Time For
India To Open Its Own IT Innovation Hubs
India has
long lamented its ‘Brain Drain’ from the Indian Institutes of Technology
(IITs), in particular. The Indian taxpayer has subsidised top class technical
higher education, right from the days we
could ill afford it, only to see the entire highly talented class of graduates
make a bee-line for the US. This is true
of our doctors and nurses prominent all over the world in addition to the US
and Europe as well.
There, at
the fabled El Dorado, our IT people have had challenging opportunities, excellent pay and
perquisites, and a high standard of living. This has gone on for decades. In
India the IT companies like Infosys and TCS among a host of others have also
blossomed alongside and contributed handsomely to India’s software exports.
Now all this
may have to change, at least for new aspirants for the H1B visa, because the
Trump administration has put a $100,000 fee on it The existing visa holders,( nearly 80 percent
of all H1B visas are held by Indians), can continue and renew them without
additional charges, beyond the nominal rates applied at present.
This
$100,000, if it remains unchanged, puts a virtual ban on new applicants. It is
an amount neither the individual nor his sponsoring company, either in India or
the US, can afford. However, if the intent is to force the hiring of American
citizens instead, the IT companies may have a difficult time of it, because
there are not many with the requisite skill sets.
Some
American and European companies have already opened and operate design hubs,
data mining, back-office and other types of centres in India. But before this
new hundred-fold increase in visa charges, most American companies ran their
Centres of Innovation in America, but largely using top grade Indian talent.
Because of
this dominant global structure imposed by the biggest buyers of the resultant
software, Indians ended up doing much of the basic IT work via what has been
derisively called technical coolie work. Indian companies have thus far avoided
competing with Innovation Centres of their own. These could have come up quite
easily in India, and will, no doubt do so now. They can also sprout in nearby
offshore locations, with liberal tax laws and excellent infrastructure, such as
the United Arab Emirates (UAE).
India now has a Free Trade Agreement (FTA) with the
UAE since 2022, which can greatly assist swift cooperation and collaboration
for such Innovation Centres.
Artificial
Intelligence development that is changing the entire IT landscape, as the next
step up from semiconductors/chip manufacturing and use, with its revolutionary
abilities and cost saving applications need vast amounts of electricity. So does the semiconductors and chip
development industry getting started in a big way in India, in addition to
large amounts of water, and of course, rare earth mineral products such as
‘magnets’. But AI, while essentially using semiconductors/chips can constantly
improve their capability and quality.
Rare Earth
mineral development and its products are also being fast-tracked in India from
mining onwards. But right now it relies on imports from current monopolist
China. Neither the semiconductor/chips nor AI can function without rare earth
products.
India is now
more than willing to take the comprehensive plunge and just as it has obtained
collaborators from Taiwan and South Korea for chips and semiconductor
manufacture, supported by huge government incentives under generous PLI
schemes, there is no reason why the same cant be done for the development of
Technical Innovation in IT.
India can
also offer long-term visas to Europeans, Americans, Taiwanese, Japanese,
Koreans and technical Chinese to set up
on their own. We couls also collaborate with the Chinese in China and
learn rare earth technology, chip magnet manufacturing and probably cyber
protection. They want Indian technical talent and are offering visas. India’s
major advantage is this large pool of technical personnel that could be
employed in the Indian Innovation Centres and elsewhere. Germany and China may
have been quick off the mark, but there will be many others such as Canada and
Britain wanting to employ Indians for their technical expertise and ease with
the English language.
With ongoing
economic reforms, a robust economy, and the growth of India as a manufacturing
and investment destination, the possibilities are indeed great.
Internally,
lowering of GST rates, income tax rates, hike in government pensions and
salaries, are collectively setting off a consumer boom to counter the US tariff
wars. We can see a flash growth already in automobile sales right at the
beginning of the festive season. Rate cuts in repo interest by thew RBI based on low
inflation and a reduced trade deficit is stimulating private sector investment.
This includes the MSME sector that employs large numbers. There is greater
consumer spending as intended. News reports indicate there is a likelihood of
allowing greater foreign investment in Indian banks in the near future.
In short,
things are accelerating in the Indian economy. Present threats to labour
intensive employment because of high US tariffs will probably resolve soon.
FTAs with the EU and indeed the US may both be
in place by the end of this calendar year 2025.
From 50% tariffs imposed by the US we may be down to about 10 to 15%
with an interim trade agreement in hand as well.
The
Innovation Centres that India may soon set up will contribute to the immense
demands of the domestic market let alone export. That will interest foreign
investors because few such opportunities exist now. AI could contribute substantially to spends
even as it improves efficiency and profits. India’s stress on aatmanirbhar Make in India is the leit
motif.
This is
being seized upon by a large number of foreign companies who regard it as their
way into the vast Indian market. In addition, there is the consumption of the
huge domestic defence industry. Companies off the starting block with MROs,
collaborations, technology transfers include Dassault and Airbus from Europe,
Embraer from Brazil, GE from the US ,
Rolls Royce from the UK, Russian defence companies. An FTA with the UK and another
with four countries in Europe including Switzerland already exist. There is a lot of collaboration in missile
and drone technology with Israel in addition to substantial imports as well.
Submarine
technology is coming into the collaborations with France and Germany. Other
aircraft companies such as Boeing, Airbus, Rafale (Dassault), and Lockheed
Martin are also sourcing parts and
components from India and its private sector independently.
AI can
greatly help the semiconductors and chip industry, the electronic space, the
automotive industry including electrical cars, alternative energy, fuel refining and distribution, lubricants,
nuclear energy. , infrastructure, including roads, tunnels, airports, dredging,
dams, canals, railways and civil aviation, UAVs, drones, chemicals,
fertilizers, ISRO and space, machines used in manufacture themselves. Then
there is food production, afforestation, conservation, animal welfare, indeed value addition of various sorts to
almost every endeavour. The sky is the limit in India and IT innovation Centres
can contribute massively to it all. If we get it right, we can do it all for
ourselves and export our cutting edge know-how too.
Commercial Ship-building is attracting big investments
from South Korea, Japan and others. Modern ports are developing at a fast pace
including container handling deep water ports. Off shore drilling for large oil
reserves off the Andaman Islands offer great prospects. The electronics sector
is not only attracting major American companies like Intel and Apple but also
Samsung of Korea. And all are committed
to Make in India.
The question
is not really about the potential. It is about how quickly India can move to
seize the day.
(1,271
words)
September
24th, 2025
For:
Firstpost/News18.com
Gautam
Mukherjee
