June 2019
The Bay Area-Silicon Valley
and India
Convergence and Alignment
in the Innovation Age
Since 1990, the Bay Area Council Economic Institute
has been the leading think tank focused on the
economic and policy issues facing the San Francisco
BayArea-Silicon Valley, one of the most dynamic regions
in the United States and the world’s leading center
for technology and innovation. A valued forum for
stakeholder engagement and a respected source of
information and fact-based analysis, the Institute is a
trusted partner and adviser to both business leaders
and government officials. Through its economic and
policy research and its many partnerships, the Institute
addresses major factors impacting the competitiveness,
economic development and quality of life of the region
About the bAy AreA CounCil eConomiC institute
and the state, including infrastructure, globalization,
science and technology, and health policy. It is guided
by a Board of Advisors drawn from influential leaders in
the corporate, academic, non-profit, and government
sectors. The Institute is housed at and supported by
the Bay Area Council, a public policy organization that
includes hundreds of the region’s largest employers
and is committed to keeping the BayArea the
world’s most competitive economy and best place
to live. The Institute also supports and manages the
Bay Area Science and Innovation Consortium (BASIC),
a partnership of Northern California’s leading scientific
research laboratories and thinkers.
Project Lead Sponsors
Project Supporting Sponsors
Contents
Executive Summary ...................................................4
Introduction ...............................................................7
Chapter 1
India’s Economy: Poised for Takeoff .........................9
Demographics and Disruption in the Labor Market .. 10
Tax & Currency: Out with the Old ........................... 13
A Rising Tide Lifts Some Boats ................................ 13
Turning a Corner ...................................................... 14
Chapter 2
Trade and Investment: Flow Management .............. 15
US-India Trade ......................................................... 17
A Regional Snapshot ................................................ 19
Trade Issues ............................................................. 21
Foreign Direct Investment:
Early Days, Strong Growth ....................................... 23
Chapter 3
The Bay Area Indian Community:
A Cross-Border Success Story .................................29
A New Wave of Immigrants ..................................... 30
The Community Today ............................................ 30
University Ties .......................................................... 33
Business Networks ................................................... 36
Chapter 4
Indian States: Laboratories of Innovation ...............39
City Competitiveness............................................... 42
Chapter 5
Innovation, Startups and Investment:
Poised for Breakthrough .........................................45
Venture Investment .................................................. 46
Bay Area Connections ............................................. 48
Chapter 6
Information Technology: Upward Mobility .............51
Government Initiatives ............................................. 54
Trends ...................................................................... 55
The Bay Area-IT Connection Shifts ......................... 55
Chapter 7
Healthcare/Life Sciences: Care in the Cloud ...........69
Pharmaceuticals ....................................................... 70
Trends ...................................................................... 71
Government Initiatives ............................................. 72
The Bay Area and India ............................................ 72
Slow Progress in Life Sciences Investment .............. 73
Chapter 8
Energy/Environment: Cleaner is Better ..................75
A Growing Need for Renewables ............................ 75
Where Energy and the Environment Intersect ........ 77
Pervasive Pollution ................................................... 79
Trash for Cash .......................................................... 80
Bay Area Laboratories and
Companies Address the Market .............................. 80
Chapter 9
Smart Cities: Order from Chaos ..............................85
India’s Plan ............................................................... 85
The Bay Area and India ............................................ 87
Chapter 10
Fintech: Data Puts Money to Work .........................89
The Bay Area and India ............................................ 92
Notes .......................................................................95
Acknowledgments
This report was developed and written by Sean Randolph,
Senior Director at the Bay Area Council Economic
Institute, and Niels Erich, a consultant to the Institute.
The Institute is deeply grateful to the co-chairs of
this project, Dr. Nandini Tandon of Tenacity, and
William Ruh, CEO of Lendlease Digital, who provided
extraordinary leadership and guidance to the project.
It also wishes to thank Priya Tandon, special advisor
for India to the Bay Area Council, who provided active
support and liaison in India.
This report would not have been possible without the
generous support of its sponsors Infosys, GE Digital,
J. Sagar Law, Tech Mahindra, Salesforce, Greenberg
Traurig LLP, and WestBridge Capital.
We also wish to thank the many people who
contributed to the research process with their time,
information, and insights:
Mukesh Aghi, President & CEO, US-India Strategic
Partnership Forum
Brett Allor, Senior Director, Market Strategy and
Research, SF Travel
Arogyaswami Paulraj, Professor Emeritus,
Stanford University
Harshul Asnani, Senior Vice President, Tech Mahindra
Ridhika Batra, Director USA, Federation of Indian
Chambers of Commerce and Industry (FICCI)
Daljit K. Bains, Principal, dkb
Sumir Chadha, Co-founder & Managing Director,
WestBridge Capital
John Chambers, CEO, JC2 Ventures
Chris Cooper, COO, Sequoia Capital
Hubertus Funke, EVP & Chief Tourism Officer, SF Travel
SK Gupta, Managing Director and Co-Founder,
Ascend-Pinnacle
Sheryl Hingorani, Systems Analysis and Engineering,
Sandia National Laboratories
Anjali Jaiswal, Senior Director International Program–
India, National Resources Defense Council (NRDC)
Dr. Anula Jayasuriya, Founder & Managing Director,
EXXclaim Capital
Mohanjit Jolly, Partner, Iron Pillar Fund
Bakul Joshi, President, Multiple Access CA. Corporation
Sanjeev Joshipura, Executive Director, Indiaspora
Dr. Amit Kapoor, Chair, Institute for Competitiveness
Rajat Kathuria, Director & CE, Indian Council for
Research on International Economic Relations
Ajay Kela, President & CEO, Wadhwani Foundation
Aslesha Khandeparkar, Country Head and Senior
Director–India, Oracle
Shweta Kohli, Director, Public Policy & Government
Affairs–India and South Asia, Salesforce
Luke Kowalski, Corporate UI Architect, Oracle
Dr. Ashutosh Lal, Director–Thalassemia, UCSF Benioff
Children’s Hospitals–Oakland
Dr. Bertram Lubin, Executive Adviser for Children’s
Health, UCSF Benioff Children’s Hospitals–Oakland
Gautam Lunawat, Partner, McKinsey & Company
Rupinder Malik, Partner, J. Sagar Associates
Dr. Arun Majumdar, Co-Director, Precourt Institute for
Energy, Stanford University
Anita Manwani, Board of Directors, Ashoka University
Carolyn McNiven, Partner, Greenberg Traurig LLP
Prasant Mohapatra, Vice Chancellor for Research, UC Davis
Mahesh Narayanan, India Country Manager, LinkedIn
Robert Nelson, Partner, Gibson, Dunn & Crutcher LLP
Adithya M.R. Padala, President & CEO, UmeVoice
Krish Panu, Managing Director, PointGuard Ventures
Pablo Quintanilla, Director, Public Policy Asia-Pacific and
Latin America, Salesforce
Nisha Rajan, Senior Policy Coordinator, US-India
Strategic Partnership Forum
MR Rangaswami, Co-founder and Managing Director,
Sand Hill Group
Rekha Sethi, Director General, All India
Management Association
Dr. Kartikeya Singh, Deputy Director & Fellow,
Wadhwani Chair in U.S.-India Policy Studies, Center
for Strategic & International Studies
Reshma Singh, Energy Technology, Lawrence Berkeley
National Laboratory
Jeremy Sturchio, Vice President and Head of
Government Relations Asia-Pacific, Visa
Andy Tsao, Managing Director, SVB Global Gateway
Thea Uppal, West Coast Manager, US-India
Business Council
Anurag Varma, Vice President, Infosys Ltd.
Vishal Wanchoo, CEO, GE South Asia
“
The San Francisco Bay Area is a vital
economic hub in U.S.- India trade and
continues to grow in both the diversity
of industries it encompasses and the
depth of opportunity it represents. India
cannot ignore the deep relevance this
area holds for it’s own economic growth
and we are pleased to see the Bay Area
Council step out with the India Report to
support continued partnership between
India and one of our nation’s most notable
economic powerhouses.
”
Nisha Biswal, President,
U.S.-India Business Council
and SVP, U.S. Chamber of Commerce
“
India will join China and the US in the top
tier of global economies, and that must
necessarily include building a top tier
Indian high technology industry. India
has to attract the right investments and
partnerships in this quest and I am sure
the US, and the Silicon Valley in particular,
will see this as a great opportunity.
”
Dr. Arogyaswami J. Paulraj,
Professor (Emeritus), Stanford University
“
The incorporation of these devices
will make India a leader in the space.
The opportunity for India and USA to
collaborate leveraging IOT is significant
in addressing many challenges. This is a
very exciting time for both democracies,
with huge potential, to partner, both for
innovation and implementation, leading
to positive impact in diverse sectors.
”
William Ruh, Co-Chair,
Bay Area-Silicon Valley India Focus,
Bay Area Council
and CEO, LendLease Digital
“
The Bay Area/Silicon Valley and India are
natural partners for innovation-based
economic growth. We are committed to
supporting and leveraging these ties for a
win-win for both the US and India.
”
Dr. Nandini Tandon, Co-Chair,
Bay Area-Silicon Valley India Focus,
Bay Area Council
and Co-Founder & CEO,
Tenacity Global Group Inc.
“
Economic growth is best served with the
inclusion of women in leadership and the
priority being given to it in the Bay Area-
India focus of the Bay Area Council is
very promising.
”
Priya Tandon, Special Advisor,
Bay Area Council
and Co-Founder & India CEO,
Tenacity Global Group Inc.
“
We are making great strides against
cancer but the road is a long one. And
now we have a new tool—Artificial
Intelligence that will help us move
faster. AI will be a great enabler in
transforming healthcare, specially
cancer. This transformation will be
further accelerated by USA and
India partnering and pooling their
complementary strengths, benefitting
their own citizens and collectively
impacting the global health at large.
”
Robert Ingram, Founding Chair,
CEO Roundtable on Cancer
2
MESSAGE FROM THE AMBASSADOR OF INDIA TO THE UNITED STATES
I extend my compliments to the India Focus of the Economic Institute of the
Bay Area Council (BACEI) for bringing out this timely report on building stronger
economic ties between the Silicon Valley and India titled, “Bay Area-Silicon Valley
and India: Convergence and Alignment in the Innovation Age”.
The recent outcome of the largest democratic vote on the planet – the General
Elections in India, with a clear and renewed mandate for the Government of Prime
Minister Narendra Modi provides a unique opportunity for further strengthening
the robust and comprehensive India-US strategic partnership. Prime Minister Modi
had said during his visit to Washington DC in June 2017, “We consider the USA as
our primary partner for India’s social and economic transformation in all our flagship
programs and schemes.”
The stewardship of Governor Gavin Newsom of the “Golden State” of California,
a leader in the United States in industries such as agriculture, pharmaceutical, finance,
information technology, aerospace, film and entertainment and tourism, can help
realize the untapped potential of bilateral cooperation. A decade ago, Governor
Newsom was the first-ever sitting Mayor of San Francisco to visit India. His focus on
building California’s external trade ties was evident in the fact that soon after taking
office earlier this year, he designated Lt. Governor of California Eleni Kounalakis as his
top representative to advance California’s economic interests abroad.
The potential for economic ties between the United States and India, the
world’s oldest and largest democracies is immense. India is today the world’s third
largest economy (PPP terms). It is poised to become a Five Trillion Dollar Economy
in the next five years and aspires to become a Ten Trillion Dollar Economy in the
next 8 years thereafter. The last five years also witnessed a wave of next generation
structural reforms, which have set the stage for decades of high growth. This includes
the path breaking Goods and Services Tax (GST) and other taxation reforms. The
country has leapfrogged to the 77th rank in the World Bank’s Ease of Doing Business
Rankings. With a young population and an expanding middle class, the Indian market
presents great opportunities for business.
3
It is therefore natural that bilateral trade and investments have shown a robust
growth. Bilateral trade reached $142 billion in 2018 growing by more than 13% from
$126 Billion in 2017. Trade deficit came down to $24.2 Billion, a decrease of 11.3%
in one year. India has been the top recipient of FDI in the world in the past few years
and has received over $239 Billion of FDI in the last five years. Over 400 of the top
Fortune 500 companies have their R&D facilities in India.
California is known world-wide for its innovative and important technology
firms such as Apple, Facebook, Oracle and Google. Many of these firms have
research centers in India and find a huge market and userbase there as well. India’s
skilled engineers power these Silicon Valley giants and also contribute to the Start-up
ecosystem of the Valley.
The Bay Area Council’s timely report on economic ties between Silicon
Valley and India traces the 100-year arc of their engagement propelled by Indian
immigrants on the US West Coast. It accurately captures India’s recent achievements
in the Ease of Doing Business, Competitiveness and Global Innovation indices and
rightly lays emphasis on India’s digital expansion in the fields of health, infrastructure,
agriculture, energy, payments, data analytics, IoT and e-commerce. Silicon Valley
technology companies have been among the first to realize the business potential
of India’s digital economy surging on the back of more than 500 million smartphone
users today and already higher per capita rates of data transmission than the US and
China. Among other things, the report chronicles the maturing of venture capital
funding between the Silicon Valley and India, spotlights new tie-ups in the digital
space for Indian IT-services companies, and presages growing partnerships in the AI,
blockchain, IoT and ‘moonshot’ spaces.
The report is a welcome and positive read on the India-US economic
relationship, in general. We laud the team at the Bay Area Council - President & CEO
Jim Wunderman, Co-chairs of BACEI’s India Focus Dr. Nandini Tandon and William
Ruh, Senior Director Sean Randolph and Special Advisor to BAC Priya Tandon - for
shining a light on the potential of India-Silicon Valley economic ties.
4
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
Executive Summary
India’s economy has rapidly advanced and is now
the world’s sixth largest. GDP growth averaged 6.3%
from 1980–2016, and was 6.7% in 2017, with 7.3%
estimated for 2018 and 7.5% forecast for 2019. In
contrast to China, whose population is aging rapidly,
India is young: people aged 15–34 account for slightly
over a third of its population and most of its eligible
workforce. India’s economic structure is also changing,
as agriculture’s share has steadily declined to only
about 15% of output, and services now dominate (at
more than 50%). India’s middle class is growing, and
urbanization is accelerating.
This transformation is a work in progress. Agriculture still
employs almost 43% of the workforce. India’s vaunted
IT industry, though fast growing, employs relatively few
workers compared to traditional occupations, and while
official unemployment rates are low, many jobs are
temporary or part-time. India also continues to struggle
with a legacy of underperforming education, persistent
poverty, and government inefficiency. To address these
challenges and push India toward a position of global
leadership, the government of Prime Minister Narendra
Modi, which took office in 2014, has embarked on a
series of bold reforms to streamline government and
digitize the economy. That vision looks to a cashless
economy, digital government services, telemedicine
reaching into rural areas, more use of renewable energy,
and connectivity for rural as well as urban citizens
through 5G wireless networks.
For a country of India’s size, international trade is
relatively small, accounting for only 28.67% of GDP and
2.1% of world trade. Service exports are led by India’s
robust IT sector, which occupies a position of global
dominance. The United States is India’s largest global
customer for the IT, ITeS (IT-enabled services), and BPM
(business process management) sector, absorbing 62%
of global sales in each year since 2014. Due primarily to
its IT service exports, India enjoys a goods and services
trade surplus with the US, a source of conflict with the
Trump administration. On the investment front, the US
accounts for only 6% of India’s cumulative equity FDI
inflow, with US FDI to India having slowed in recent
years. Clearly, there is considerable room for growth in
two-way trade and investment. Silicon Valley is already
a major player, with $21 billion in cumulative investment
from 2003–2018, accounting for 79% of all investment
from California.
As this suggests, the Bay Area is a major economic
partner for India. This has a social and demographic
base, as California is home to 20% of Indian immigrants
to the US, with 506,971 residents of Indian descent. More
than 293,000 live in the Bay Area, primarily in Santa Clara
and Alameda counties. Compared to immigrants overall,
Indians tend to be professional and educated: nearly
three-quarters are employed in management, business,
science, and arts occupations; median income ($107,000
in 2015) is much higher than for the native-born or other
immigrant populations; and 77 percent hold a bachelor’s
degree or above. These numbers reflect the high
proportion of Indian immigrants who come to the US as
university students or as H-1B workers in jobs requiring
a university degree; 20,000 Indian students attend
California colleges and universities, with UC Berkeley the
largest host institution in Northern California. A vibrant
community of business and cultural organizations also
anchors India’s connection to the region.
When considering opportunities in India, it is important
to understand that like the United States, India has a
large number (29) of highly diverse states that enjoy
considerable political autonomy and offer distinct
business environments. The largest states have the scale
of countries, with populations ranging from 60 million
(Gujarat) to almost 200 million (Uttar Pradesh). States can
serve as laboratories for innovation. Business strategies
therefore need to take into account not only national
government policies, but state environments as well.
Much still needs to be done before India can be
considered a world leader in innovation, but its status
is rising. A young, entrepreneurial population and a
5
Executive Summary
fast-growing domestic market make India a promising
site for venture investment. US venture firms, primarily
from Silicon Valley, are the biggest players. After a
flood of investment in the early 2000s, some firms left,
frustrated by slow returns on investment, but a growing
number of unicorns and recent high-profile exits are
changing the environment. As a result, both established
venture firms and newer market entrants are raising their
profiles through operations that give their Indian arms
more autonomy and decision-making authority. Most
innovation is taking place around goods and services
targeting India’s growing domestic market.
India is identified abroad with information technology
and with its leading IT services companies. IT,
IT-enabled services, and business process management
constitute a $167 billion sector that accounts for $126
billion in exports. As global IT demand is moving
beyond traditional network management, systems
integration, and software services toward new fields
such as mobile technology and digital services, Indian
firms are adjusting. Future export growth will come
primarily from digital services—cloud computing, big
data analytics, IoT, blockchain, automation, artificial
intelligence, and e-commerce. Silicon Valley plays a
part. Through their presence in the Valley, Indian IT firms
are investing, increasing R&D, and engaging startups
and other partners that will shape the future of the
industry. Some are developing service centers in the US
to recruit and train employees locally—in response to
customer needs, but also to increased pressure on the
H-1B visa system.
The Modi government’s Digital India initiative has
intensified the focus on digital capability within India.
Cloud services and e-commerce in particular are
poised for takeoff: the public cloud services market in
India is expected to grow by more than 35% to $1.3
billion in 2020; business to business (B2B) e-commerce
is expected to reach $700 billion; and business to
consumer (B2C) e-commerce is forecast to reach $102
billion. It is estimated that by 2023, India will have a
connected market of up to 700 million smartphones
and about 800 million internet users. Recognizing those
technology opportunities, Bay Area companies such as
Google, Facebook, Oracle, Cisco, Salesforce, VMware,
and Zendesk are increasing their investment.
Other sectors also show promise for partnerships. The
Modi government plans to double healthcare spending to
raise the quality of care, maintain affordability, and extend
preventive medical and wellness services to underserved
rural areas. Bay Area venture firms are investing in
specialty clinics, healthcare IT, diagnostics, pharmaceutical
manufacturing, and low-cost medical devices.
Energy and the environment are also priorities. Fossil
fuels power most of India’s 350 gigawatts of installed
electricity generation capacity; of that, 56–75% is coal-
fired generation. India has pledged under the 2015
Paris Climate Change Accord to cut greenhouse gas
emissions by 33–35% from 2005 levels by 2030 and
to achieve 40% cumulative electric power installed
capacity from non-fossil-fuel-based energy resources
over the same period. Those intentions build on the
government’s goal of increasing installed capacity of
renewables to 175 GW by 2022, more than doubling
the 75 GW capacity existing in early 2019. On the
environmental side, 15 of the world’s top 30 worst cities
for air pollution are in India, and 63% of sewage flowing
into rivers daily is untreated in urban areas.
