 31
Mexico 60
India 63
Indonesia 73
Brazil 124
Nigeria 131
In addition, of all India’s manufacturing industries, its semiconductor manufacturing is still underdeveloped (vs. e.g. vehicle and pharmaceutical manufacturing which are much further ahead). This makes the case for fast-paced, global software innovation clearer, while hardware innovation may stay behind — it is to be seen if a stronger manufacturing base develops.
The sum
All in all, my bet is that India is about to enter a new era of global technology innovation, and by the end of the decade we’ll be accustomed to using products from India across the world. As someone keen to see India develop, it’s an exciting time ahead.