India’s new drone rules perfect example of agile approach to regulations: Amitabh Kant

Read: Aviation ministry passes Drone Rules, 2021 to ensure ease of using drones in India

India is a great product market with a 1.3 billion plus population and a large number of businesses; so, there is plenty of potential in both the B2C and B2B segments. India has close to 700 million internet users. With the cheapest data rates in the world, the large proliferation of smartphones and growing connectivity infrastructure, India has never been as connected as it is now – this presents a whole realm of possibility for tech companies, not only in terms of creating value for themselves, but to also positively impact the lives of people in both the rural and urban settings.

There seems to be a greater focus on creating a robust public digital infrastructure. The Government seems to pay a lot of attention to digital governance. Can you elaborate on this?

The government has made a lot of effort in terms of streamlining processes and regulations – starting with the creation of Start Up India and subsequent interventions to improve the Ease of Doing Business; this has been a continuous process. Addressing the bottlenecks and challenges has become an agile process. There is continuous focus on better supporting and facilitating the start-up ecosystem – even in the last defence budget speech there were special provisions/changes announced, aimed at making things easier for start-ups.

There has also been a lot of focus on creating a robust public digital infrastructure and on mainstreaming digital governance. A key factor that has greatly been enabling is the government’s Digital India program and the strategic shift to have the most remote parts of the country connected. This helps us to not only serve the traditional governance needs but also allow the private sector to tap into the government system and create new, innovative solutions.

Indian startups have received more funding fuel this year, even as global capital shifts away from China. China has even halted more than 40 IPOs even as they employ tighter scrutiny of their tech ecosystem. Your comments please on our tech race with China?

The line between corporations and government is often blurred in China, unlike in India. China and the international Big Tech players have seldom gotten along – with censorship often being in focus. “The Great Firewall” has prevented the likes of Google and Facebook from getting a foothold in China. As the domestic tech companies in China grow and have IPOs in the international market, there are newer sources of influence which may impact the traditional functioning of the companies and potentially affect governmental alignment/influence.

Take for example, the highly anticipated Ant IPO which was suspended last November in China. Third-party technology driven apps and micro lenders such as Alipay may be perceived as attempting to create financial services ecosystems which run parallel to the government’s official financial system. While Ant was focusing on the ordinary Chinese citizens, it was poised to be valued higher than the Big Four State-owned banks post the IPO.

This “parallel” system may have been perceived as a subversion of the existing lending system.

The Chinese tech ecosystem may increasingly be perceived as “closed”. This creates an opportunity for India. As an open ecosystem, it is going to be more attractive for foreign investors.

Where do you think the Indian tech industry will grow to, from this position? What ambitions can we realistically have? The mood is so positive.

As the IPOs demonstrate, there has been great momentum developed and driven by the confidence of investors as well creation of quality products which speak for themselves. The pandemic has accelerated the adoption and acceptance of technology across a wide range of sectors – allowing for more start-ups in the areas of AI, fintech, agritech, edtech, cyber security, Industry 4.0 etc to grow and innovate.

As per a Nasscom report titled ‘Future of technology services – Winning in this decade’, the Indian technology services market could reach $300-350 billion in revenue by 2025, growing at the rate of ~10% a year.

In 2012, we had 1 unicorn. In 2018, we had five new unicorns and in 2019 eight new unicorns. In 2020, there were 12 new unicorns. This year we are in the eighth month and we already created 24 new unicorns bringing the total no to 53. The number of new unicorns has been growing almost exponentially and there is still a lot more room for growth.

Also Read: New drone rules to help startups and SMEs, boost innovation: Nasscom

In the coming phase, the industry will also be well positioned to explore how some of these companies can become truly international.

However, many Indian startups are headquartered overseas for easier access to capital. For instance, Singapore. There seems to be a lack of incentives for local capital here in India. Antiquated forex regulations are probably playing a role. How do we tackle this issue?

The government has proactively approached reforms to make it easier for start-ups to flourish and grow. We are already seeing some of that paying off – there has been an exponential growth in the number of start-ups – we presently have around 50,000 of them. The pace of evolution and development of the technology landscape has been unprecedented and the regulatory process has traditionally been much slower. As new sectors emerge and industry requirements change, we end up having to contend with “legacy” regulations.

The government has been evolving a more consultative and inclusive approach to regulations – take for example the new Drone Rules 2021 which came out just a few days ago. It is a perfect example of the application of an agile approach to regulations. The regulations underwent multiple changes post deep industry consultations. In its present form, the regulations will help unlock the potential of the drone ecosystem – not only in terms of boosting local manufacturing but also in terms of the provision of drone related services. The present changes can greatly help in making India a global drone hub by 2030.

Specifically in the context of incentives for ‘local capital’, the matter would have to be examined in greater depth, to determine if it is just forex or prevalence of other factors which are impeding greater domestic capital availability.

Are you happy with the contributions made by NITI Aayog in driving technology and innovation in the country?

There are various ideas which have been conceived and subsequently mainstreamed through NITI Aayog. Digital India initiatives such as Aadhar/India Stack (erstwhile planning commission), Direct Benefit Transfer, BHIM/United Payments Interface, One Nation One Ration Card etc. NITI Aayog has also worked closely with line ministries and has contributed to the development on the National Digital Health Mission, Agri-stack, improving the ease of doing business etc.

NITI Aayog has also worked on frameworks and strategies for the adoption and promotion of frontier technologies through strategies and papers on AI, block chain, government data sharing, data empowerment and protection architecture. These pieces have been seminal in not only introducing ground breaking ideas and innovation, but have often been accompanied by demonstrative pilots designed to explore the feasibility of implementation on ground.

There is an entire mission at NITI Aayog, the Atal Innovation Missions, which has established tinkering labs across the country to help seed creativity and exposure to tech from an early age. The Mission is also undertaking establishment of Atal incubation centres and community labs/centres which are expected to catalyse the tech ecosystem at a grassroot level – through support in the form of mentorship, funding, compliance support etc.
In terms of Make in India, we have made a lot of progress and development in the technology space. Though, more work will have to be done to help create the best technology professionals and to facilitate greater R&D in key upcoming technologies such as AI/ML, cyber security, semiconductors, quantum computing etc.

What new initiatives can we expect from the government to make Ease of Doing Business in India, shall we say easier?

There is scope to streamline compliance processes and regulatory systems, identifying and addressing these needs and requirements can go a long way in not only stimulating local entrepreneurs, but can also attract global entrepreneurs to come and setup shop here. We have to incentivise investments not only from the international markets, but also investments from the domestic markets.

Access to capital is critical and the incentives need to be aligned for this to happen. Relevant rules and policies need to be examined in this context. Regulations need to be reviewed to ensure there is correct balance and necessary level of due diligence and compliance without adding any unnecessary red tape.

We also need to expand public digital IT systems (India Stack, Health Stack etc) and make systems inter-operable as well as provision for the use of communication with third party systems through APIs. The future of digital ecosystems would require both public and private systems to interact. The policies need to ensure the necessary engagement and interfacing continue.