Government agencies and states are looking to
California for solutions in renewable energy, energy
conservation and storage, and environmental mitigation.
Companies such as GE, whose digital activity is based
in the Bay Area, are developing technologies in India
focused on grid transmission and distribution software.
Bay Area venture firms are investing in decentralized
off-grid solar power, low-cost solar systems for homes
and small businesses, and solar-powered microgrids.
Lawrence Berkeley National Laboratory’s International
Energy Studies (IES) Group has worked with India’s
government and businesses for more than two decades,
providing technical and policy analysis on power
generation, energy efficiency, and sustainable cities. It
also leads the US-India Joint Center for Building Energy
Research and Development (CBERD), in which a range
of Bay Area businesses, universities, and non-profit
organizations participate.
6
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
Infrastructure, urbanization, and smart cities are related
fields where India’s needs and markets align with Bay
Area capabilities. India’s cities lag their global peers
in smart city technology. In response, the government
launched a Smart Cities Mission in 2015, targeting 100
cities for infrastructure and services upgrades, backed
by partial funding. Early projects focus on CCTV security
systems, smart streetlights, emergency warning and
response networks, free Wi-Fi along transit corridors
(which increased ridership), and “smart classroom”
upgrades to secondary and primary schools. Cities also
need better multi-agency planning and coordination,
data-driven decision making, and simplified processes
for permitting and land acquisition. Silicon Valley
companies are teaming with Indian IT and engineering
firms and startups to build out integrated command
and control centers that are critical to managing data
flows and coordinating functions, including integrated
data storage and security. Reflecting the range of needs
and opportunities, Cisco runs a Cisco Smart City center
in Bangalore (also known as Bengaluru) to showcase
how IoT technology and infrastructure can deliver
government services on demand via mobile devices;
enable smart streets and buildings, smart parking, and
smart meeting and work spaces; and connect users to
education, healthcare, and transportation.
India is also a large untapped market for financial
services. The Modi government sees mobile technology,
fintech, and a cashless society as keys to financial
empowerment and business growth, providing access for
ordinary Indians to credit, insurance, digital payments,
and e-commerce. Fintech acceptance and adoption have
grown rapidly, with the traditionally cash-driven Indian
economy responding well to the fintech opportunity
primarily triggered by the related surges in e-commerce
and smartphone penetration. The shift to digital
payments promises to revolutionize India’s economy,
and in the process, transform the financial sector. Credit
Suisse forecasts that digital payments will become a $1
trillion market in India by 2023. Bay Area companies like
Visa, PayPal, WhatsApp, and Google have made inroads
in financial services markets but face competition from
local service providers, as well as regulatory challenges.
As with any relationship between major countries, there
are complex issues. Imposition of 25% and 10% steel
and aluminum tariffs by the US in 2018 led India to
impose retaliatory tariffs in 2019. The US withdrawal of
Generalized System of Preferences (GSP) benefits has
also exacerbated the trade relationship. On the Indian
side, government proposals to require data generated in
India to be exclusively stored in India, and proposed data
privacy regulations that are among the most stringent
in the world, have drawn strong opposition from both
Indian and US IT and financial services companies.
India remains a complex place to do business, but with
reforms instituted by the Modi government, barriers
have fallen and many processes have been simplified.
The re-election of Prime Minister Narendra Modi to a
second term in May 2019 assures that these reforms
will continue. Sustained economic growth and national
strategies that push digitization across a range of
sectors and services are creating unique synergies with
the Bay Area that open the door to new opportunities,
as Bay Area companies expand their global footprint
and diversify their market presence in Asia.
7
Introduction
India and the United States are poised at the threshold
of a closer, more productive relationship than at any
point in the recent past. The two countries had been
distant during the years of the cold war, as the United
States confronted the Soviet Union and India embraced
a non-aligned status friendly to the Soviet Union
and economic policies at home that were socialist at
heart. Much changed with the end of the Cold War, as
successive Indian governments launched reforms to
open India’s economy, reduce bureaucratic burdens,
and strengthen market forces. A groundbreaking
nuclear agreement between the United States and
India, to enable cooperation on civil nuclear energy in
2005, reduced political strains and laid the foundation
for a new political dialogue.
1
More recently, initiatives
under India’s current Prime Minister Narendra Modi have
further reduced regulatory and bureaucratic burdens
on business and embraced digitization as a key to
modernizing India’s economy.
A shared strategic perspective on political and security
issues in the “Indo-Pacific region” has also brought
the two countries closer together. While India’s stance
remains independent and distinctly Indian, common
perceptions on regional security have deepened the
bilateral dialogue and cooperation. In September
2018, the United States and India held an inaugural
2+2 dialogue between India’s Ministers of External
Affairs and Defense and the US Secretaries of State
and Defense. Their joint statement declared that “The
Ministers reaffirmed the strategic importance of India’s
designation as a Major Defense Partner (MDP) of the
United States and committed to expand the scope of
India’s MDP status and take mutually agreed upon steps
to strengthen defense ties further and promote better
defense and security coordination and cooperation.”
2
The statement also affirmed that “the two countries are
strategic partners, major and independent stakeholders
in world affairs”
3
and opened the door to defense
industry supply chain linkages.
Along these lines, a new Communications Compatibility
and Security Agreement (COMCASA) now facilitates
interoperability between Indian and US defense forces,
providing India access to more advanced communications
technology for defense equipment purchased from the
United States and from US allies with similar equipment.
4
In July 2018, US Commerce Secretary Wilbur Ross
announced that India would be granted Strategic Trade
Authorization (STA-1) status similar to NATO allies, Japan,
Australia, and South Korea, facilitating the export to India
of high-technology products.
5
Significantly for Silicon Valley, the September 2+2
meeting included an agreement that an Indian liaison
will be included in the Defense Innovation Unit (DIU),
the US Defense Department’s innovation office in Silicon
Valley which seeks to accelerate commercialization and
deployment of cutting-edge technology from smaller
US technology companies in the defense procurement
system. DIU will coordinate with Indian teams from
Innovations for Defence Excellence (iDEX), a unit
created in August 2018 by India’s Defence Innovation
Organization
6
to foster an innovation ecosystem for
technologies in the defense and aerospace sectors.
7
These agreements build on ongoing dialogues,
including the India-US Strategic Dialogue on Biosecurity,
to which Lawrence Livermore National Laboratory is
a contributor.
8
The US-India strategic relationship was
further cemented with the passage in December 2018
of the Asia Reassurance Act of 2018 (ARIA), Section 204
of which identifies the central role of India in promoting
peace and security in the Indo-Pacific region, and
calls for a strengthening of diplomatic, security, and
economic ties between the two countries.
9
This US shift toward India corresponds with India’s
changing perception of itself and its role in the world,
as it moves from a historical position of “strategic
autonomy” toward a position of global leadership
that embraces strategic partnerships. India’s status as
the world’s largest democracy and its commitment to
8
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
market economy principles provides a strong foundation
of shared values, but sustained commitment on both
sides will be required for the relationship to achieve its
full potential.
This emerging economic and strategic alignment builds
on an economic base that is decidedly modest. For
two nations of such size, bilateral trade and investment
is small—particularly compared to US trade and
investment with China and with economic partners with
much smaller populations and GDPs.
India’s scale, young population, technical capability,
entrepreneurial energy, and large immigrant population
in the region link it powerfully to the Bay Area and Silicon
Valley. For many years, Bay Area technology and other
companies have used India’s deep base of offshore IT
services, opening R&D centers across India, and making
the region the largest single source of partners for Indian
IT companies globally. As the IT industry changes with
the advent of AI and cloud computing, that relationship
will shift. New areas for partnership are also emerging
as India’s economy is rapidly digitized. Opportunities
will particularly grow in fields such as health, fintech,
infrastructure, smart cities, semiconductor and cellphone
manufacturing, and renewable energy—all fields where
the Bay Area excels and India’s needs and capacities will
grow. These linkages present opportunities for the Bay
Area and its Indian partners that are unique and large
scale, but that also will require focus and patience to
realize. For the Bay Area/Silicon Valley, it is time to take
anew look at India.
“
The most strategic
relationship between any
two countries in the world
is between India and
the United States. India
is at an inflection point
of exponential growth,
and implementation is
the biggest challenge.
Toachieve it, partnership
with the US, including
Silicon Valley, is important.
”
John Chambers, CEO, JC2 Ventures,
former Executive Chairman and CEO, Cisco
9
1
India’s Economy: Poised for Takeoff
The demographics are favorable.
The entrepreneurial optimism and
energy are infectious. Can a fractious
political system finally get out of its
own way?
A well-worn cliché about India is that it has a very bright
economic future—and has had for decades. In truth,
India’s economy has grown dramatically from a very low
base, pulling a massive population behind it, and the
road to prosperity is long. For many, progress is erratic
and frustratingly slow, with persistent poverty, inefficient
government, and underperforming infrastructure. But
there is another reality, of an economy that has grown
to become the world’s sixth largest, with deep reservoirs
of human capital, leading global businesses, armies of
motivated entrepreneurs, and potentially vast markets
that invite development.
Since the 1991, economic and governance reforms
that signaled the beginning of the end of the so-called
“License Raj”—the post-colonial tangle of laws,
regulations, fees, and taxation that stifled business
formation and innovation for decades — India has been on
a growth trajectory most nations would envy. GDP growth
averaged 6.3% annually over the 1980–2016 period and
remained solidly in the 5–8% range coming out of the
global recession, according to the International Monetary
Fund. The economy grew by 6.7% in 2017, and the IMF
has estimated 7.3% growth for 2018 and forecasts further
growth of 7.5% for 2019. India is now the world’s fastest-
growing large economy, surpassing China (6.6% growth
estimated for 2018 and 6.2% forecast for 2019).
1
India’s GDP has grown from $266.5 billion in 1991
2
to
nearly $2.6 trillion in 2017, edging past France to make
India the world’s sixth largest economy in nominal GDP
terms.
3
Per capita income, adjusted for purchasing
power parity (PPP), has increased six-fold over the
1991–2017 period, from $1,140 to $6,980, according
to World Bank data.
4
However, incomes vary widely
across states. A 2017 comparison of per capita income
for the four states that contribute the most tax revenues
(Maharashtra, Gujarat, Tamil Nadu, and Karnataka) with
per capita income for the four states that receive the
largest distributions from collected taxes (Uttar Pradesh,
Bihar, Bengal, and Madhya Pradesh) showed that
average income for people in the four richer states was
three times greater than the average for the four poorer
states.
5
The nationwide average per capita income
at current prices during 2017–2018 is estimated at
about $1,600 (Rs 1,12,835), according to data from the
Ministry of Statistics and Programme Implementation
(MOSPI).
6
Former Reserve Bank of India governor
Raghuram Rajan has said that in order to end extreme
poverty, the national average will need to rise four-fold
and become more widely distributed; getting there
could take 20 years.
7
This points to another conundrum
when considering India’s economy: average incomes
remain low, but India is home to a large and growing
middle class that numbers several hundred million.
10
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
Over the next decade, it is expected that India will meet
or exceed the 7% GDP growth rate needed to keep
pace with population growth. The World Economic
Forum has estimated that between 2018 and 2030,
India’s marginalized and lower classes will shrink in
numbers, with more than 140 million households
added to the lower-middle and upper-middle income
tiers.
8
The IMF forecasts that India will be the world’s
fourth largest economy by 2022,
9
and the Economist
Intelligence Unit estimates that by 2027, India’s
consuming classes will have more premium consumers
than Japan or Korea.
10
Demographics and Disruption
in the Labor Market
According to India’s official jobs data, which is
released sporadically and is considered inconsistent,
the national unemployment rate has been historically
low for a workforce of some 520 million in 2017,
hovering around 4% since 1991.
11
However, there are
indications that despite India’s economic expansion,
finding work is becoming increasingly harder, and a
leaked government estimate for the year ending in
March 2018 suggests that the unemployment rate
has risen to at least 6.1%, the highest in more than 40
years.
12
In addition, the official rate masks important
realities, most notably a labor force participation rate
of only 52% in 2015 (the most recent year for available
data) and an informal economy that employs nearly
90% of workers in unincorporated firms with fewer
than 10 employees and no job security or pension
benefits.
13
Small businesses provide the largest share
of employment after agriculture and make a significant
contribution to India’s GDP.
14
Over time, the workforce has become more urban.
Agriculture—for decades India’s largest economic
sector—now produces only about 15% of economic
output while industry has edged up to slightly above
30% and services now dominate at more than 50%.
15
These trends correspond with a gradual but steady
migration from the countryside to cities, which offer
more opportunities and significantly higher wages.
16
In sharp contrast to China’s population, which is rapidly
aging, India’s population is young. People aged 15–34
make up slightly over a third of India’s population and
exhibit 1
India’s GDP growth rate averaged 6.3% annually over 1980–2016 and has
remained solidly in the 5–8% range coming out of the global recession.
India’s Annual GDP Growth Rate, 1980–2018, percent
0
2%
4%
6%
8%
10%
12%
20182016201420122010200820062004200220001998199619941992199019881986
1984
19821980
Source: IMF Data Mapper Graph: Bay Area Council Economic Institute
11
India’s Economy: Poised for Takeoff
most of its eligible workforce;
17
the median age is 28.
18
This is both an opportunity and a challenge: close to a
million young people reach working age every month,
which means India must create nearly 10 million new
jobs every year to keep up.
19
Contrasts in India continue across the spectrum.
Graduates of elite technical schools thrive as
entrepreneurs, building a soaring internet and gig
economy. Yet only a little over a quarter of the
population over the age of 25 has completed a
secondary education,
20
and the World Bank estimates
that well over a quarter of the youth population is
not in education, employment, or training (NEET).
21
A
fragmented labor market of small, informal businesses,
uneven educational opportunity, and job growth
concentrated in high-skill service sectors inhibits social
mobility and advancement for those less privileged.
While the country’s youth provide a potentially
deep well of human capital, India’s much vaunted
“demographic dividend” could become more a
demographic burden unless sufficient health, education,
and other benefits can be delivered to develop the
promise of this growing cadre of young people.
The urbanization narrative is also not as simple as
it sounds. Agriculture may produce only 15% of
economic output, but it was still employing 42.74% of
the nationwide workforce in 2017.
22
By contrast, the
information technology/business process management
sector for which India is most famous accounts for less
than 8% of GDP and hires only 3.9 million workers
23
(less than 1% of the workforce). While independent
work—ride share, e-commerce, online financial services,
and micro-entrepreneurship—have brought 18–22
million workers into the formal economy in recent years,
according to McKinsey,
24
most jobs are still part-time
and/or temporary, contributing to underemployment.
To address the skills gap, a National Skill Development
Corporation set up by the government has provided
training to more than half a million workers, but only 12%
of them have found better work as a result.
25
Tough labor
rules, most notably on hiring and firing by firms above
a certain size, have kept businesses intentionally small,
exhibit 2
Agriculture—for decades India’s largest economic sector—now produces
only about 15% of economic output, while industry has edged up to slightly
above 30% and services now dominate at more than 50%.
Contribution of Agriculture, Industry, and Services to India’s GDP, FY91–FY16, percent share of GDP
0
10%
20%
30%
40%
50%
60%
Services
Industry
Agriculture & allied services
FY16FY14FY12FY10FY08FY06FY04FY02FY00FY98FY96FY94FY92
Source: Firstpost Graph: Bay Area Council Economic Institute
12
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
preferring to avoid tax and regulatory costs and to grow
by automating or through temporary contract workers.
As a consequence, few Indian manufacturers achieve the
scale needed to compete nationwide or globally.
“As of now it seems India has a long way to go in
leveraging economies of scale,” acknowledges Nisha
Rajan, senior policy coordinator at the US-India Strategic
Partnership Forum (USISPF). “However, the trajectory
seems positive with the Modi government’s recent
efforts to initiate labor reforms in a bid to formalize the
Indian economy.”
Rajan points to consolidation of 44 central government
labor and employment laws into four unified codes:
industrial relations; social security and welfare; wages;
and occupational safety, health, and working conditions.
Specific reform proposals, in areas such as maternity
benefits, the right to unionize, hours of work and
overtime, contract labor, gig workers, and tips could affect
as many as 140 laws. “The present regime has displayed
the political will to reform in this area. There is no doubt
that without these reforms India is not likely to achieve the
targeted growth rates in its manufacturing sector.”
26
Distinct social pressures also affect the presence and role
of women in the workforce. In an April 2017 report, the
World Bank Group South Asia Region noted that India’s
female labor force participation (FLFP) dropped by an
estimated 19.16 million during the period from 2004–05
to 2011–12, from 42.7% to 31.2%. Not all of that
decline was necessarily negative. Approximately 53%
of the falloff occurred in rural areas, as the expansion
of secondary education and changing social norms
enabled young women aged 15–24 to continue their
education rather than join the labor force early. For the
overall category of women 15 years of age and above,
the most crucial factor explaining the drop in FLFP was
increased stability in family income due to the increase in
the relative contribution of regular wage earners and the
corresponding decline in casual laborers.
27
According to government data published in 2018,
women made up 46.23% of students enrolled in higher
education during 2015–16.
28
Furthermore, a government
data assessment by Press Trust of India found that for
the period from 2014 to 2017, the gender ratio of PhD
candidates at Indian universities was 5 women for every 7
men.
29
India’s 2014 National Sample Survey indicates that
exhibit 3
The India Manufacturing Purchasing Managers’ Index lagged in 2017 after
demonetization and the goods and services tax launch.
India’ s Manufacturing Activity Trend: Purchasing Managers’ Index, monthly data, February 2016 to March 2019
46
47
48
49
50
51
52
53
54
55
Feb
2019
Dec
2018
Oct
2018
Aug
2018
Jun
2018
Apr
2018
Feb
2018
Dec
2017
Oct
2017
Aug
2017
Jun
2017
Apr
2017
Feb
2017
Dec
2016
Oct
2016
Aug
2016
Jun
2016
Apr
2016
Feb
2016
Source: IHS Markit; Trading Economics
13
India’s Economy: Poised for Takeoff
74.8% of urban women are literate, compared to only
56.8% of their rural counterparts. Yet women composed
only 14.8% of the urban workforce in 2015–16,
30
and the
Monster Salary Index report on the 2018 gender pay gap
in India found that women’s earnings were 19% less than
men’s.
31
The McKinsey Global Institute has estimated
that achieving gender parity by 2025—involving legal
protections, pay equity, physical security, child and elder
care, closing the education and skills gaps, and changing
diversity policies and attitudes—could add 68 million
more women to India’s workforce and $2.9 trillion more
in GDP to the economy than would be the case in a
business-as-usual scenario.
32
Tax & Currency: Out with the Old
Since coming to power in 2014, the government of
Prime Minister Narendra Modi has embarked on a series
of bold reforms designed to re-ignite growth, streamline
governmental processes, and propel India into the 21st
century’s digital economy. Two disruptive but ultimately
positive economic reforms introduced in the past two
years slowed business activity dramatically, but only on
a temporary basis. First, “demonetization” canceled and
replaced commonly used large-denomination notes—
86% of India’s currency—with new denominations, with
the goal of constraining criminal cash flows, tax evasion,
and counterfeiting.
33
While the move was generally
welcomed, it left ordinary consumers scrambling to
convert their cash, often standing in bank lines for
hours, while small businesses operating on a cash basis
were suddenly unable to pay workers and suppliers.
