Davos 2024: PM Modi’s successful foreign policy will make India major semiconductor destination in 5 years, says Ashwini Vaishnaw

I have met with investors from practically every large fund, more than about 50 such very senior leaders in the financial services and investment world. They all understand today the policy framework that our Prime Minister has very clearly laid out and very smartly executed. People understand the impact of investment in infrastructure and how it is going to improve productivity and also noted the inclusive growth which our prime minister has always emphasised.

The net belief here among the investment community is that India is going to grow consistently, at 6 percent to 8 percent over the next many years, definitely for a decade.

Also read: Davos 2024: India's semiconductor policy is absolutely right, says Ashwini Vaishnaw

People have also noticed the steps taken to make sure that the bank balance sheets are healthy. Many of the mistakes that many other countries have made by putting too much debt on their balance sheets, those mistakes India has not made. This has also been noticed by very senior people.

Since you have been a part of India’s chip strategy, where does the country stand at a time when we are seeing geopolitics around the issue? For instance, US versus China? Secondly, could you give us your perspective on India's chip strategy, juxtaposing it with what other world economies are doing?

We had a couple of panels on semiconductors where industry leaders were present. The net message out of this entire series of conversations is the policy framework that our Prime Minister (Modi) has laid is absolutely the right policy framework. The execution so far has been highly appreciated.

On the first question: We have a very strong design capability. And that design capability has today matured from being a back-office to designing the entire product, designing the complete product, to further mature into conceptualising a customer's need and then converting that into a design. This strength, we must further strengthen. This strength, we must keep our focus on.

Watch the full interview

It’s also no longer a question of design or manufacturing. It's a question of design and manufacturing. This is the message we got from all the senior leaders who expressed their satisfaction.

As part of the government's $10 billion chip subsidy plan, so far 13 percent to 14 percent of that has been approved for Micron. Can we expect more chip subsidy approvals before the Model Code of Conduct kicks in? 

Our prime minister has very clearly said that the semiconductor industry is a 20-year journey. So, it's a long haul; we must keep working step-by-step. His focus has always been on developing the entire ecosystem.

Also read: Davos 2024: India's debt management wins praise from investors, says Ashwini Vaishnaw

In today’s discussions, people have lauded our policy, and one of the people commented that we could never imagine the meticulous execution that has happened. So, we need to keep working on this path. We need to keep working on our success. So, the journey which many other countries took, and they followed it up for 30 years, I feel confident that we will be able to compress those 30 years in 10 years.

The mobile electronics industry is asking for a change in the import control regime for components. They are saying this will help increase production and exports. What is the government's stance on this issue? 

Yes, they have met us, shared their demands, and also shared their logic behind this. And I think this is part of the consultation process that goes before a budget. Let that consultation process be completed. And that's something that the finance ministry -- we have also shared our views. Let that come out in the budget.

Could you also give us an update on the government's plans to procure GPUs for AI startups?

We are creating an AI mission in which the government will be investing in developing the compute power, making sure that that compute power is available, accessible to start-ups, to MSMEs. We will be working in a very methodical way. The way the payment system has evolved, a similar structure we’ll try to create for AI.

Taking DPIs to the world has also been something that the government has been talking about. NPCI is already trying to do that with UPI. So, did that also come up in your discussions on what other countries can learn from the India example in building digital public rails?  

During the last G7 meeting in Japan, we signed a memorandum of understanding between Japan and India for implementing the digital stack, especially the payment system in Japan. So yesterday, Japan's digital transformation minister met, and he shared the progress that has been made so far.

Two of the largest banks in the world have decided to go forward on that. And the Japanese monetary authority as well as many European countries are looking at this structure as the solution for their countries and also for cross-border payments.

Recently, Sachin Tendulkar shared his experience of being a victim of deepfakes. So, with elections approaching, can we expect new regulations from the government to ensure that this doesn't become a big issue going forward? 

See, elections are just around the corner. So, at this point in time, we are working with the existing regulatory framework. During the conversations with senior leaders from across the world, practically everybody shared this concern about deepfakes and false/disinformation. So, I think going forward, we'll have to look at some very stronger regulations.

Also read: Davos 2024: Going forward India will have stronger regulations on deepfakes, says Ashwini Vaishnaw

We really need to now move to a framework in which the social media platforms start taking responsibility for what they are publishing. The context of social media has changed. When Safe Harbour was enacted way back in the 1990s, the internet was evolving. However, today, the internet and its manifestation in the form of social media platforms are very widespread. So, the time has come when the entire global community takes a real look at the entire construct that has been in existence for a few years.

Since you mentioned elections, you delivered a big windfall for the BJP as the MP in charge. Can we expect you to play a more active role as the Lok Sabha election approaches? Can we even expect you to perhaps contest this time? 

I'm a disciplined worker of the party and whatever the party asks me to do, (I will) do. It’s an honour that the party is always giving responsibilities, and Madhya Pradesh, Rajasthan, and Chhattisgarh wins were a big vote of confidence in the Prime Minister's vision, the plans that he has made, and the transformative change he has brought into people's lives.

Final question. Based on the interest that you're seeing, how big can India’s semiconductor industry eventually be in terms of size, scale, and investments? What can our ambition be?  

In the coming five years, India will become a major semiconductor destination, for sure. The way the world is developing trust in India, that trust is majorly because of the way our foreign policy has been conducted by our Prime Minister.

Also read: Davos 2024: Japanese Monetary Authority to adopt India's digital payment models says Ashwini Vaishnaw

The way he has developed that trust by meeting people, honouring commitments, and intervening in exactly the right way — all these things today, when you meet the global leaders, they tell that we really trust Prime Minister Modi's leadership. Many of them actually said that we are very happy that he will be coming back. So that is the kind of trust that people have very clearly endorsed. And that trust will translate into India becoming a major semiconductor destination.