Consumer demand, new hires, and investment stalled
during the transition. The comparative ease with which
upper classes were able to convert their bills further
intensified the lingering, if not growing, sense of social
and economic inequality.
Second, a national goods and services tax (GST), effective
from July 2017, compounded the short-term friction and
uncertainty, even though many expect that its long-term
effects will be positive. The GST consolidated various
indirect central government and state taxes, including
sales, service, excise and state VAT taxes, customs duties,
surcharges, and state luxury and “sin” taxes. These
were absorbed into a combined central/state GST with
fewer tiers, to simplify filing, avoid double taxation, and
improve collections. Indirect tax collection is critical in a
largely informal economy of small incomes where only
1.5% of individual taxpayers—19 million people—paid
income tax in early 2017.
34
Nevertheless, the rollout of
the GST—which involved intensive debate over how
various goods and services would be classified, as well as
in many cases the need to set multiple tiers of taxation
relating to certain goods (as opposed to one unitary
rate)—was not as friction-free as proponents had hoped.
Combined disruption from demonetization and the
GST launch hit businesses hard in 2016–17, coming
on the heels of droughts in 2014–15 that hurt farmers,
rising oil prices that squeezed manufacturers, and poor
infrastructure that continued to cripple farm and retail
supply chains.
Amid confusion over tax liability and compliance, private
and state company investment hit a 13-year low in
the third quarter of 2017, according to estimates from
the Centre for Monitoring Indian Economy Pvt. Ltd. in
Mumbai.
35
Since then, however, businesses have begun
to emerge from the shadows. Indian credit rating and
data research firm CRISIL reported surges of 19.7% in net
corporate tax collections and 18.6% in personal income
tax collections between April 2017 and February 2018.
36
While demonetization, GST, and other such reforms
will prove successful over time, the pace of recovery
and future development will be influenced by two
longstanding and growing constraints—wealth inequality
and a massive overhang of public and private debt.
A Rising Tide Lifts Some Boats
As mentioned earlier, the urban-rural divide, a
fragmented labor market of mostly small businesses,
and an education and skills gap have combined to
concentrate wealth in key cities and sectors.
A 2017 study by economists Lucas Chancel and Thomas
Piketty, using tax and survey data and national accounts,
shows a steady rise in the share of total national income
concentrated among the top 10% of Indian earners and
corresponding declines among the middle 40% and
bottom half of earners—trends underway since the late
1980s. While all incomes have grown since that time, the
author’s analysis of India’s income growth rates between
1980 and 2015 reveals a much higher income growth rate
for the top 10% of earners, who saw a 435% increase in
14
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
their incomes compared to the bottom 50% of earners,
who experienced an income growth rate of 90%.
37
At the start of the January 2019 World Economic Forum
Annual Meeting, Oxfam‘s international executive
director noted that India’s top 10% of the population
held 77.4% of the total national wealth in 2018, with
the top 1% holding 51.53%.
38
India added 18 new
billionaires between 2017 and 2018, bringing the
total up from 101 to 119, an increase of 17.82%. By
comparison, China’s number of billionaires grew by
16.93 percent, rising from 319 in 2017 to 373 in 2018.
39
Rising wealth inequality, combined with lingering fallout
from demonetization and GST, have ramped up political
pressure on the Modi government. This was evident in
the administration’s 2018 budget: higher minimum price
supports for farmers; higher customs duties on imported
consumer goods to encourage inward investment;
national healthcare for poor families; and a corporate
tax cut targeted to small and mid-sized businesses.
40
Turning a Corner
Much work remains to be done to clear the obstacles
to faster growth, whether in privatizing mismanaged
state-owned businesses; enacting justice system reform
to unclog a national backlog of 30 million legal cases
(including 2 million pending for more than a decade);
41
easing extremely restrictive employment rules; reining
in energy and agriculture subsidies; or paring back
corruption in the allocation of land and capital for
infrastructure projects. Nevertheless, there is much
to applaud in what has already been accomplished
through initiatives—beyond demonetization and
GST—that include various forms of deregulation and
the aggressive promotion of digitization across the
economy. These include the secure digital delivery of
government benefits payments through the linking of
the Aadhaar digital identity system through mobile
phones to the Jan Dhan Accounts system—enabling
the opening of over 350 million “zero-balance” bank
accounts and allowing the rural and urban poor to
participate in the formal banking economy.
42
Ultimately, the government holds out the vision
of a cashless economy; universal healthcare with
telemedicine reaching into rural areas; a gradual
shift to cleaner energy over a distributed grid; and
modern, efficient water systems and food supply chains
connected in the cloud via 5G wireless networks and
sensors. A consensus is slowly forming in India that a
corner has been turned, that the country has indeed
come a long way since 1991, that momentum is
increasing, and that this time, despite the usual fits and
starts, may indeed be different.
exhibit 4
Trends underway since the late 1980s show a steady rise in the share of total
national income concentrated among the top 10% of Indian earners and
corresponding declines among the middle 40% and the bottom 50% of earners.
Top 10%, Middle 40%, and Bottom 50% National Income Shares in India, 1951–2015
Middle 40%
Top 10%
Bottom 50%
25
30
35
40
45
50
55
1950
Percent of National Income
15
20
25
30
Percent of National Income
2010200019901980197019601950 201020001990198019701960
Source: Lucas Chancel and Thomas Piketty
15
2
Trade and Investment: Flow Management
India knows it needs to expand
trade and lure investment. But how
much, and what kinds? And can
the infrastructure meet pent-up
demand?
The dominant role of small, informal businesses that
compose most of India’s economy limits the country’s
trade and investment footprint. Firms have difficulty
scaling up to compete for global orders. For many,
staying outside the formal tax and regulatory system
precludes access to formal trade finance. Thin margins
and overreliance on part-time or temporary labor
remove the incentive to recruit more skilled workers
or train existing ones. Undercollection of taxes and
underpayment for utilities starve the government of
revenue to upgrade and maintain infrastructure. And
while many Indian companies have been growing in
size, outside of IT services the country still lacks the
nucleus of large, often export-oriented firms that the
September 2018 McKinsey “Outperformers” study has
identified with the most successful developing country
growth models over the last fifty years.
1
For an economy in the $2.6 trillion size range, India’s
2017 two-way goods trade total of $738.4 billion is
comparatively small, only 28.67% of GDP
2
and 2.1% of
world trade
3
(compared to the UK’s and France’s 41.53%
and 44.91% of GDP and 3.0% and 3.2% of world trade
respectively). More than two-thirds of India’s trade
activity concentrates in five states—Maharashtra, Gujarat,
Karnataka, Tamil Nadu and Telangana, according to the
government’s 2017–18 Economic Survey.
4
Large firms
are not necessarily the largest exporters, as is the case
in other countries; the top 1% of Indian firms together
account for 38% of exports, versus 72% in Brazil, 68%
in Germany, 67% in Mexico and 55% in the US.
5
India’s
trade deficit is significant: the Ministry of Commerce
and Industry reported an annual deficit of $87.2 billion
for the fiscal year ending in March 2018, up from $47.7
billion in the year ending in March 2017.
6
Major goods imports include crude oil and mineral fuels;
gold and precious stones; electrical machinery; computers
and phone system devices, including smartphones;
organic chemicals; steel; and optical and medical
equipment.
7
Major exports are petroleum products; gems
and jewelry; vehicles; pharmaceuticals; and apparel.
8
Two-way services trade in 2017 totaled $294.7 billion,
with India running a net surplus of $75.9 billion.
9
Top
services import sectors include travel, transportation,
business services, and telecommunications, computer,
and information services.
10
Top services export sectors are
travel, transportation, software, and business services.
11
While India’s global services exports and imports
increased by 14.52% and 14.08% respectively between
2016 and 2017, the net surplus increased by 15.17%.
16
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 5
Two-way services trade in 2017 totaled $294.7 billion, with India running a
net surplus of $75.9 billion.
India Two-Way Services Trade, 2014–2017, US$ billions
0
$50
$100
$150
$200
Net
Services Imports
Services Exports
2017201620152014
$157.2
$81.1
$76.1
$156.3
$82.6
$73.6
$161.8
$95.9
$65.9
$185.3
$109.4
$75.9
Source: WITS, World Bank
exhibit 6
After reaching a plateau between 2013 and 2016, US imports and exports
both rose between 2017 and 2018; the net US deficit decreased slightly.
US Goods Trade with India, 1995, 2000, 2008, and 2013–2018, US$ billions
-$30
-$20
-$10
0
$10
$20
$30
$40
$50
$60
Net
Imports
Exports
201820172016201520142013200820001995
$3.3
$5.7
-$2.4
$3.7
$5.7
-$7.0
$17.7
$25.7
-$8.0
$21.8
$41.8
-$20.0
$21.5
$45.4
-$23.9
$21.5
$44.8
-$23.3
$21.6
$46.0
$25.7
$48.6
-$24.4
-$22.9
$33.1
$54.4
-$21.3
Source: Office of the United States Trade Representative Graph: Bay Area Council Economic Institute
17
Trade and Investment: Flow Management
Service exports are led by India’s robust information
technology (IT) sector, which in the last two decades
has established a position of global dominance. India’s
Ministry of Electronics & Information Technology
has estimated that exports in the IT-ITeS (IT-enabled
services) sector—which includes IT services, BPO
(business process outsourcing also known as business
process management or BPM), and Engineering R&D
and software development—will total $126 billion for
2017–18, up from $117 billion in 2016–17, reflecting
compound annual growth of more than 10% between
2013 and 2018. IT accounts for 57% of the IT-ITeS
sector, while BPO makes up 21.2%, and Engineering
R&D and software development composes 21.8%.
12
The US is the largest buyer of Indian IT-ITeS exports,
absorbing approximately 62% of global sales in each
year since 2014, according to the India Brand Equity
Foundation.
13
This suggests sales of more than $72
billion to the US in 2016–17.
According to UN Comtrade 2017 data, 58% of India’s
imports are from Asia, compared to 18% from Europe,
12% from the Americas, and 8.1% from Africa.
14
Half of
India’s exports go to Asia, compared to 19% to Europe,
21% to the Americas (including about 16% to the US),
and 8.2% to Africa.
15
China is the largest seller to India;
the US is India’s largest buyer.
16
US-India Trade
The US has run sustained trade deficits with India
that have widened over time, as goods trade volume
has increased and as the cross-border flow of IT-BPO
(IT services-business process outsourcing) exploded
during the 1990s. Two-way US-India goods trade in
2018 totaled $87.5 billion, with a net US deficit of $21.3
billion—both up significantly from a decade earlier, when
total trade was $43.4 billion with an $8 billion deficit.
17
Top US goods imports from India in 2018 included
precious metal and stone (diamonds), pharmaceuticals,
machinery, mineral fuels, and vehicles. Top exports to India
were precious metal and stone (diamonds), mineral fuels,
aircraft, machinery, and optical and medical instruments.
18
exhibit 7
The net US deficit in services trade with India has been shrinking by about
$1 billion per year since 2014, from $7.1 billion in 2013 and 2014 to $3.0
billion in 2018, a 57.7% decrease.
US Services Trade with India, 1995, 2000, 2008, and 2013–2018, US$ billions
-$10
-$5
0
$5
$10
$15
$20
$25
$30
Net
Imports
Exports
201820172016201520142013200820001995
$1.3
$0.9
$0.5
$2.8
$1.9
$0.9
$10.0
$12.7
-$2.6
$13.3
$20.4
-$7.1
$15.3
$22.4
-$7.1
$18.5
$24.7
-$6.1
$20.6
$25.8
$23.7
$28.1
-$5.2
-$4.4
$25.8
$28.8
-$3.0
Source: Office of the United States Trade Representative Graph: Bay Area Council Economic Institute
18
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 8
The Bay Area’s leading exports to India are fruit and nuts. India is a growing
auto manufacturing hub, and vehicles are now the leading imports.
Top Ten Exports to India Through the San Francisco Customs District, 2018 Compared to 2017, US$ millions
0 $100 $200 $300 $400
2018
2017
Mineral Fuel, Oil Etc.; Bituminous Substances; Mineral Wax
Products of Animal Origin, NESOI
Aluminum and Articles Thereof
Miscellaneous Chemical Products
Iron And Steel
Cotton, Including Yarn and Woven Fabric Thereof
Nuclear Reactors, Boilers, Machinery Etc.; Parts
Electric Machinery Etc.; Sound Equip.; TV Equip.; Pts.
Optical, Photo Etc., Medical or Surgical Instruments Etc.
Edible Fruit & Nuts; Citrus Fruit or Melon Peel
$588.8
$534.8
Top Ten Imports from India Through the San Francisco Customs District, 2018 Compared to 2017, US$ millions
0 $100 $200 $300 $400
2018
2017
Oil Seeds Etc.; Misc. Grains, Seeds, Fruits, Plants Etc.
Pearls, Precious/Semi-Precious Stones, Precious Metals; Coins
Leather Art; Saddlery Etc.; Handbags Etc.; Articles of Animal Gut
Fish, Crustaceans & Aquatic Invertebrates
Food Industry Residues & Waste; Prepared Animal Feed
Articles of Iron or Steel
Apparel Articles and Accessories, Knit or Crochet
Textile Art NESOI; Needlecraft Sets; Worn Textile Art
Furniture; Bedding Etc.; Lamps NESOI Etc.; Prefab. Buildings
Vehicles, Except Railway or Tramway, and Parts Etc.
Source: USA Trade Online, US Census Bureau Graph: Bay Area Council Economic Institute
19
Trade and Investment: Flow Management
US-India services trade in 2018 totaled $54.6 billion.
US services imports, valued at $28.8 billion, more than
doubled from 2008; services exports to India, valued
at $25.8 billion, were 2.58 times greater. The net US
deficit in services trade has been shrinking by about
$1 billion per year since 2014, from $7.1 billion in 2013
and 2014 to $3.0 billion in 2018, a 57.7% decrease.
Top services imports from India in 2018 were in the
computing and telecommunications services, IT, research
and development, and travel sectors. Top services
exports were in the travel, intellectual property (computer
software, audio and visual related) and transport sectors.
19
Exports to India supported an estimated 260,000 US
jobs in 2015, the latest year for which data is available,
according to a 2017 study by the East-West Center and
the Federation of Indian Chambers of Commerce and
Industry (FICCI). More than 52,000 of those jobs were
in California.
20
A Regional Snapshot
Goods
A pattern of steady across-the-board growth applies to
Bay Area trade with India, where two-way India ocean
and air freight through the San Francisco Customs District
in 2017 totaled more than $1.7 billion.
21
Unlike the US
as a whole, the region has enjoyed a net trade surplus
with India since 2015—$1 billion in exports versus $700
million in imports. From 2013 to 2017, Bay Area exports
to India grew by nearly 52%; imports grew by 11%.
(NOTE: US Census Bureau trade data reported here
reflects not only exports produced and shipped or
imports received locally, but also includes other US
trade using the Bay Area as a gateway, as well as a small
share of transshipped goods with origins or ultimate
destinations abroad, such as Canada or Mexico.)
Nearly all of the $237 million in Bay Area air cargo bound
for India in 2017 moved through San Francisco and San
Jose International Airports; nearly all of the $802 million
in ocean freight moved through the Port of Oakland,
which also includes Oakland International Airport.
The potential for expanding US and Bay Area trade with
India trade is significant. As a 2017 Brookings analysis
highlights, Korea’s trade with the US is twice the size
of India’s, although Korea’s economy is 40% smaller;
China’s population is similar to India’s, yet its trade with
the US is six times larger.
22
Services
There is also opportunity to grow services trade
with India, and in particular US services exports. The
opportunity lies partly in opening the Indian market
to foreign legal, accounting, banking, insurance and
retail competition (see Trade Issues below), and partly
in nascent fields such as healthcare, clean energy,
infrastructure, smart cities, and logistics, which are
discussed in detail elsewhere in this report. These
opportunities particularly connect to the Bay Area,
givenIndia’s needs and what the Bay Area offers.
Currently, much of the Bay Area’s services trade with
India is in travel and tourism—Indian business travel,
tourism, and family visits in both directions—and in
technology-based business services provided by Indian
visa contract workers employed in the region. The
two are, in many respects, closely intertwined, but the
IT-BPO activity has a far larger impact on the regional
economy in terms of jobs and wealth creation and is still
the driver of most visitor traffic to and from India.
Visitors
Some 352,000 travelers visited California from India in
2018 and spent an estimated $788 million in the state,
according to Visit California, a non-profit marketing
organization that partners with the state’s travel industry.
Those numbers are expected to grow by almost 6%
annually to 443,000 visitors and estimated spending of
$992 million in 2021.
23
Demonetization hurt the Indian travel sector in 2016–17
by taking out of circulation large amounts of cash
typically kept on hand for travel and other discretionary
purchases. Then, between March and July of 2017, a
US-imposed ban on carry-on laptops and tablets on
arriving flights from eight Middle Eastern countries led
to a sharp drop-off in India-to-US travelers on popular
routes via the Emirates airline hub in Dubai and via
the Etihad Airways hub in Abu Dhabi. Etihad, which in
February had already begun scaling back its flights to
the US, completely eliminated its Abu Dhabi to San
Francisco flights in October.
24
20
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 9
Some 352,000 travelers visited California from India in 2018 and spent an
estimated $788 million in the state. Those numbers are expected to grow
by almost 6% annually to 443,000 visitors and estimated spending of
$992 million in 2021.
Number of Indian Visitors to California, 2009–2018
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2018201720162015201420132012201120102009
153,000
182,000
184,000
190,000
240,000
262,000
291,000
319,000
333,000
352,000
Source: Visit California
However, overall demand for flights from India to the
West Coast soon recovered, and the short-lived laptop
ban seemingly created a window of opportunity for
Air India, which saw its bookings for flights to the US
double in the two weeks after the ban was announced.
25
After having launched direct flights from Delhi to
San Francisco in December 2015, starting with three
weekly flights and then doubling to six flights a week
in November 2016, Air India increased its service again
to nine flights a week in March 2018. United Airlines
also began providing non-stop flights between Delhi
and San Francisco with the launch of its “seasonal daily
service” in December 2019.
26
Global travel is on the rise in India, as the economy
grows, living standards improve, and vacations become
more accessible and frequent. In the premium segment
of the market, Indians are regularly exposed to print
and television images of California, and are intrigued by
its scenery, available travel experiences, and celebrity
culture. Until recently, the ease of obtaining visas has
been a plus for attracting Indian visitors. According to
the San Francisco Travel Association, India was one of
the four fastest growing international visitor markets
in 2018.
27
Visit California reports that 53% of visitors
from India are leisure travelers, combined business and
leisure travel is becoming more common, and Indian
visitors traveling as nuclear families is a new trend. The
long flight encourages a longer stay, an average of 19.6
nights, and the average spend is $2,527 per trip.
28
IT-BPO
Indian engineers and programmers contribute valuable
expertise to a Bay Area tech community that has, over
many years, struggled to find both the right global post-
graduate talent critical to innovation and the sizeable
numbers of skilled workers large firms need. Outsourced
skilled tech employment represents an important Indian
services export to the US and the Bay Area.
21
Trade and Investment: Flow Management
US Citizenship and Immigration Service (USCIS) latest
available fiscal year data shows 67,815 Indian nationals
receiving initial H-1B visas in 2017, down from 70,737
in 2016. However, the number receiving extensions
for continuing employment totaled 208,608 in 2017,
up from 185,489 a year earlier. Initial visas are granted
for three years, with an option for a single three-year
extension. In total, Indian nationals received 75.6% of
H-1B visas approved in the United States in the 2017
fiscal year. Overall, USCIS approved 90.6% of the H-1B
visa petitions received in fiscal year 2017.
29
According
to reporting by The Mercury News, that approval rate
dropped to 85% for 2018, while the rate of delays rose
sharply, and it appears that greater scrutiny and increased
documentation requirements have increased the chances
that a delayed application will ultimately be denied.
30
Foreign workers, the vast majority from India and China
on H-1B visas, made up 71% of the IT workforce in
Silicon Valley and 50.3% of the San Francisco-East Bay IT
labor force in 2016, according to a January 2018 analysis
by the Seattle Times.
31
Six of the top 10 firms obtaining
H-1B visas were Indian contract employers, the list being
rounded out by large US tech and consulting firms.
Leading Bay Area companies drawing on H-1Bs in 2017
included Intel, Google, Facebook, and Apple. According
to US Citizenship and Immigration Services data for the
2017 fiscal year, average annual IT sector H-1B salaries,
generally ranged from $71,000 to $109,000, with the
median annual compensation at $85,000.
32
Trade Issues
Because two-way US-India trade itself is small, trade
frictions have been few and mostly minor. But the
cumulative impact and different objectives in both
countries’ trade policies have often discouraged
businesses from exploring the opportunities.
India and the US both subscribe to general principles
of free trade. With some notable exceptions, both have
relatively low tariffs. India’s politics are rooted in a strong
tradition of social justice and a mandate for government
to protect the disadvantaged against market excesses—
which makes some trade issues more complex. The US
International Trade Administration’s commercial guide
exhibit 10
Six of the top 10 firms obtaining H-1B visas were Indian contract employers,
the list being rounded out by large US tech and consulting firms.
Top 10 Firms Obtaining H-1B Visas in 2017
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000
Average H-1B Worker Salary ($)
2017 H-1B Visas Approved
Microsoft
HCL America
Amazon
Tech Mahindra Americas
Accenture
Deloitte
Wipro
Infosys
Tata Consultancy
Cognizant Tech Solutions
Indian Contract Employers US Tech & Consulting Firms
Source: US Citizenship and Immigration Services Graph: Bay Area Council Economic Institute
22
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
on Indian trade barriers
33
outlines key US complaints
that include
■ import licensing restrictions for motorcycles,
pharmaceuticals, refurbished computer parts and
boric acid;
■ export subsidies—tax exemptions on export
earnings, capital goods, local manufacturing taxes,
and goods produced in special economic zones—
that lower export prices of textiles and apparel and
work down government surplus stocks of sugar and
grains to support higher domestic producer prices;
■ an opaque government procurement process,
with different rules and contracts for the central
government, states, and various ministries, and
domestic business preferences and local content
requirements in defense and solar energy;
■ restrictions in services sectors including insurance,
banking services, securities, motion pictures,
accounting, construction, architecture and
engineering, retailing, legal services, express
delivery services, and telecommunications; and
■ limitations of foreign equity in certain major services
sectors, including financial services and retail; foreign
participation in professional services is significantly
restricted, and in the case of legal services,
prohibited entirely.
Implementing a goods and service tax (GST) across
India, a major Modi government reform, should lead
to a more consistent internal market and help to
lower transaction costs for foreign as well as domestic
companies. Reducing tariffs and achieving greater
reciprocity in market access, however, remains a US
objective. Indian sectors that are particularly vulnerable
to reciprocity-based tariffs include jewelry (where the US
consumes 30% of India’s exports), shrimp and prawns
(where the US consumes 40%) and pharmaceutical
products (where the US also consumes 40%).
34
India, for
its part, has pressed the US for improved access for its
agricultural goods, including mangoes, pomegranates,
grapes, rice, and honey.
The two countries also disagree on intellectual
property protection; India did not recognize global
pharmaceutical patents until after the WTO agreement
on intellectual property rights went into effect in 1995,
delaying until 2005 and the expiration of a ten-year
waiting period to do so.
35
Regarding pharmaceuticals,
India has taken the broad position that patents and
related pricing should not have the practical effect of
denying essential medical treatment in developing
countries and applies price controls on drugs and on
devices such as heart stents that it considers essential
(see Chapter 7 on Healthcare/Life Sciences).
India lodged a World Trade Organization complaint in
2016 over US decisions to double fees for special-skill
H-1B and intracompany transfer L-1 visas, heavily used
by Indian IT-BPO workers, and to reallocate some of
the H-1B visa allotment to Chile and Singapore under
free trade agreements with those countries.
36
With
the US and Europe accounting for more than 75% of
India’s IT outsourcing revenue and India’s top three IT
companies—Tata Consulting, Infosys, and Wipro—being
the largest users of H-1B visas, the fee increases were
estimated to cost such service firms an aggregate $400
million annually.
37
A Department of Homeland Security
proposal to reverse an Obama Administration policy
allowing spouses of H-1B workers holding H-4 visas to
work in the US was pushed toward its final stages in
February 2019, although its timetable is uncertain and it
could be delayed or blocked by lawsuits.
38
Elimination of
that option would place added burdens on the families
of H-1B visa holders. At the same time, USCIS Requests
for Evidence from applicants are growing
39
and more
applications are being delayed or denied; the denial
rate for new H-1B petitions quadrupled from 6% to 24%
between the 2015 and 2018 fiscal years.
40
As another point of friction, following a review that was
launched in April 2018, the US Trade Representative
announced in March 2019 that the United States would
terminate India’s eligibility for duty-free treatment on a
range of exported products under the Generalized System
of Preferences (GSP).
41
Designed to help the developing
world, the GSP permits duty-free imports of certain
products from developing countries that meet eligibility
criteria established by Congress. India has been the
largest beneficiary of the GSP, with $5.6 billion in exports
covered in 2017–18 and a duty benefit of $190 million.
42
The reason announced by the USTR was that India was
out of compliance with eligibility requirements, having
“implemented a wide array of trade barriers that create
23
Trade and Investment: Flow Management
serious negative effects on United States commerce,”
43
with specific areas of concern being restrictions on the
import of medical devices (knee implants and coronary
stents), and dairy and ICT products. Other triggers for the
US decision reportedly included the tightening of India’s
guidelines on e-commerce (impacting US companies such
as Amazon and Walmart-owned Flipkart), higher tariffs
on electronic products and phones, and new regulation
that would impact US financial services companies such
as Mastercard and Visa by requiring them to store their
data in India. (For more discussion on these issues,
see the Government Initiatives section of Chapter 6.)
GSP privileges were officially withdrawn on June 5,
2019.
44
India had suggested an openness to further
discussion on ICT and medical devices, but described
the dairy restrictions as non-negotiable for cultural and
religiousreasons.
45
In another flare-up of trade tensions, the US also
declined to grant India a waiver from its global tariffs of
25% on steel and 10% on aluminum imports, formally
implemented on March 8, 2018 to take effect 15 days
later.
46
At that time, only about 2% of India’s steel
exports and 2% of its aluminum exports were sold to the
US,
47
representing 2.4% of US imports of steel and 2%
of US imports of aluminum.
48
In June 2018, India notified the WTO of its decision
to retaliate with an equivalent amount—some $241
million—in tariffs on US exports of apples, almonds
(where India is the largest worldwide market for US
growers), palm oil, cashews, metal products, and other
items, originally scheduled to take effect in August
2018.
49
Since then, India has repeatedly delayed
implementation of the new tariffs, saying that it
wanted to allow time for negotiations with the US.
50
Foreign Direct Investment:
Early Days, Strong Growth
Inbound
While cumulative global foreign direct investment
to India is significant—nearly $368 billion in equity
capital investment and $165 billion in venture capital,
remittances, and other funds over 2000–2017,
51
according to the Department for Promotion of
Industry and Internal Trade (DPIIT)—flows have been
inconsistent. Investment has begun to accelerate again
under the Modi government. India received a record
$44.8 billion in equity capital FDI in fiscal year 2017–18
(April 2017 to March 2018) up from $43.4 billion in fiscal
year 2016–17,
52
$40.0 billion in 2015–16, and $30.9
billion in 2014–15.
53
The total for the first three quarters
of the 2018–19 fiscal year (April–December 2018 most
recent data) is $33.4 billion.
54
According to Dealogic, in 2018 the value of total
overseas acquisitions in India reached $39.5 billion,
overtaking the level in China ($32.8 billion). All mergers
and acquisitions involving Indian companies totaled
$93.7 billion, up 52% from one year earlier.
55
More than half of India’s FDI comes from Mauritius
(34%) and Singapore (18%). While both are home to
sizable Indian diasporas, most of that FDI does not
originate in those countries but is channeled through
them. The US accounts for only 6% of India’s cumulative
equity FDI inflow, some $22 billion according to DPIIT
(the official US number from the Bureau of Economic
Analysis is $28.3 billion). In recent years, US FDI to India
slowed, from $4.2 billion in the 2015–16 fiscal year, to
less than $2.4 billion in 2016–17, to only slightly over
$2 billion in 2017–18, in part due to uncertainty from
demonetization and GST.
56
The US is the sixth largest foreign investor in India
after Mauritius, Singapore, Japan, the United Kingdom
and the Netherlands
57
(with much of the investment
through the Netherlands, like that through Mauritius
and Singapore, consisting of investment routed from
elsewhere due to favorable tax and investment treaties).
India’s federal government has recently taken or is
studying a number of initiatives to attract more FDI and
to make it easier overall to do business in India. Among
them are
■ asking states to strengthen single-window clearance
systems for fast-tracking FDI approval processes
(action taken);
58
■ eliminating Department of Revenue review of FDI
projects and mandating that proposals in 11 sectors
requiring approval be cleared within 10 weeks from
receipt of application (action taken);
59
24
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 11
Cumulative FDI inflow to India’s services sector has been more than twice as
large as investment in other sectors, although the three top sectors paced
each other during the fiscal year ending in March 2018.
Top 10 Indian Industry Sectors Attracting Highest FDI Equity Inflows, 4/2000–5/2018 & Recent Fiscal Years, US$ billions
0 $5 $10 $15 $20 $25 $30 $35
Construction Infrastructure Activities
Power
Chemicals (excluding fertilizers)
Drugs & Pharmaceuticals
Trading
Automobile Industry
Construction Development (Housing et al.)
Telecommunications
Computer Software & Hardware
Services Sector
$66
Fiscal Year April 2017 to March 2018
Fiscal Year April 2016 to March 2017
Fiscal Year April 2015 to March 2016
Cumulative Apr 2000 to Mar 2018
Notes: Services sector includes Financial, Banking, Insurance, Non-Financial/Business, Outsourcing, R&D, Courier, Tech Testing and Analysis.
Construction Development includes Townships, Housing, Built-Up Infrastructure.
Source: DPIIT Graph: Bay Area Council Economic Institute
■ raising the foreign ownership cap on defense FDI
under the automatic route from 49% to 51% (action
under study);
60
■ allowing 100% foreign direct investment in cash
and ATM management companies, which are not
regulated under the Private Securities Agencies
Regulations Act (action taken);
61
and
■ eliminating the Foreign Investment Promotion
Board (FIPB), to enable direct clearance of foreign
investment proposals requiring government approval
by the relevant ministries (proposals requiring security
clearance would still be subject to separate Home
Ministry review) (action taken).
62
Bay Area companies are major investors. Data
compiled by fDi Markets, a research unit of the
Financial Times, shows 980 direct investments with
a cumulative value of $26.5 billion made in India
between January 2003 and August 2018 by 554
California companies from 74 cities. More than 79%
of that cumulative investment value ($21 billion)—
came from 434 companies in 36 Bay Area cities. Of
the top 20 California cities where the investment
originated, 16 were in Bay Area, and companies from
those cities were responsible for 69.8% ($18.5 billion)
of that cumulative investment value, reflecting the
significant deal flow to India from San Francisco and
Silicon Valley.
There were 730 investment projects distributed among
the top 10 Indian industry sub-sectors that received FDI
from California between January 2003 and August 2018.
The Software Publishing subsector dominated with 300
projects (41%), followed in order by Semiconductors &
Other Electronic Components with 87 projects, Custom
Computer Programming Services with 74 projects,
Communications Equipment with 72 projects, and
Internet Publishing & Broadcasting & Web Search
with 69 projects.
25
Trade and Investment: Flow Management
Noteworthy investments in India by Bay Area companies
in recent years include the following:
■ Alphabet (Google) has made six investments
totaling $138.5 million over 2016–2018, expanding
its engineering, design, development, and testing
operations in Hyderabad and Bangalore, opening
a Mumbai data center, and expanding its sales and
marketing footprint, all in support of its mobile
and cloud computing services for e-commerce
andpayments.
■ Palo Alto cloud data management, backup, and
recovery firm Rubrik invested $55.6 million over
2017–2018 in a Bangalore sales, marketing, and
support center employing 300 people.
■ Aemetis (AE Biofuels) has invested $475.8 million
between December 2007 and February 2019,
building and expanding a plant in the port city of
Kakinada in Andhra Pradesh, that turns agricultural
waste oils into biodiesel fuel for domestic sales and
export to Europe and the US.
■ In 2015, Cisco Systems undertook a $40 million
expansion of its 372,000 square meter “campus-
in-a-city” manufacturing facility in Bangalore. Over
2016–2018, it opened a $38 million innovation lab
in Jaipur and a $38 million networking academy and
startup incubator in Kerala, both focused on internet-
of-things (IoT) research and development, and an
$8.3 million global digital experience center in
Mumbai, targeting the financial services sector.
■ In 2018, San Mateo investment management firm
Franklin Templeton Investments, partnering with Santa
Clara/Hyderabad IT services firm Innova Solutions,
launched a $68 million investment in a 40-acre financial
exhibit 12
Between January 2003 and August 2018, 69.8% ($18.5 billion) of the
investment flow to India from California originated from companies in 16
Bay Area cities.
,
Bay Area Cities
Number of
Companies
Number of
Projects
Capital Expenditure
US$ millions
San Jose 77 158 $2,791.1
Santa Clara 51 100 $3,350.3
Sunnyvale 38 79 $1,579.9
San Francisco 54 71 $1,238.2
Mountain View 34 62 $2,054.0
Redwood City 17 59 $924.1
Palo Alto 29 57 $1,581.8
Milpitas 20 28 $438.7
Fremont 16 25 $275.9
San Mateo 14 24 $699.8
Menlo Park 11 18 $507.3
Pleasanton 8 17 $274.8
San Ramon 7 16 $2,047.1
Los Gatos 6 14 $68.4
Campbell 4 11 $124.0
Cupertino 6 10 $523.1
Total 392 749 $18,478.5
Cumulative India Investment by Companies in Bay Area Cities
Among the Top 20 California Cities Where Investment Originated
January 2003–August 2018
Source: fDi Markets Table: Bay Area Council Economic Institute
26
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 13
Software Publishing dominated the top 10 industry sub-sectors that
received FDI from California between January 2003 and August 2013.
Number of Projects in Top 10 Industry Sub-Sectors Receiving Outbound California FDI to India, Jan. 2003– Aug. 2018
0 50 100 150 200 250 300
Data Processing, Hosting, & Related Services
Corporate & Investment Banking
Computer Systems Design Services
Other (Software & IT services)
Business Support Services
Internet Publishing & Broadcasting & Web Search
Communications Equipment
Custom Computer Programming Services
Semiconductors & Other Electronic Components
Software Publishers, except video games
300
87
74
72
69
31
27
26
24
20
Source: fDi Markets Graph: Bay Area Council Economic Institute
technology R&D campus and incubator in the new city
of Visakhapatnam (Vizag) in Andhra Pradesh.
■ Starting in December 2017, Richmond-based MBA
Polymers built an $11.5 million waste management
and post-consumer plastics production facility in Pune.
■ Saama Technologies, a Campbell data management
and analytics firm, opened an $18.10 million artificial
intelligence R&D center in Chennai in 2017, focused
on optimizing clinical trial technology.
■ In 2017, Heat and Control, a Hayward food
processing machinery manufacturer, has opened a
$14 million, 11,800 square meter manufacturing and
testing facility to serve the Asia market.
Outbound
Measures of India’s outbound FDI tend to be
incomplete estimates that focus on large, publicized
deals while missing the considerable volume of smaller
entrepreneurial investments worldwide. Different sources
also count and report FDI differently. The United Nations
Conference on Trade and Development (UNCTAD)
reports $11.3 billion in outbound FDI from India in
2017.
63
During the decade from 2006 to 2016, FDI has
ebbed and flowed as investor confidence has risen and
fallen at home, with a pronounced rebound in 2017.
Paralleling inbound FDI sources, the two largest
destinations for India’s outbound FDI are Mauritius and
Singapore, where many Indian businesses are domiciled.
While those sites received 20% of outbound investment
in 2014, they accounted for 58% in 2017. Three other
tax jurisdictions—the British Virgin Islands, Jersey, and
Switzerland—make up the top five destinations, with
the US in sixth place.
64
The cumulative flow of Indian investment into the US had a
compound annual growth rate (CAGR) of 13.29% between
2010 and 2017.
65
The rise was steady, except for a dip in
2016—which is consistent with worldwide FDI flows in that
year—with the growth resuming quickly in 2017.
66
According to the US Commerce Department’s
SelectUSA program, India’s stock of foreign direct
investment in the US totaled $13.1 billion in 2017.
67
Some of the risk capital part of this investment came
from Indian tech giants Infosys and Wipro, which both
27
Trade and Investment: Flow Management
have venture capital arms that actively invest in startups
as part of their strategies to seek new lines of business,
particularly in the big data, AI, and automation new
technologies sectors.
68
Examples of Bay Area companies
that have received such investment include
■ Mountain View headquartered big data analytics company
Waterline Data Service, which received a $4 million initial
investment through the Infosys Innovation Fund in January
2016 and a follow-on investment of $1.5 million dollars as
part of a Series C funding round in 2018;
69
exhibit 14
India’s outbound FDI rose and fell in the decade between 2006 and 2016, as
investor confidence fluctuated at home, with a pronounced rebound in 2017.
0
$5
$10
$15
$20
201720162015201420132012201120102009200820072006200520042003200220012000
India’s Outbound FDI, 2000–2017, US$ billions
0.51
1.40
1.68
1.88
2.18
14.28
17.23
21.14
16.06
15.95
12.46
8.49
1.68
11.78
7.57
5.07
11.30
2.99
Source: UNCTAD World Investment Report 2017 Annex Tables
exhibit 15
Aside from a dip in 2016, FDI from India to the US grew steadily between
2010 and 2017.
0
$5
$10
201720162015201420132012201120102009200820072006200520042003200220012000
India’s Outbound FDI to the United States, 2000–2017, US$ billions
0.10
0.26
0.23
0.35
0.63
1.50
1.44
1.67
2.82
2.56
4.10
5.32
5.96
7.66
8.93
9.54
8.81
9.82
Source: BEA data compiled by Statista
■ Campbell-based scale-up computing and big data
resource architecture company TidalScale, which
received an initial Infosys Innovation Fund investment
of $1.5 million in 2016 followed by a second
investment of $1.5 million in September 2018;
70
and
■ San Francisco business process platform company
Tradeshift, which received an undisclosed investment
amount from the venture arm of Wipro when it
partnered with Tradeshift in early 2017 to offer
cloud-based supply chain solutions.
71
SPOTLIGHT
Trade Opportunities: Follow the Money
The US and India, with $142.1 billion in two-way goods
and services trade in 2018,
1
are still well short of the
policy goal of $500 billion in trade set by the two
governments in 2014.
2
But pent-up demand in many
parts of the economy holds promise for significant
trade growth in coming years. A few examples follow.
Agriculture
In 2016, McKinsey Global Institute analysts predicted
that India’s middle class would triple to 89 million
households by 2025.
3
Younger Indian households want
convenience, fresher and healthier food, and a more
diverse diet. But India’s food supply chain is strained.
Most of the market is farm to table, with modern
supermarket penetration at 3% of food sales.
4
Adoption
of processed food to extend shelf life is relatively
low;
5
cold storage is in short supply, is concentrated
in only four affluent states, and is mostly suitable only
to store potatoes, a commodity that produces 20% of
agricultural revenue; 30–40% of fruits and vegetables
are wasted, mainly due to lack of post-harvesting
facilities and cold storage;
6
and 20% of food grains are
lost due to inefficient supply chain management.
7
Opportunity Sectors for US Exports to India
Higher-value processed foods such as chocolate,
wine and distilled spirits, and dried or preserved
fruit; food freezing, drying and packaging
technology and equipment; cold storage equipment
and systems; food and retail logistics services.
Healthcare
India’s healthcare sector—hospitals, medical devices,
clinical trials, outsourcing, telemedicine, medical
tourism, health insurance, and medical equipment—
isforecast to grow from $160 billion in 2017 to $370
billion by 2022. Demand is being driven by 100 million
elderly patients, rising incomes, higher incidences of
lifestyle diseases, and expanded access to insurance.
Hospital chains and private equity investment are
fueling rapid growth in healthcare facilities, diagnostic
and pathology labs, and the health insurance sector.
More than 80% of the $86 billion healthcare investment
needed by 2025 is likely to come from the private
sector.
8
India imports about 80% of the medical devices
it requires, and a quarter of that comes from US firms.
9
Opportunity Sectors for US Exports to India
Medical devices/instruments; diagnostic equipment/
supplies; hospital and clinic equipment/supplies;
medical records/remote monitoring and treatment
IT; hospital/clinic engineering and construction
services; insurance.
Energy
Economic growth and rising living standards are driving
higher energy demand. With a total installed capacity
of 344,000 MW,
10
India is pursuing an “all of the above”
energy strategy, with nearly 300 global and domestic
companies committed to generate 266 GW of solar,
wind, hydro, and biomass-based power over the next 5
to 10 years, a $310–350 billion investment.
11
Soon after
coming to power in 2014, Prime Minister Narendra
Modi launched a plan to bring electricity to all Indian
households by December 2018; as of September 2017,
the target was to electrify nearly 40 million homes,
but success has been slow in coming. A December 31,
2018 government press release said that electricity
connections had been brought to 23.9 million
households across 25 states. Once full electrification is
achieved, the next goal will be to ensure reliable 24/7
power to all households without brown-outs.
12
Opportunity Sectors for US Exports to India
Power generation equipment and components;
grid transmission and distribution equipment
and IT; renewable energy products and services;
demand-side management services and supplies;
energy-efficient appliances, materials, and building
design methods and materials; advanced battery
systems; LED lighting and components.
Smart Cities
The Smart Cities Mission launched in June 2015 identified
100 applicant cities from all states to develop designated
areas for “smart city” development.
13
As of mid 2017,
$20 billion in investment had been proposed by 59 cities
under their project plans, and 2,313 projects worth
$14.48 billion were in various stages of implementation
in 49 cities that had submitted project level details.
14
Among the projects covered by the Smart Cities Mission
are affordable housing, integrated multi-modal transport,
traffic management, creation and preservation of open
spaces, water and waste treatment, digital payment
systems using smart debit cards, and command-and-
control centers integrating and overseeing functions
such as Wi-Fi hotspots, GPS-enabled garbage trucks, and
environmental and flood censors.
15
Opportunity Sectors for US Exports to India
Urban planning/architecture/construction services;
smart grid equipment/installation; water and waste
treatment systems; digital banking and payments;
smart roadway materials and components;
landscaping design services; data network equipment/
management; biometric scanning technology.
29
3
The Bay Area Indian Community:
A Cross-Border Success Story
For more than a century, Indian
immigrants have created opportunity
and wealth in Northern California.
The first recorded Indian immigrants arrived in Northern
California in the late 1800s. Most were Punjabi Sikh
volunteers under British colonial rule, sent to Canada as
soldiers and police officers. They left India for greener
pastures, only to find harsh winters and discrimination
in British Columbia. With rumors of better paying work
with the lumber mills and railroads in California, they
drifted south, many settling in the Sacramento Valley
asfarmers.
More Punjabis began arriving by ship in San Francisco
in 1899, either from India directly (via Kolkata) or from
Hong Kong. Nearly all were men looking for work;
average laborer wages in California were $2 a day, ten
times what they’d earned back home. By 1910, the US
census statistics on the foreign-born population recorded
4,664 persons born in India.
1
By 1920, Indian immigrants
owned 2,099 acres and leased another 86,340 mainly
in the Sacramento, San Joaquin, and Imperial Valleys,
growing peaches, grapes, pears, almonds, beans,
potatoes, celery, asparagus, and lettuce.
2
Indian engineering, medicine, and agriculture students
also came to the West Coast in the early 1900s,
attending mainly the University of California, Berkeley
and Stanford University. Again, nearly all were men;
women were sent to Britain for their education. A
Sikh religious organization, the Pacific Coast Khalsa
Diwan, established a hostel in Berkeley where Indian
students could stay for free; in 1912, California potato
farmer Jawala Singh funded the Govind Singh Sahib
Educational Scholarship to educate deserving Indian
students abroad.
3
Nationalist sentiment among
Bay Area Punjabi immigrants and students led to
formation of the Pacific Coast Hindustani Association,
later called the Gadar Party, by Stanford philosophy
lecturer Har Dayal.
4
As with immigration from other parts of Asia, the
path to the United States has at times been blocked.
After the war, the 1917 Immigration Act and 1924
Oriental Exclusion Act together put sharp restrictions
on Indian immigration to the US. Passage of the
1946 Luce-Celler Act finally created a path to
immigration and naturalization for up to 100 Indian
immigrants annually; the 1965 Hart-Celler Act lifted
country quotas entirely and reopened the US to non-
European immigrants. Significantly, Hart-Celler also
encouraged visas for immigrants with special skills
such as scientists and engineers.
5
30
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
A New Wave of Immigrants
Indian immigration began to increase substantially
starting in 1966. First, Punjabi entrepreneurs arrived
as farmers and laborers but eventually formed small
businesses as truck and taxi drivers. Alongside the
Punjabis, Gujarati traders also arrived, carving a niche
as restaurant owners, hotel owners, and apartment
managers. The latter became known as “patels”, a
term for the record keepers appointed by rulers in
ancient India to track crops and receipts for each parcel
of land or “pat.”
6
A nationwide trade association for
patels, the Asian American Hotel Owners’ Association
(AAHOA) was formed in 1989 for Indian hotel owners
and operators who faced discrimination in obtaining
financing and insurance. Today it represents owners of
26,000 hotels—2.5 million rooms—nationwide,
7
nearly
half of all US properties.
A second track of Indian immigrants included aerospace
and defense engineers in the 1970s, followed by IT
software engineers and programmers arriving in the
1980s at the height of airline, telecommunications, and
financial services deregulation. Scientists, engineers,
programmers and newly arriving students gravitated to
Silicon Valley. Early research by UC Berkeley professor
AnnaLee Saxenian showed that in 1990, 21% (12,237)
of the scientists and engineers in the Silicon Valley
workforce were Asian-born, and of that group, 23%
were Indian. Of the total 28,520 Indians in the region’s
workforce, 32% held advanced degrees (compared
to 11% for the white population), and the educational
attainment level was even greater in the high
technology portion of the workforce, with 55% of the
Indian tech workers holding a master’s degree or PhD
(compared to 18% of the white tech workers).
8
According to Saxenian’s estimates, by 1998 at the
height of the first tech boom, 774 Silicon Valley tech
firms employing 16,598 workers, with a combined
$3.6 billion in annual sales, had an Indian CEO.
9
An
emerging commercial internet and corporate Y2K fears
drew thousands of new programmers and students to
the Bay Area. Later research by Saxenian and Vivek
Wadhwa at Duke University showed that between 1995
and 2005, entrepreneurs of Indian ancestry were key
founders of 15.5% of all Silicon Valley startups, and
that of the engineering and technology companies
founded by Indian immigrants nationwide, 26%
were located in California. Of those companies, 90%
were in two industry fields: software and innovation/
manufacturing-related industries. Indian immigrants
filed more than 10,000 patent applications over
1998–2006, mainly related to electrical engineering,
chemistry, physics, agriculture, and ”human
necessities” such as agriculture, food, apparel, and
medical and life-saving innovations.
10
According to a National Foundation on Immigration
Policy analysis of the 91 US startup companies valued
at a billion dollars or more as of October 2018, 50 had
immigrant founders. India ranks number three out of
the 25 countries of origin for those immigrant founders;
with 8 founders, India placed just behind Canada and
Israel (each with 9) and ahead of the UK (7), China
(6), and Germany (4). Indian founders of Bay Area
billion-dollar companies include Bipul Sinha, Arvind
Nithrakashyap, Soham Mazumdar and Arvind Jain (of
Palo Alto cloud storage company Rubrik), and Laks Srini
(of San Francisco based HR and benefits management
company Zenefits). Other billion-dollar companies
founded by Indians that are no longer startups but
have either been acquired or have had IPOs, include
application performance company AppDynamics (Jyoti
Bansai), battery power company Bloom Energy (K.R.
Sridhar), cloud platform Jasper (Jahangir Mohammed),
and enterprise data software center solutions provider
Nutanix (Dheeraj Pandey, Ajeet Singh, and Mohit Aron).
11
The number of Indian immigrants nationwide roughly
doubled every decade over 1980–2010 and, by 2015,
the latest year for which data is available, was about
2.4 million, making India the second largest source of
immigrants to the US after Mexico, according to a 2017
report by the Migration Policy Institute (MPI).
12
The Community Today
California is the leading destination state for Indian
immigrants, home to 20% of the nationwide total. The
US Census Bureau’s American Community Survey (ACS)
1-Year Estimates for 2017 (the latest estimate available)
place the population of Indian descent in California at
506,971—about 1.3% of the state’s total population—up
from 477,330 in 2007.
13
For the 8 Metropolitan Statistical
Areas (MSAs) that fall within the combined Sacramento,
31
The Bay Area Indian Community: A Cross-Border Success Story
exhibit 16
The Indian immigrant population in the Bay Area (238,000) is the second
largest among US metropolitan areas, exceeded only by New York (357,000).
© 2019 Mapbox © OpenStreetMap
© Mapbox © OSM
Estimated Indian Immigrant Population in the US by Metropolitan Statistical Area (MSA), 2013–2017
Select Country/Region of Origin
Share of Total MSA Population
0.2%
6.0%
--- India
Migration Policy Institute (MPI) Data Hub
http://migrationpolicy.org/programs/data-hub
Note: Population estimates include naturalized citizens, lawful permanent residents (LPRs), certain legal non-immigrants (e.g. persons on student
or work visas), those admitted under refugee or asylee status, and persons illegally residing in the US. Estimates for MSAs with an immigrant
population under 2,000 are not provided due to insufficient sample size. Rankings apply only to MSAs with immigrant populations over 2,000.
Source: Migration Policy Institute tabulation from the US Census Bureau’s pooled 2013–2017 American Community Survey
San Francisco Bay, Monterey Bay and Northern
San Joaquin Valley areas (the Northern California
Megaregion) the ACS estimate of the Indian immigrant
population totaled 293,000 for the period from 2013 to
2017. The largest Indian immigrant communities were
in the San Francisco-Oakland-Hayward and San Jose-
Sunnyvale-Santa Clara MSAs, at 119,000 each, but there
were significant populations in the Sacramento Area
(33,000) and the Northern San Joaquin Valley (19,000).
14
English language proficiency is high. According to the
Census Bureau’s 2015 American Community Survey, only
26% of Indian immigrants reported limited proficiency,
compared to 49% for the total US immigrant population.
32
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
The median age of Indian immigrants was 39 years,
younger than the average for immigrants overall (44
years) but older than the native population (36 years);
82% of Indian immigrants were of working age (18–64)
versus 80% for all immigrants and 60% for US natives.
15
Compared to immigrants overall, those from India tend
to be professional and educated. In 2015, 73% of Indian
immigrants were likely to be employed in management,
business, science, and arts occupations, compared
to 31% for all immigrants and 38% for US natives.
Median household income for Indian immigrants
wasmuch higher ($107,000) than the income medians
for the overall foreign- and native-born populations
($51,000 and $56,000, respectively). The ACA 2015
results indicated that 77% of Indian immigrants held
a bachelor’s degree or higher, versus 29% of all
immigrants and 31% of US natives. The difference
reflects the high proportion of Indian immigrants
coming to the US as university students or H-1B
workersin jobs requiring a university degree.
16
According to the International Institute of Education
(IIE)’s annual Open Doors report, 196,271 students from
India were enrolled in US higher education institutions in
the 2017–18 academic year, up 5.4% from the previous
year. In the two prior years, 2015–16 and 2016–17,
student numbers grew from the previous year by 24.9%
and 12.3% respectively. Indian students now represent
17.9% of the more than 1 million foreign students
enrolled, second only to China’s 33.2%. Principal fields
of study are engineering (35.4%); computer science
and math (37.5%); business and management (9.8%);
and physical/life sciences (5.5%). Graduate students
make up 48.7% of the total.
17
The National Science
Foundation’s Survey of Earned Doctorates found that
between 2012 and 2015, 86.5% of US science and
engineering doctorate recipients from India reported
plans to stay on and work in the US.
18
Indian students studying STEM disciplines in the US lead
all other countries in their participation in the Optional
Practical Training (OPT) program, which allows foreign
students to remain in the United States to work for one
year as trainees after they obtain their degrees or two
years if the degree is in a STEM field. In fiscal year 2017,
Indians accounted for 50,507 STEM-OPT authorizations,
more than half (56%) of the total, ahead of China which
accounted for 21,705 (24%).
19
There is reason to be concerned, however, about
whether this highly positive inflow will be sustained.
Despite a higher cumulative number of Indian students
continuing and extending their education in the US in
2017, the Open Doors report issued in November of
that year reports a falloff in F-1 visas received by Indian
students: 62,537 received in 2016, down 16.43% from
the previous year.
20
A 2017 survey of 250 US colleges and
universities by six education groups, including IIE and
the American Association of Collegiate Registrars and
Admissions Officers, reported 26% fewer undergraduate
F-1 visa applications from India and 15% fewer graduate
applications. These trends were attributed to financial
difficulties owing to demonetization, but also to concern
over potential changes in H-1B visa policies, and a
perceived rise in hate crimes in the US following the
death of Indian engineer Srinivas Kuchibhotla at a bar in
Kansas in February 2017.
21
The decline in foreign student enrollment in the US is
not limited to Indian students; a quarter of responding
universities saw fewer Chinese student applications, and
32% reported fewer graduates applying. Applications
from the Middle East were down 39% for undergraduates
and 35% for graduates. Among the reasons given: a
perceived rise in student visa denials at US embassies
and consulates in China, India, and Nepal; a sense that
the US is now less welcoming to individuals from other
countries; uncertainty over changing visa benefits and
restrictions, especially around job opportunities and
the ability to travel and re-enter the US after travel; and
concerns that the White House travel ban might be
expanded to include additional countries.
22
As of 2017, Bay Area universities have not so far
experienced a similar drop, possibly due to the Bay
Area’s sizable Indian community; the region’s image of
openness and tolerance; the reputation of its universities;
its relative quality of life; and the continued presence of
considerable numbers of job opportunities in the region,
particularly in the technology sector.
Open Doors shows some 20,000 Indian students
attending California colleges and universities in 2018,
33
The Bay Area Indian Community: A Cross-Border Success Story
12.4% of all foreign students in the state.
23
UC Berkeley
is the leading Northern California host institution, with
572 students from India enrolled in the fall of 2017.
24
Other leading Bay Area institutions hosting Indian
students, included Stanford (459),
25
UC Davis (404),
26
and San Francisco State University (178).
27
Fields of
study are consistent with national trends.
University Ties
Major Bay Area universities enjoy deep, longstanding
relationships with India and with a vibrant Indo-
American community. Among them are the following.
UC Berkeley
An Institute for South Asian Studies (ISAS) and, within
it, the Berkeley India Initiative (BII), were launched
in 2007 to foster research on India’s economy and
global links, especially in high-technology; to identify
policies to expand economic opportunity and mitigate
poverty and wealth inequality; and to examine issues
of governance in the world’s largest democracy. BII
serves as a focal point for cross-disciplinary programs
at Berkeley, including
■ a 2017 two-day Berkeley India Conference, organized
as a student initiative in partnership with ISAS,
the Institute of International Studies, and Ashoka
University, and focused on critical issues associated
with the future of youth, in particular addressing
poverty alleviation;
28
■ the Sarah Kailath Chair of India Studies and Memorial
Lecture series, highlighting influential Indian women,
such as film director Mira Nair, Infosys chair Sudha
Murthy, and former Indian Ambassador to the US
Nirupama Rao;
■ a medical technology accelerator launched in
Bengaluru (also known as Bangalore) with Indian
incubator IKP Eden to encourage scalable low-cost
medical solutions for rural India and a “smart cities”
challenge for the city of Allahabad by the Berkeley
Innovation Acceleration Group (IAG) and USISPF—
both led by IAG international development director
and former Intel executive Manav Subodh;
■ the Berkeley-India Joint Leadership on Energy and
the Environment (BIJLEE) initiative, formed in 2008 by
the College of Engineering and the US Department
of Energy’s Lawrence Berkeley Lab, which led to
participation in US DOE energy efficiency and
demand-side conservation programs in India;
■ the Berkeley Executive Program in Management,
a one-year program from Berkeley-Haas School
of Business and India-based Northwest Executive
Education, aimed at senior executives, with modular
courses in India, Silicon Valley, and online, covering
leadership, innovation, strategy, and product
management and communications; and
■ the US-India Conference, an annual event that, in
addition to ISAS, has included among its sponsors
the All-India Management Association (AIMA), the
Garwood Center for Corporate Innovation, TiE Silicon
Valley, and Hero Enterprise and aims to disseminate
current research on key policy issues to academic,
policy, and public audiences in the US and India;
attended by Berkeley’s Chancellor and US and Indian
business leaders and academics, the forum addresses
a wide range of issues in technology, Indian
government policy, entrepreneurship, and US-India
relations, and featured India’s Finance Minister Arun
Jaitley as keynote speaker in 2017.
29
Stanford University
Stanford’s Center for South Asia provides a central
forum for research, teaching and events related to
SouthAsia. Within the university’s departments
■ the Stanford King Center on Global Development
(formerly known as the Stanford Center on Global
Poverty and Development) teamed with academics, a
management consultant, and 17 textile manufacturers
in Tarapur in a multi-year initiative to introduce and
track management best practices that improved
factory conditions;
■ Stanford Seed, an initiative of the Stanford
Graduate School of Business (GSB), in 2017
established a training center in Chennai for a
year-long, immersive leadership program to help
founders and leaders of small and medium-sized
enterprises scale their companies;
34
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
■ Stanford Ignite Bangalore was launched in 2013
at the Infosys Bangalore campus, as a nine-week
certificate program for non-professionals, with local
and online instruction to promote entrepreneurship;
■ the Stanford-India Biodesign fellowship program,
begun in 2007 in collaboration with the All-India
Institute of Medical Sciences and the Indian Institute
of Technology (IIT) Delhi, trains medtech fellows in
India and at Stanford in biodesign from concept to
prototype to market;
30
and
■ India’s Ministry of Human Resource Development
engaged Stanford and the All-India Council for
Technical Education (AICTE) in 2016 to design and
administer a test to measure learning outcomes
of engineering students at India’s 3,000 registered
technical institutes.
UC San Francisco
UCSF, a graduate school in medicine and life sciences
and a leading teaching hospital facility, has been active
in India for more than a decade.
■ UCSF’s Francis I. Proctor Foundation for Research
in Ophthalmology has a longstanding relationship
with the Aravind Eye Care System, contributing to
research and treatment for corneal ulcers, cataracts
and glaucoma.
■ UCSF, through the UC Global Health Institute,
has partnered with St. John’s Research Institute in
Bengaluru to study mental illness among patients
with dual diagnoses of heart disease and diabetes,
and with the Public Health Research Institute of India
on issues involving HIV and women’s health.
■ The School of Medicine’s Ob-Gyn Department
is working with CARE India on a mentor training
program for midwives in Bihar state.
■ A $1.5 million grant from the Bill and Melinda
Gates Foundation funded UCSF and UC Berkeley
researchers in Madhya Pradesh and Bihar, to evaluate
mobile health education and intervention apps that
social workers use to deliver health and nutrition
services to mothers with young children.
exhibit 17
UC Berkeley is the leading Northern California host institution for Indian
students studying in California.
Number of Indian Students at Major Bay Area Universities, 2011–2017
0
100
200
300
400
500
600
San Francisco State University
UC Davis
UC Berkeley
Stanford University
2017201620152014201320122011
459
572
404
178
390
396
82
120
Source: Stanford University, College Factual, San Francisco State University Graph: Bay Area Council Economic Institute
35
The Bay Area Indian Community: A Cross-Border Success Story
UC Davis
A large Northern California Indo-American farming
community dating back to the 1800s has drawn
Indian students to UC Davis with diverse cross-border
programs such as
■ Feed the Future, a US government global hunger
and food security initiative, which hosts an innovation
lab at UC Davis focusing on managing risk for India’s
farmers through financial initiatives, including crop
insurance, links to spot and futures markets, and
commodity exchanges;
31
■ the Energy Efficiency Institute (EEI) at Davis, which
registered a non-profit “sister center” in 2016
with the state government of Andhra Pradesh
and has hosted a summer academy in India for
underprivileged college students and a three-day
sustainability workshop for Indian non-profits in the
city of Visakhapatnam;
32
■ a collaboration between the UC Davis School of Law
and Jindal Global Law School, which jointly hosted
a December 2017 conference on law, institutions,
and justice in Sonipat, Haryana; the two schools
have cooperated since 2012 on faculty and student
exchanges, faculty collaborations, joint research, and
publications; and
■ participation by UC Davis, along with UC Berkeley
and UC Santa Cruz, in the Tata Social Internship
Program, an eight-week upper-division internship
in which international students join Tata Group’s
community development teams working on economic
and social empowerment in areas surrounding Tata’s
India operating units.
It is important to understand the dynamics that lie
behind demand from Indian students to continue their
education in the Bay Area and both the direct and
indirect benefits that accrue to Bay Area universities as
well as to the regional economy.
With the exception of elite technical and management
schools—established under British colonial rule to train
civil servants and engineers to run basic state-owned
industries—India’s education system has a long way to
go in attaining world-class status. The government has
committed to universal education; more pupils are in
primary and secondary education than ever, and literacy
rates grew from 52% in 1991 to 74% in 2011.
33
Beyond
the basics, however, education quality is lacking, beset
by entrenched unions and corruption in teacher hiring
and testing; unprepared students automatically moving
on to the next grade without remedial education
being available; outdated curriculums; and inadequate
support for alternative private schools.
At the university level, the elite institutions—IIT (the
Indian Institutes of Technology), IISc (the Indian
Institute of Science) and IIM (the Indian Institutes
of Management)—provide a very small number of
enrollment opportunities relative to India’s large student
population, and graduates still find few good options for
continuing with advanced study in India. US universities
are viewed as among the world’s best, rigorous yet
flexible, and creative in their approach to learning. Bay
Area universities are viewed as the gold standard in terms
of science, technology, engineering, and mathematics
(STEM) education, and also enjoy strong appeal with their
proximity to Silicon Valley, San Francisco, and East Bay
technology and life sciences clusters.
Indian students from the elite technical universities come
especially well-prepared to Bay Area graduate schools.
They enjoy high rates of master’s and PhD completion,
success in finding work with established companies or
founding new ones, and high numbers of STEM patents
filed. Most are self-funded or family-funded while at
university; IIE data suggests they spent a cumulative
$752 million in California during 2017 on tuition and
living expenses. Many Indian alumni also give back
through endowments of facilities, initiatives, fellowships
and scholarships, and as business contacts and mentors.
The result is a virtuous circle of innovation and prosperity
spread throughout the regional economy.
Academic Leadership: Giving Back to India
While this feeds the Indian diaspora in the Bay Area, a
number of long-established and successful Indian leaders
in the region are giving back to India by supporting the
development of new, private universities that promise
to deliver a higher level of educational opportunity
with more innovation than is currently available in India,
where curricula tend to be crowded and rigid, and
entrepreneurial support is likely to be limited.
36
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
Bay Area Indian leaders were instrumental in forming
the 1997 academic alliance that launched the highly
ranked Indian School of Business in Hyderabad in
2001, followed several years later by the opening of a
second campus in Mohali.
34
Bay Area leaders, including Prasant Mohapatra, Vice
Chancellor for Research at UC Davis, and former UC
Berkeley Chancellor Nicholas Dirks, serve on the Board
of Governors of the Chennai-based SRM Institute
of Science and Technology (formerly known as SRM
University), now one of the top ranking universities
in India, and were advisors on its expansion to a new
campus in Amaravati, the capital of Andhra Pradesh and
one of India’s leading technology centers.
While SRM is technically focused, another new private
school, Ashoka University, is more focused on the
liberal arts. Anita Manwani and Arjun Bhagat are
founding trustees along with other prominent Indian
business leaders in the US and India. Land was acquired
and infrastructure developed for an undergraduate
campus outside of Delhi, which is now expanding from
an initial 20 acres to 50. Ashoka’s primary focus is to
ensure that the next generation of India’s leaders has
the critical thinking skills and curiosity that is developed
in liberal arts teaching in the US. As Manwani puts
it, “We want the next generation of government
leaders to be aware of the downstream effects of
their decisions—economic, social, and cultural. For
example, if you’re building a dam, is it just about the
engineering, or are you also thinking about the impact
on the local community and the ecosystem? This kind
of instruction—which promotes critical thinking and a
multidisciplinary approach to problem solving—isn’t
typically available in India.”
The university’s faculty is international. Its student
body currently totals 1,600, aiming eventually for
3,700, and is enrolled in undergraduate, graduate, and
PhD degree programs in arts as well as pure sciences
(computer science, physics, math, etc.), including
inter-disciplinary majors. It also offers a one-year post-
graduate Young India Fellows program to train students
to become socially committed leaders of change.
Ashoka has student and faculty exchange programs
with leading universities in the US, Europe, and Asia.
Recent graduates are employed in tech, consulting and
research, pharma, and NGOs.
35
Business Networks
A vibrant community of immigrant professionals,
students, technology entrepreneurs, and investors has
contributed to a rich, unique set of cultural and business
networks in the Bay Area, most notably in Silicon Valley.
Cultural and benevolent associations offer Punjabi,
Gujarati, Marathi, Tamil, Rajasthani, Sindhi, Telugu
and other arrivals social support and a connection
to home. Over decades, the Bay Area has embraced
Indian culture—from traditional Indian classical music
taught at the Ali Akbar College of Music founded
by renowned sarodist Ali Akbar Khan in 1967; to
one of the largest collections of South Asian art in
the US at San Francisco’s Asian Art Museum; to the
film restoration work and scholarship at the Satyajit
Ray Film and Study Collection at UC Santa Cruz; to
widely-attended Bay Area celebrations of Diwali, the
Rajasthani Holi Festival of Colors, and the Ratha Yatra
Festival of Chariots in San Francisco’s Golden Gate
Park; as well as sold-out Indian pop music concerts;
popular high-end restaurants such as Amber; Michelin-
star Indian restaurants Taj Campton Place in San
Francisco and RASA in Burlingame; and classes in
traditional dance, yoga, and meditation.
By the late 1980s, a unique set of Indian professional
networks was taking shape in Silicon Valley. Graduates
of the elite Indian technical institutes, mainly data
network engineers and software programmers,
were in sudden demand by large US corporations
beginning to digitize business processes and work
flows to improve productivity. Airlines, banks, insurers,
and healthcare providers saw huge opportunities
for leaner operation, reduction of paperwork, and
improvement of customer service and regulatory
compliance. Tech firms in Silicon Valley were eager
to help, but ran up against a shortage of skilled IT
workers. Having engineers do that work remotely in
India was no longer adequate to meet demand, so
graduates were brought over to work, most on H-1B
visas, and to continue their post-graduate educations
on F-1 and J-1 visas.
37
The Bay Area Indian Community: A Cross-Border Success Story
Indian IT workers quickly became embedded within
large US multinationals and at major Silicon Valley
enterprise network integration, chip design, and
software service firms. Some were hired and sponsored
directly, while others came through Indian contract
employers such as Infosys, Wipro, Cognizant, and Tata
Consultancy Services (TCS). Ambitious post-graduate
students and mid-level engineers and programmers
stayed on in the Valley to found startups and later
become investors. An entrepreneur/investor/mentor
ecosystem formed to accelerate the process.
Supporting that community, a weekly print and online
newspaper based in San Leandro, India-West, was
established in 1975 by Stanford graduates Ramesh
and Bina Murarka. The paper offers a mix of news
from India and about the local and national diaspora,
including coverage of Indian-American tech companies
and entrepreneurs in Silicon Valley, and has won 50
journalism awards during its last 40 years of operation.
36
Also in the region, city-to-city ties are supported by
organizations such as the San Francisco-Bangalore
Sister City Initiative.
Early business associations included the Silicon Valley
Indian Professionals Association (SIPA) and Indian
Business & Professional Women (IBPW), launched
in 1987 and 1994, respectively. Industry-specific
associations followed, for professionals in law, life
sciences, venture capital, and other fields. But the
largest, most influential business organization, which is
still active today, is The Indus Entrepreneurs (TiE).
TiE was formed in 1992 in Silicon Valley by a core group
of 20 Indian tech professionals—among them Cirrus
Logic founder Suhas Patil; Sun Microsystems co-founder
and venture investor Vinod Khosla; Kailash Joshi, who
set up IBM India and the IBM-Tata joint venture in
the early 1990s; former McKinsey senior partner Rajat
Gupta; and Hotmail co-founder Sabeer Bhatia. Over
time, TiE has expanded worldwide, with 61 chapters in
14 countries, and with 12,000 general and 3,000 charter
members
37
(experienced entrepreneurs and senior,
established executives recruited by invitation only). It
has broadened its membership over time to embrace
entrepreneurs of many nationalities in many fields,
although the Silicon Valley chapter remains largely
Indian and tech-focused.
The group’s primary mission is to nurture entrepreneurial
startups from incubation through late-stage financing
and development within an ecosystem of collaborators,
mentors, and investors. Its 2018 TiE Inflect annual
conference drew 5,400 attendees to Santa Clara over
two days in May. While TiE remains a pillar of the
Bay Area Indian business community, particularly for
entrepreneurs, the community’s leadership has matured
and is now more broadly distributed, as Indian business
leaders such as Google CEO Sunder Pichai have risen to
prominence and independently assumed national and
global roles.
Indiaspora is an organization formed in 2012 to raise
the Indian-American community’s profile, that has
since grown to include the global diaspora. It partners
with government to create stronger ties with diaspora
populations, as well as the private sector and NGOs, to
create more effective philanthropy and promote giving
within the diaspora community.
38
Software executive and Sand Hill Group angel investor
M.R. Rangaswami, who founded Indiaspora, draws
support from prominent thought leaders such as
KMPG India Chairman & CEO and former US Assistant
Secretary of Commerce Arun Kumar and others in the
Bay Area, including Sumir Chadha, co-founder of India-
focused investment firm WestBridge Capital; angel
investor Asha Jadeja Motwani; Anand Rajaraman, a tech
entrepreneur and co-founder of Junglee Corp., which
pioneered internet price comparison shopping; Jyoti
Bansal, founder of AppDynamics, which was acquired by
Cisco for $3.7 billion in 2017; and Vab Goel, founder of
venture capital firm NTT.
Rangaswami says Indiaspora, influenced by Jewish
community organizations and the Chinese Committee
of 100, grew out of a nationwide Indian community
that had expanded and matured over years. “We asked
ourselves,” he explains, “If the Indian community is
so successful, why isn’t it more politically and socially
active; if we’re one percent of the population, why
aren’t we one percent of the membership in Congress?”
The answer was the lack of a unifying organizational
38
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
infrastructure. “We had the various cultural
organizations, we had associations for doctors, lawyers,
and tech, yet nobody talked to one another. We needed
a catalyst.”
Early achievements included the 2013 Indiaspora
Inaugural Ball in Washington honoring President Obama,
which was attended by 1,300 Indian Americans from
across the country. The Obama administration, having
already hired dozens of Indian Americans into senior
positions, hosted newly-elected Prime Minister Modi at
the White House. After a 2015 Modi visit to Silicon Valley
attracted 20,000 people to a stadium reception in San
Jose, momentum increased, and in 2016 the community
helped elect Ro Khanna to the 17th District (Santa Clara-
Fremont) House Seat and former California Attorney
General Kamala Harris to the Senate.
Indiaspora hosted another gala in 2017 in Washington,
DC, to celebrate the milestone of achieving one percent
representation of Indian Americans in the US Congress;
worked with the Modi government to promote
a US-India-Israel “Tech Triangle”; partnered with
NASSCOM to bring a delegation of business leaders to
New Delhi in January 2018; organized delegations of
Indian American business leaders to Israel and Canada,
including a trip to London in July 2019; and hosted
a Philanthropy Summit in Washington, DC, as well as
dinners with United Nations Ambassador Nikki Haley
and Nobel Laureate Kailash Satyarthi. A 2018 Indiaspora
report found that people of Indian origin have donated
$1.2 billion to US institutes of higher learning since 2000.
Rangaswami says ties between India and the Bay Area
are as strong as ever. H-1B visa numbers here have
not dropped off as in other parts of the US; business
travel and tourism have shown no letup; and Silicon
Valley venture capital firms have launched India-
based, India-focused funds—a trend that is expected
to increase.
The difference today from a decade ago, he maintains,
is that the business community has matured to the point
that networks of alumni, angel investors, accelerators,
mentors, and VCs are well-established, and a critical
mass of firms in Silicon Valley and beyond have Indian
founders and senior management.
39
Two national business organizations, the US-India
Business Council (USIBC) and the US-India Strategic
Partnership Forum (USISPF) also have a strong
presence in the region.
39
4
Indian States: Laboratories of Innovation
India’s diverse states enjoy
considerable autonomy and have
distinct business environments. Many
are embarking on initiatives and
reforms—around digitization, energy,
and entrepreneurship—that support
and parallel the national government’s.
As a large and diverse nation with 29 states, India
presents opportunities that should be understood not
just at the national level but at the state level as well.
The largest states have populations at the scale of
countries (e.g., Uttar Pradesh 199.6 million, Maharashtra
112.4 million, Madhya Pradesh 72.6 million, Tamil
Nadu 72.1 million, Gujarat 60.4 million),
1
and while
city governments are comparatively weak, state
governments can be powerful. As in the US, states also
serve as laboratories for experimentation. Reflecting
this and India’s complex political landscape, the Modi
government has looked to like-minded states as
partners in implementing national reforms, promoting a
race to the top through “competitive federalism.”
While reform is afoot across India, not all states have
industries or policies that align closely with the priorities
that drive California and the Bay Area. With respect to
technology, innovation, energy, entrepreneurship, and
climates supportive of business, some stand out.
States are setting ambitious energy market goals.
Gujarat was the first state to make significant changes
in this area, taking advantage of the advent ten years
ago of the National Solar Mission. Today, Karnataka,
Telangana, Madhya Pradesh, Rajasthan and Haryana are
also moving fastest on energy market reforms, through
measures designed to expand the use of renewable
energy, reduce power theft, increase tariff collection,
and engage private partners in electricity distribution.
Karnataka, for example, has taken the lead in having
the most renewable energy capacity installed in the
country. Gujarat is the first state to develop offshore
wind capacity. Haryana, for its part, has approved a
bioenergy policy that aims to attract private investment
sufficient to generate 150 megawatts of power and
support new technology R&D.
2
Technology innovation is being embraced as a way to
stimulate growth and improve services. Karnataka, home
to India’s leading IT hub Bangalore, was an early mover
in IT, while Telangana was an early leader in life sciences.
They have subsequently been joined by Rajasthan,
Kerala, Andhra Pradesh, Odisha, Haryana, and Tripura,
all of which are moving fast on policies to advance
India’s knowledge and innovation economy. Telangana,
for example, has a Rural Technology Policy to establish
one technology center in every district, with each center
40
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 18
Among states enacting positive new initiatives, policies, and reforms to
support entrepreneurs and industry, Maharashtra has taken an early lead.
Andra
Pradesh
Arunachal
Pradesh
Assam
Bihar
Chhattisgarh
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu and
Kashmir
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Odisha
Punjab
Rajasthan
Sikkim
Tamil
Nadu
Telangana
Tripura
Uttarakhand
Uttar Pradesh
West
Bengal
D
ELHI
Fourth Quarter 2017
Darker shades indicate higher
number of reforms.
A
NDAMAN AND
NICOBAR ISLANDS
Source: Center for Strategic and International Studies Visualization: Bay Area Council Economic Institute
able to train 10,000 rural youth.
3
In 2017, Karnataka
launched a fund through its KBITS (biotechnology and IT
services) organization with an initial investment of $1.5
million to support agricultural innovation start-ups,
4
and
also awarded $1.5 million in grants to 26 biotechnology
startups under its Idea to Proof of Concept (Idea2POC)
Grant initiative, which is part of the broader Karnataka
Startup Policy 2015–2020.
5
Land use, which directly impacts economic
development, is being addressed. Reforms governing
land use, an issue that often complicates industrial
growth and larger commercial projects—particularly
where land must be assembled from many smaller
plots—are being actively pursued in Bihar, Chhattisgarh,
Odisha, Maharashtra, Jharkhand, Punjab, Rajasthan,
Haryana, Uttar Pradesh, Tamil Nadu, and Uttarakhand.
41
Indian States: Laboratories of Innovation
Uttar Pradesh and Odisha, for example, have launched
plans to create land banks of 5,000 acres
6
and 120,000
acres,
7
respectively, for allocation to the industrial sector.
This is a complicated area where much remains to be
done, as land use policies are inherently political. An
earlier policy enacted in 2005 to enable land assembly
and provide targeted tax incentives to encourage
development through Special Economic Zones (SEZs)
met with opposition, due to concerns over whether
farmers were being adequately compensated for their
land and whether sub-optimal sites were being chosen
so that well-connected people could benefit from the
sale of land to the government.
Digital initiatives at the state level mirror national
initiatives and cover an array of applications.
■ LED lighting: Reforms are being most actively
pursued in Andhra Pradesh (where, for example,
thegovernment has announced plans to replace
onemillion conventional streetlights in seven districts
with LED lighting
8
) and Odisha (which has announced
plans to replace all conventional streetlights with LED
lighting in all 114 urban local bodies in the state
9
).
■ Digital payments and procurement: Nagaland will
implement digital payments for its rural employment
program, and Maharashtra will likewise allow
beneficiaries of state government programs to have
payments directly credited to their accounts. Six
states (Andhra Pradesh, Arunachal Pradesh, Assam,
Gujarat, Telangana, andUttar Pradesh) will use the
central government’s e-government marketplace
(GeM) to conduct procurements.
10
Telangana has
launched TApp Folio, a mobile application to
provide citizens with a single platform to access
government services and transfer payments.
11
Tamil
Nadu has launched an e-governance policy to
enable government departments to provide all their
services digitally.
12
Uttar Pradesh has announced
an online single-window system to digitally process
applications, fee payments and clearances for
entrepreneurs and business people.
13
■ Digital health: Telangana and Karnataka stand
out for their digital health initiatives. Telangana
will experiment with digital health records, and is
partnering with Microsoft to use cloud-based big
data to improve children’s healthcare screenings.
Karnataka is partnering with Tata Trusts to open a
digital health services hub that will use digitized
records to better track recipient benefits. Uttar
Pradesh is also harnessing digital tools to expand the
state’s healthcare reach by making five telemedicine
clinics available to citizens in areas without easy
access to hospitals.
14
■ Small business support: Gujarat has signed a
memorandum of understanding with Google
to advance its “Digital Gujarat” agenda to train
entrepreneurs and small- and medium-sized businesses
to use digital platforms for business development.
15
Entrepreneurship is actively supported through
state initiatives. States that are active in this area
include Karnataka, Odisha, Uttar Pradesh, Haryana,
Maharashtra, Telangana and Andhra Pradesh.
■ Support for women entrepreneurs: Telangana has
announced the creation of We-Hub, an innovation
hub exclusively for women, backed by a $2.5 million
investment fund. Punjab has unveiled a draft Punjab
Startup Entrepreneurship Development Policy, also
supporting women entrepreneurs, that aims to create
1,000 start-ups over five years and provides funding
for public incubators. Maharashtra has approved an
initiative for women entrepreneurs backed by $100
million in subsidies.
16
■ Support for startups: Rajasthan has launched iStart, a
program to support start-ups by providing business
plan assessments, skill building, mentoring, and
connections to potential investors. Kerala will provide
new incentives for start-ups that make it easier
for private firms and international agencies to set
up incubators and accelerators. Karnataka’s new
biotechnology policy will create funding mechanisms
and mentorship programs to stimulate start-up
activity in the biotechnology sector.
17
Karnataka
has also created a new legal framework to allow
startups innovating new business models to operate
under clear regulations and an initiative promising
$437.50 a month for one year to entrepreneurs who
incubate their ideas in the state’s incubation center.
18
Uttar Pradesh has announced a startup strategy to
both develop IT parks in Tier II cities and develop
42
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 19
Maharashtra, Karnataka, and Uttar Pradesh lead other Indian states in their
respective competitiveness categories.
Institute for Competitiveness Top 10 Rankings of Indian State and Union Territories, 2017 and 2016
Rank 2017 2016 2017 2016 2017 2016
1 Maharashtra Maharashtra Karnataka Karnataka Uttar Pradesh Uttar Pradesh
2 Tamil Nadu Tamil Nadu West Bengal Andhra Pradesh Jammu & Kashmir Manipur
3 Delhi Delhi Arunachal Pradesh Punjab Madhya Pradesh Tripura
4 Kerala Goa Andhra Pradesh West Bengal Manipu r Madhya Pradesh
5 Goa Gujarat Rajasthan Mizoram Assam Jammu & Kashmir
6 Gujarat Kerala T elangana Arunachal Pradesh Tripura Odisha
7 Sikkim Himachal Pradesh Punjab Rajasthan Odisha Bihar
8 Himachal Pradesh Sikkim Mizoram Chhattisgarh Meghalaya Assam
9 Haryana Uttarakhan d Nagaland Nagaland Bihar Meghalaya
10 Uttarakhand Haryana Chhattisgarh Jharkhand Jharkhand
Innovation-Driven States Investment-Driven States Factor-Driven States
Source: Institute for Competitiveness Visualization: Bay Area Council Economic Institute
investment nodes that enable the use of smart
technologies for better city management.
19
The leading Indian think tank Institute for
Competitiveness ranks India’s states and union territories
for overall competitiveness using a broad range of
measures in three categories: Innovation, Investment,
and Factors of Production (including labor, infrastructure,
and capital). In both 2016 and 2017, Maharashtra led the
rankings for Innovation-Driven States, Karnataka was #1
for Investment-Driven States, and Uttar Pradesh topped
the rankings for Factor-Driven States.
20
City Competitiveness
Major cities also concentrate technology and resources
and compete for investment. Companies, capital, and
labor concentrate in cities. Compared to China, where
well under half (42%) of the population lives in rural
areas, India remains predominantly rural, with 66% of
the population living in the countryside according to
2017 data (the latest available) from the World Bank.
21
India is rapidly urbanizing, however, and has the
second largest number of urban dwellers in the world
(450 million) after China (804 million) and ahead of the
United States (267 million).
22
By 2030, the number of
urban residents is expected to grow to 607 million.
23
As already massive cities such as New Delhi, Mumbai,
Kolkata, and Bengaluru (also known as Bangalore) grow,
population has overwhelmed existing infrastructure.
This makes the delivery of basic infrastructure services
a priority. Cities are also looking to differentiate
themselves as technology centers that can attract
both talent and investment. These two dynamics have
often produced a dichotomy in which gleaming tech
campuses line crumbling, overburdened roads and
highways in an environment with often poor air quality.
Both worlds reflect the reality of India’s cities.
Part of the answer to India’s development challenges
lies in the movement of underemployed agricultural
workers from the cities to more productive employment
in larger population centers. Up to now, India has
not succeeded in creating enough urban jobs or the
infrastructure needed to support them. Digitization is
being looked to as an answer.
43
Indian States: Laboratories of Innovation
exhibit 20
Bengaluru has emerged as the most creative city in India, followed closely
by Mumbai and Pune. All three are also among the top cities on the
Creativity Index.
India’s 50 Most Creative Cities
Source: Institute for Competitiveness and Martin Prosperity Institute
44
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
In a 2017 ranking of 50 Indian cities, the Institute for
Competitiveness places the following Tier I cities among
India’s most competitive top ten: #1 Bengaluru (Karnataka),
#2 Mumbai (Maharashtra), #3 Pune (Maharashtra), #4
Chennai (Tamil Nadu), #5 Ahmedabad (Gujarat), #6 Delhi
(Delhi), #7 Hyderabad, (Andhra Pradesh), and #10 Kolkata
(West Bengal). Leading Tier II cities ranking in the top ten
are #8 Nagpur (Maharashtra) and #9 Gurgaon (Haryana).
24
A related Creativity Index—based on technology,
talent and tolerance criteria—shows a wide divergence
between cities, with a large proportion scoring less than
0.5 (meaning there is a low correlation). The top cities
for creativity are Delhi, Hyderabad, Bengaluru, Mumbai,
and Chennai, with other top performers including
Noida, Pune, Kolkata, Kochi and Chandigarh.
25
Factors
considered in the ranking include the number of internet
subscribers, number of wireline subscribers, share of
the population with a computer or laptop with internet,
share of the population with mobile phones, number
of R&D institutions, number of incubators, population
above 25 years old with a graduate degree, and the
number of engineering and MBA graduates. These
Indian cities are home to the Indian operations of most
of the Bay Area’s leading companies, and at present offer
the strongest base in India for the technology industry.
45
5
Innovation, Startups and Investment:
Poised for Breakthrough
India doesn’t yet rank among the
world’s leading economies for
innovation, but its status has been
rising. A young, entrepreneurial
population and a growing domestic
market make India a promising
destination for venture investment.
India has been rising in the World Bank’s Ease of Doing
Business rankings, moving up from 130th place for
2015– 16 to 100th place for 2016–17 and 77th place for
2017–18. Though much ground remains to be covered—
China ranked 46th for 2017–18, up from 78th for the two
preceding years—the Bank rated India among the top
ten countries measured by improved performance for
both the 2016– 17 and 2017–18 periods.
1
Patent filings are another measure of how far India has
come, but also how far it has to go. In 2018, innovators
and research organizations in India filed 2,013 patent
applications with the WIPO (World Intellectual Property
Organization), registering the highest growth of any
country (27%). However, that still places it far below
China’s 53,345 international patent applications in the
same period. The United States filed 56,142.
2
With its young population and a growing and educated
middle class, India is a natural home for entrepreneurs
and a magnet for venture capital. Entrepreneurial
activity has grown rapidly, to the point where India
is now the world’s third largest base for startups
after the United States and China, which have the
world’s largest numbers of startup incubators and
accelerators.
3
The large number of Indians studying at
Bay Area universities, Indians employed in the region’s
technology community, and Indian immigrants who have
founded companies, lead technology companies, or
are technology investors in the region is a testament to
India’s inherent entrepreneurial potential.
India’s innovation and venture environment still falls
short of its potential. The Global Innovation Index
overall score ranks India 57th out of 126 countries
evaluated in its 2018 report. That overall ranking is
the average of sub-index scores that are composed
of rankings for seven individual categories in which
India placed as follows: 80th for Institutions (political
environment, regulatory environment, business
environment); 56th for Human Capital and Research
(education, tertiary education, R&D); 77th for
Infrastructure (ICT, general, ecological); 36th for market
sophistication; 64th for business sophistication; 43rd
for knowledge and technology outputs; and 75th for
creative outputs.
4
Each year since 2011, however, and despite this
variation, India has been ranked by the Global
46
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
innovation Index as an Innovation Achiever relative to
its level of development, moving up in the standings
every year. In addition, India is 12th on the list of the
top twenty countries that account for the highest
combined shares of patents and scientific articles. Two
cities, Bengaluru (#65) and Mumbai (#92) rank in the top
100 urban clusters for patent and scientific publishing
performance. These numbers suggest how far India has
come, and how far it still has to go.
5
Venture Investment
Indian markets, and with them venture investment in
India, can be complex, as culture, religion, and income
levels vary widely and social stratification runs deep. Tier
I or Tier II cities have different market profiles from rural
areas. This raises the question for investors about the
addressable market: Is it the 1% of extremely wealthy
Indians, the growing middle class, or the base of the
pyramid that is barely self-sustaining but is large and
also offers market opportunities? Money can be made
at every level, but it is important to know who you’re
selling to.
In its 2018 report on global metro areas and their tech
companies, CB Insights ranked 25 tech hubs according
to their total number of investment deals between
January 2012 and May 2018. Three Indian cities placed
on the list: Bengaluru (#10), New Delhi (#13), and
Mumbai (#18). The analysis went on to divide the list
into three segments: 6 top cities dubbed Heavyweight
Hubs that had a 670 average deal count during the
2012–2018 period; 10 High Growth Hubs in the mid
range (including Bengaluru and New Delhi) with a 171
average deal count; and 9 remaining Up and Comers
(including Mumbai) with a 75 average deal count.
6
Year-to-year funding has swung widely. CB Insights
reports that Indian tech startups raised a record $10
billion in 2017. Significantly, that flow was dominated
by unicorns (companies valued at more than $1 billion),
with only $206 million going into seed and angel-stage
deals. This is mirrored in the pattern of venture deals
between 2015 and 2017: surges have been driven by
funding going to unicorns while drops in funding have
been driven by less attention to unicorns. When India
reached the record funding level of $10 billion in 2017,
the number of deals dropped by 19.3%.
7
CB Insights
found that as of June 12, 2019, India ranked fourth in
the world for its number of unicorns, with 4% of the
global total at 16, after the UK’s 5% with 19, China’s
25%, and the United States’ 49%.
8
The short list of major investors that has led this charge,
often investing in the same company through multiple
rounds, includes Blume Ventures (Mumbai), Indian Angel
Network (New Delhi), Sequoia Capital India (the India VC
arm of the Bay Area’s Sequoia Capital), and Accel India
(the independent arm of the Bay Area’s Accel).
9
The size
of India’s unicorn club more than tripled between 2014
and 2018, from four to thirteen. New entrants include
hotel aggregator Oyo Rooms, valued at $5 billion
in 2018, which attracted investment from SoftBank,
Sequoia Capital India, and Lightspeed India Partners.
Large companies have dominated fundings in India’s
tech ecosystem—led in 2017 by Flipkart and Ola Cabs.
10
India-bound venture capital investment has faced
headwinds, despite collectively raising $3.8 billion
between the start of 2015 and early 2018. With the
lack of exits in the mid 2000s, India’s top eight VC firms
(many from the Bay Area) slowed their seed and early-
stage investment. The internet sector was a particular
disappointment, where exits were few and returns
on investment were low. Overall early-stage funding
in 2017 hit a low, prompting a shift to sectors such
as financial services and software as a service.
11
Life
sciences investment has also struggled, as discovery
research has not advanced as rapidly as expected.
12
But the shift in the last three years toward large scale
fundings of later-stage companies may also reflect a
more disciplined investment strategy in the wake of a
large-scale rush to the internet sector in 2014–2015.
Perceptions of India could change as a result of
Walmart’s purchase in 2018 of a 77% stake in India’s
largest online retailer Flipkart, a deal valued at $16
billion. Walmart has 21 wholesale cash-and carry stores
in India and plans to open 50 more, and the Flipkart
deal will strengthen its position in the online market.
13
India’s largest VC-backed tech exit, it also sends a
message to investors that India can generate large-
scale exits and returns. Accel India was an early Series
47
Innovation, Startups and Investment: Poised for Breakthrough
exhibit 21
While Silicon Valley companies saw more tech deals than all non-US metro
hubs combined, Bengaluru and New Delhi placed in the High Growth Hubs
group, and Mumbai placed as an Up and Comer.
0
2,000
4,000
6,000
8,000
10,000
12,000
CB Insights 2018 Comparison of 25 Tech Hubs by Number of Startup Investment Deals, Jan. 2012–May 20, 2018
Heavyweight
Hubs
670
average
deal count
High Growth
Hubs
171
average
deal count
Up and
Comers
75
average
deal count
Source: CB Insights Global Tech Hub Report Visualization: Bay Area Council Economic Institute
A investor, later joined by SoftBank Group, New York’s
Tiger Global Management, South Africa’s Naspers,
China’s Tencent Holdings, Microsoft, Morgan Stanley,
and HDFC Bank. Flipkart is currently the best-funded
tech company in India, with over $6 billion in disclosed
funding. The second largest exit since 2010 was online
travel company MakeMyTrip, which went public in that
year at a valuation of $477 million.
14
48
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
Bay Area Connections
Growth-stage investment in India is funded primarily
by leading US VCs, with Indian firms doing smaller
scale investments; approximately 90 percent of venture
deployment in India is by US and other international
firms.
15
US limited partners are also active participants in
Indian venture firms.
Today, India is in its third wave of venture investment.
In the first, in the early 2000s, firms came from Silicon
Valley, made investments, and went home without
establishing a local presence. In the second phase,
US-based VCs established satellite offices in India, but
decisions were largely made in the US. The most recent
wave began in the late 2000s and saw the US venture
community’s presence increasingly localized. Some
firms, such as NEA, Kleiner Perkins, Canaan, and DFJ,
were not prepared to make all-in commitments and
left.
16
The remaining top tier firms, seeing that satellite
offices that lacked autonomy were not working, have
strengthened their local presence through dedicated
India funds and a shift of decision-making authority to
the local level. For those who stayed, the return on
investment is starting to come.
Sequoia Capital, with India operations based in
Bangalore, has invested more than $2 billion in 130
Indian companies and completed 55 exits since 2007. In
2018, the firm launched its sixth India fund, which closed
at $695 million.
17
In April 2019, Sequoia and Accel both
added to their already existing investments in electric
motorbike hailing company Bounce, a competitor
with Uber in the India market.
18
Further deepening
its engagement with startups, in 2019 Sequoia India
launched Surge, an accelerator program serving Indian
and Southeast Asian startups, and startups that are
oriented toward Indian and Southeast Asian markets,
which includes initial investments of $1–2 million for
accepted participants. At the close of the program,
which supports two waves of 10–20 companies each
year for 16 weeks, participants have the opportunity to
raise more capital from a curated panel of investors.
19
Accel launched its fifth India fund in 2016, for which it
raised $450 million.
20
Accel was among the investors
that received big benefits from Walmart’s purchase
of 77% of Flipkart in 2018, and it also kept some of
its Flipkart shares, leaving its position in the company
worth about $1.1 billion after having invested into
the company about $160 million over several funds
since 2008.
21
Accel was also among the investors in
Bangalore-based TaxiForSure and had another good
exit in 2018 when that company was acquired by rival
online cab booking service Ola for $200 million in a cash
and stock deal.
22
Matrix Partners raised $300 million for its third India
fund in 2018. Recent investments include Bangalore
health drink startup &ME, which is targeting the
women’s market,
23
Bangalore-based video sharing
app Clip App, for which Matrix led a $6 million Series
A round,
24
and (together with Ola and other Indian
companies) motorbike hailing company VOGO
25
WestBridge Capital is a leading India-focused
investment venture firm, with over $2.5 billion in capital
under management and a strategy of investing in high-
quality public and private businesses in India with a
long-term orientation. Co-founder Sumir Chadha sees
growing innovation around India’s domestic market, with
particular opportunity in fintech and consumer goods:
“Bank accounts have been established for millions of
people, and more loans are being made on digital
platforms, often on mobile phones. Most accounts
are still with government banks, but private banks are
starting to take more of the market. Consumer markets
also have lots of room for growth and penetration,
particularly in the middle class.”
26
IDG Ventures India, recently renamed Chiratae
Ventures, launched its first India fund in 2006, putting
up 100% of the initial $150 million capitalization. The
first fund’s early-stage investments mostly focused on
online retail, including fashion apparel and accessories
portal Myntra, baby clothing and supplies website
FirstCry, and eyewear retailer Lenskart. A second fund
of the same size focused on B2B services—such as
agricultural equipment and supplies seller AgroStar and
packing materials supplier Bizongo—along with startups
in the sharing economy such as home-sharing site
NestAway, home furnishings rental platform RentoMojo,
and credit management services firm CreditMantri.
27
A
third $208 million fund closed in 2017
28
and will focus
primarily on Series A and B investments, balanced out
by a few larger, late-stage plays. Among the sectors
49
Innovation, Startups and Investment: Poised for Breakthrough
being explored are consumer media and tech, fintech,
software/SaaS, and healthtech.
29
Recent portfolio
additions include trade finance/factoring portal Vayana,
salary advance lender EarlySalary and AI-driven blood
screening and diagnostics platform SigTuple. Successful
exits have included Myntra, acquired by Flipkart in 2014,
and business process management software developer
Newgen Software Technologies, which had its initial
public offering in January 2018.
30
Over time, IDG Ventures India has become a more
Indian entity. Initial lead investor IDG Ventures has
reduced its participation, with a 50% interest in the
second fund and a 25% interest in the third fund, which
had about 45% of its capital raised from India-based
investors. A fourth fund in the $275–300 million range
was launched in 2018 under the new Chiratae brand.
31
PointGuard Ventures is taking a different approach to
venture investing that mirrors the move by some Indian
tech companies to transfer more activity to the United
States. The firm was co-founded by Krish Panu, a serial
entrepreneur who helped design the first electronic
voting machine launched in India. Recognizing that
innovation was happening in the United States but
that much of its implementation was happening in
Asia—and China and India in particular—in its first fund
PointGuard Ventures focused on investment in the US,
then helping portfolio companies set up R&D centers
in India. Seeing a young population, growing markets,
and entrepreneurial energy, the firm will focus its second
fund on investment in India, with the objective of taking
companies and technologies developed in India global.
The heart of that strategy involves bringing them to the
United States.
Panu observes that India s is shifting from being service-
oriented to being product-oriented: “They already have
the global product mindset. Indian engineers have
learned how to develop cutting-edge technology, they
have experience, and they’re entrepreneurial. They also
know how to take risks. Indian entrepreneurs understand
how the global capital market works now, which is very
new. Many are ready to become global, and we can
help them do that by growing in the US.” Areas of focus
include enterprise software, mobile applications, artificial
intelligence, and the convergence of medicine with IT,
with an emphasis on data collection and processing.
Indians returning from the US to start new businesses
offer a promising starting point. PointGuard Ventures
will help open doors to customers and partners, while
building an R&D and business strategy for scaling to the
United States and beyond. In this way, the firm is looking
to reverse the historical pattern of US investment flowing
to India by making the flow two-way.
32
Other venture investors include Nexus Venture Partners,
which in 2018 led an $8 million Series A round for Santa
Clara-headquartered Observe.AI, an AI-based call
center conversational platform with a nine-person tech
team located in Bengaluru,
33
and Lightspeed Venture
Partners, which recently led a $20 million funding round
for magicpin, a social network platform for local discovery,
real-time promotions, and loyalty programs in the Delhi
National Capital Region, Mumbai, and Bengaluru.
34
JC2, a venture firm founded in 2018 by former Cisco
CEO John Chambers, has invested in 18 startups, half of
which have a founder of Indian origin. Two of those are
in India: Uniphore, a customer experience company, and
cybersecurity company Lucideus.
35
New venture firm entrants that are deeply rooted in
India have doubled down on the market. Mohanjit Jolly
joined DFJ in 2007, after working with Silicon Valley
seed fund Garage Technology Ventures, and spent
five years (2007–2012) with the firm in Bangalore.
36
When DFJ exited the market, he co-founded Iron
Pillar, which closed its maiden fund in 2018 with $90
million in commitments from global LPs and Overseas
Private Investment Corporation (OPIC) as the anchor
investor. The firm will focus on mid-stage tech investing,
principally companies raising $10–50 million in B, C, or
D rounds.
37
An optimist on the market, Jolly points to
the opportunity to leverage India’s large human capital
base, improving technology infrastructure, and booming
entrepreneurial ecosystem: “Entrepreneurs are seeing
that they can leverage India’s strengths to build globally
competitive companies without a massive presence in
Silicon Valley. Pent-up consumption demand among the
young, aspirational Indian demographic and technology
democratization are leading to a wave of consumer-
centric unicorns. Then there is the mobile revolution:
the combination of inexpensive smartphones and the
lowest cost data plans in the world, thanks in large part
to Mukesh Ambani’s Jio, has completely upended the
mobile market. That foundational connectivity layer is
50
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
bound to catalyze many more interesting opportunities
over the coming decade.”
38
Jolly sees white space in industry verticals that large
Indian companies haven’t filled, with investment
opportunities in renewables (distributed solar,
microgrids), fintech, e-commerce, health, and
education. The biggest opportunity may be in mobile-
enabled products and services, where he believes
Indian companies have an edge: “India is in many
ways a mobile-first or mobile-only environment. You
can’t just take a product from the US and repurpose it.
This creates an innate advantage and opportunity for
Indian entrepreneurs in everything from digital health to
logistics, mobile gaming, and consumer markets (which
are mobile-centric).”
The entrepreneurial bridge between India and Silicon
Valley is also being built through venture banking and
other services. Silicon Valley Bank, which opened an
office in Bangalore in 2004 and another in Mumbai in
2007,
39
was instrumental in first introducing many Bay
Area VCs to India. SVB India helped US clients, including
venture firms, through office space and local services,
and created a seed fund to invest in local entrepreneurs.
Its venture investment activity was later spun out as
an independent firm, Saama Capital,
40
and its venture
lending activity was spun out as Innoven Capital when
it was sold to Singapore’s Temasek Holdings in 2015.
41
Saama, which remains connected to the bank, currently
has about 36 companies in its direct portfolio.
42
Since then, the Bank has not maintained a physical
presence in India, but manages its India business
through its Silicon Valley-based Global Gateway unit,
which focuses on helping entrepreneurs from India with
the potential to become global companies bridge to
the US market, through banking services, introductions
and network support. SVB Global Gateway managing
director Andy Tsao observes that ten years ago
expectations were high among investors that India would
produce a crop of global technology firms. Many venture
firms entered the market but most were disappointed
when that vision wasn’t realized, and subsequently
withdrew. Asked what’s different today, he points to
the shift from offline to online commerce. Companies
like Flipkart and Snapdeal in e-commerce, Ola (an Uber
competitor), and Paytm (which is pervasive in India and
enables payments by phone without using cash) have
been noticed. In particular, Walmart’s acquisition of
Flipkart was a major liquidity event for investors on a
scale that had been lacking in the past. Still, most Indian
companies receiving venture investment are domestic
market plays, and with the exception of a handful of
SaaS companies, not likely to go global. Most leading
venture firms that are active in India remain conservative,
watching for breakout companies but largely focusing on
early-stage investing.
43
51
6
Information Technology: Upward Mobility
The Modi government has
emphasized technology innovation
in its push for modernization,
starting with its Digital India
initiative to push out government
services, communications, banking,
healthcare, and e-commerce to both
rural and urban areas.
IT, IT-enabled services (ITeS), and business process
management (BPM) in India constituted a $177 billion
sector in the fiscal year ending March 2019—$41
billion domestic and $136 billion in exports—that
employs 4.14 million workers, according to data from
the National Association of Software and Services
Companies (NASSCOM).
1
It is the largest private sector
employer in India.
2
NASSCOM’s survey of CEOs’ opinions about the
prospects for the fiscal year ending in March 2020, found
concerns about global protectionist policies against India
and lack of digital skills in the workforce as key risks that
could hinder growth in the IT sector. However, despite
the potential challenges of global macro economic risks,
CEOs are cautiously optimistic about the sector and
expect digitization initiatives to continue.
3
In response to
changing global markets and pressure on the traditional
IT outsourcing model, Indian IT & ITeS companies, such
as Infosys, Wipro, and Tata Consultancy Services (TCS),
have set up more than 1,000 global delivery centers in
about 80 countries worldwide.
4
Much of the industry’s export growth will be in digital
services—cloud computing and big data analytics,
internet of things (IoT), blockchain, automation, artificial
intelligence and e-commerce—versus traditional IT
network services such as systems integration and software.
In the 2018 fiscal year, India’s IT and ITeS-BPM sector
totaled $167 billion, of which exports composed about
$126 billion. Exports of software products and IT, BPM,
and software engineering services have had a 12.26%
compound annual growth rate between 2009 and
2018.
5
The US is India’s leading buyer of IT-ITeS-BPM
services, accounting for 62% of export sales of those
services in FY18, according to the India Brand Equity
Foundation (IBEF).
6
Domestically, India’s IT and ITeS-BPM sector—including
software products, engineering services, and hardware—
is expected to become a $350 billion industry and
contribute 10% of India’s GDP by 2025
7
—fueled by
a projected domestic market of 850 million internet
users.
8
Private equity/venture firm Omidyar Network
predicts that rising mobile phone penetration and
falling data costs will add 500 million new internet users
between 2017 and 2022.
9
Cisco and International Data
52
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
Corporation (IDC) project that this growth, propelled
by both service exports and domestic demand, will add
more than 1.4 million new IT jobs to India’s economy by
2027, driven primarily by emerging technologies such as
IoT, big data, cybersecurity, and digital retooling within
organizations. This will place growing pressure on the
IT workforce, requiring employee upskilling and new
educational programs.
10
Recent analysis by LinkedIn, based on users of its
platform in India’s top ten cities, finds that the top jobs
being hired for are in software and IT services (software
engineers, systems engineers, and business analysts),
manufacturing (design engineers, software engineers,
and project engineers) and finance (relationship
managers, software engineers, and sales managers),
followed by corporate services and education. The
top five cities that act as hubs for talent are New
Delhi (inclusive of Gurgaon and Noida), Bengaluru,
Hyderabad, Mumbai, and Chennai, with half of the
professionals who switch cities within India moving to
these destinations.
11
The Modi government’s Digital India initiative, rolled
out in 2015, will be a key driver of mobile, cloud, and
big data analytics as it promotes ubiquitous high-speed
broadband and Wi-Fi build-out across India; low-cost
phones, digital literacy, and job training programs;
and the Aadhaar biometric identity card that connects
citizens to healthcare and other government services. Bay
Area tech CEOs, including Apple’s Tim Cook, Google’s
Sundar Pichai,
12
Mark Zuckerberg of Facebook, and
Elon Musk of Tesla,
13
have committed to support to the
effort, while former Cisco chairman John Chambers has
stated that India is positioning itself to take advantage
of the opportunities afforded by ever-increasing global
digitalization in a way that few other countries are.
14
McKinsey & Company estimates core digital sectors
such as IT and business process management, digital
communication services, and electronics manufacturing
could double their contribution to GDP, rising to $355–
435 billion by 2025, while newly digitizing sectors (such
as agriculture, education, energy, financial services,
healthcare, logistics, and retail) and digital applications
in government services and labor markets could each
create $10–150 billion in incremental economic value—
causing productivity to surge.
With 560 million internet subscribers in 2018 (second
only to China), India is already one of the largest and
fastest growing markets for digital consumers. Indians
download more apps—12.3 billion in 2018—than any
country except China and spend more time on social
media—an average of 17 hours a week—than social
media users in China or the United States. The share
of Indians with at least one digital financial account has
more than doubled since 2011 to 80%, thanks in part
to the government’s mass financial inclusion program.
The enrollment of 1.2 billion people in the Aadhaar
program, the single largest digital identity program in
the world, in particular has enabled the spread of other
digital services, with almost 870 million linked bank
accounts as of February 2018.
15
Even with this, the market has considerable room to
grow. While many people have digital bank accounts, 90
percent of all retail transactions are still done using cash
and only 5 percent of trade is done online. McKinsey
estimates that by 2023, India will have a connected
market of up to 700 million smartphones and about 800
million internet users, which could propel the growth
of e-commerce with the potential economic value of
$25–35 billion in the country’s retail sector in 2025. The
benefits of these digital opportunities are accruing to
small companies as well as large ones: McKinsey’s 2017
survey of more than 600 Indian businesses found that
94% of small companies were accepting digital payments,
compared with only 79 percent of large firms.
16
Bharti Airtel reports that data usage per customer on
its network rose 125% over a single year to 9.2 GB in
2018 and up 900% over two years, as smartphones have
become the primary screen for customers. Counterpoint
Technology Market Research has forecasted that
monthly data consumption per user could reach 11 GB
by the end of 2019, propelled in part by growth in Tier II
and Tier III cities where mobile penetration is surging.
17
Mobile commerce in India, and digital services in
general may be on the threshold of revolutionary
change for another reason. Mukesh Ambani, India’s
richest man and the head of Reliance Industries,
invested $35 billion of the company’s money to
roll out India’s first all-4G network, Jio. Its offering
includes free calls and a data price that is a quarter
of the industry average. This has upended India’s
53
Information Technology: Upward Mobility
exhibit 22
The US is India’s leading buyer of IT and ITeS-BPM services, accounting for
62% of export sales of those services in FY18.
Sector Wise Breakup of Indian IT Market
(US$ bn) FY18
Growth in export revenue (US$ bn) Geographic Breakup of
Export Revenue in 2017–18
Sector Wise Breakup of
Export Revenue FY18
CAGR 12.26%
33.0
15.4
IT Services
Business Process
Management
Software Products and
Engineering Services
Hardware
21.8%
IT Services
BPO
E R&D and
software products
26 26
34
40
44
52
56
61
66
70
10
12
14
16
18
20
23
24
26
28
9
10
11
13
14
14
20
22
25
28
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
IT Services BPM Software Products and Engg. Svcs.
62%
17%
11%
8%
2%
US UK
Europe (ex-UK) Asia RoW
86.0
32.0
57.0%
21.2%
Sector
Composition
Key
Trends
Source: India Brand Equity Foundation
telecom sector by making very cheap internet
available to all segments of the population. Access
to extremely low-cost data, combined with India’s
growing mobile and smartphone deployment, has
the potential not only to accelerate the government’s
digitization strategy, but also to impact digital
service providers such as Google and Facebook, and
revolutionize sectors such as retail. After its rollout,
Jio transmitted more data in its first year than any
carrier worldwide, leading India to surpass the US in
the number of apps downloaded from Google’s Play
Store. In response, Jio’s competitors have sharply
cut prices, from more than $3 a gigabyte before Jio’s
launch to roughly 60 cents today. Monthly per user
data traffic in India has grown 570% in the two years
since the service was introduced.
18
Tech consultancy Gartner predicts that the public
cloud services market in India will grow by more
than 35% to $1.3 billion in 2020, with a proliferation
and expansion of data centers and hosting services
driven by rural internet penetration and e-commerce
growth. Business to business (B2B) e-commerce is
expected to reach $700 billion, while business to
consumer (B2C) e-commerce is forecast to reach
$102 billion.
19
54
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
Growth in activity is mirrored by growth in investment.
IBEF reports that India’s computer software and hardware
sector attracted cumulative foreign direct investment
(FDI) inflows worth $35.82 billion between April 2000 and
December 2018.
20
According to EY India, the country’s
e-commerce and consumer internet companies raised
over $7 billion in private equity and venture capital
funding in 212 deals during 2018. EY India partner
Vivek Soni remarked in March 2019 that “The last four
years have witnessed a spectacular increase in PE/VC
investments in India, and e-commerce has been one of
the leading sectors in attracting these investments.”
21
Government Initiatives
The Indian government views the development of
digital services as being essential to improving quality
of life and spreading prosperity across the country,
especially throughout rural areas that until now had not
seen the same direct jobs and service benefits from the
IT revolution as larger cities. While mobile connectivity
in India has been revolutionized, especially by Jio,
broadband remains a challenge. As of 2018, the latest
figures from the Telecom Regulatory Authority of India
(TRAI) indicated that there were 22.2 million broadband
subscriptions in the country, compared to roughly 250
households. Closing that gap is part of India’s drive to
achieve a $1 trillion digital economy and is one of the
many issues being addressed by the National Digital
Communications Policy–2018. The government has
announced that it aims to attract investment of $100
billion for the initiative, which has six overarching goals:
■ providing broadband for all;
■ creating four million jobs;
■ increasing from 6% to 8% the share that the digital
communications sector contributes to GDP;
■ taking India into the top 50 places in the ICT
Development Index of the United Nations
International Telecommunication Union (ITU);
■ ensuring digital sovereignty; and
■ enhancing India’s contribution to the global digital
economy.
22
While many of the projects required to achieve these
goals will create opportunities for overseas partners,
the digital sovereignty goal is causing major concern,
particularly for Bay Area companies that are global and
rely heavily on data. First, The Reserve Bank of India
(RBI) issued a directive in April 2018 to require global
payment firms to store and process all customer data
exclusively in India. Visa, together with payment firms
Mastercard and American Express, have opposed the
“only in India” move, fearing it will raise costs and divert
planned investments by requiring them to open local
data centers.
23
They also believe that it will inhibit their
capacity to transfer and analyze data for global fraud
detection if back-up copies can’t exist elsewhere, and will
inhibit startups (that need to access cross-border cloud
platforms as they expand globally) and innovation more
broadly. Another concern companies have expressed is
the exposure of data to inappropriate use by government
officials. Google, Facebook, Oracle, Salesforce, PayPal,
Microsoft, and Amazon would also be affected.
As proposed under the umbrella concept of digital
sovereignty, India’s data localization rule is among the
world’s most restrictive. Following the Indian Supreme
Court’s August 2017 landmark ruling that privacy is
a fundamental right, the government has issued a
proposed bill (the Personal Data Protection Bill, 2018)
that, if adopted in its present form, would impose
significant restrictions and safeguards on the use of
data, with a number of features that many global
companies find onerous. Current proposals would
require explicit consent for the use of certain kinds
of data, with the data fiduciary being legally liable
for any harm that might be caused.
24
The regulations
could negatively impact India’s future as a global
data analytics hub. As expressed by Microsoft India’s
managing director Anant Maheshwari, if there is concern
that “every state official can do anything with that data,
you ask yourself why would somebody send their data
to India.”
25
Besides payments firms, many Indian IT
firms such as Cognizant, Wipro, and Genpact, as well
as organizations such as USISPF (U.S. India Strategic
Partnership Forum) and India’s NASSCOM (National
Association of Software and Services Companies) have
also voiced their concerns regarding the Personal
Data Protection (PDP) Bill. On the occasion of his
appointment as telecommunications minister at the
beginning of June 2019, Minister Ravi Shankar Prasad
announced his intention to get the PDP bill to the
Parliament as quickly as possible.
26
55
Information Technology: Upward Mobility
The digital sovereignty and data localization debate
has a multilateral context as well, as India has opposed
proposals by the EU to create new and higher standards
for the global governance of e-commerce. The US, EU,
and China are among 76 WTO members that launched
negotiations in January 2019 to set future e-commerce
rules and obligations. The EU proposal included
addressing barriers that prevent cross-border sales;
addressing forced data localization, while ensuring the
protection of personal data; prohibiting government
requirements for mandatory source code disclosure; and
banning customs duties on electronic transmissions.
27
Another concern for Bay Area and other US tech
companies is a potential shift by India’s government
toward a model that favors Indian technology
companies over foreign ones. In a January 2019
closed door meeting, the Secretary of India’s
Telecommunications Department reportedly told
assembled startups that the government will introduce
a “national champion” policy to encourage the rise of
Indian companies. This development, which at some
level parallels China’s drive to create national corporate
champions, comes as US tech and online companies
have enjoyed growing success in India’s online markets
and has taken on a protectionist tone. Mukesh Ambani,
India’s richest man and the founder of Reliance Jio, is an
advocate of the national champions point of view.
28
Trends
Indian IT firms Infosys, Wipro, Tata Consultancy Services,
Cognizant, and Tech Mahindra have faced headwinds in
recent years, on several fronts. In the export segment,
they were slow to adapt to a shift in customer demand
beyond traditional IT toward more advanced digital
services. Recent US congressional and White House
proposals to restrict H-1B visas by redefining “visa-
dependent” companies, mandate higher minimum
wages paid to visa holders, and tighten enforcement
have added to uncertainty and, in some respects,
threaten the cross-border business model.
Foreign venture capital and angel investors see India
under the Modi government as the new, friendlier
alternative to China and are on the hunt for startup
investment opportunities. Risk-averse legacy Indian
tech companies that previously resisted growth through
M&A have struggled to compete for talent in tight
markets at home and in the US. As a path forward, they
are now embracing small acquisitions and equity stakes
and partnerships involving digital startups with specific
competencies. In foreign markets, including the US, they
are opening innovation hubs to hire and train locally,
while using targeted acquisitions and partnerships to
broaden service offerings.
“The fact is that there is a huge shortage of tech talent
in the US,” Wipro chief strategy officer Rishad Premji
told NASSCOM’s annual leadership forum in 2018, and
while 70% of H-1B visas go to Indian nationals, only
20% go to Indian tech companies. The task for industry,
he said, will be “changing the narrative, focusing on
the value that the IT companies bring to US companies
and companies globally.” At home, HCL Technologies
former CEO Vineet Nayar told Forbes India that IT firms
need to adapt quickly rather than incrementally if they
are to stay relevant. “Legacy is a drag on our future,”
Nayar said. “Because the country is old, the legacy in
the social sector is a drag, and because our IT industry is
now old, the legacy is a drag.”
29
The Bay Area-IT Connection
Shifts
As Indian IT firms up their game and adapt to a changing
market, Bay Area tech giants and entrepreneurs are
looking west toward a nascent, increasingly mobile
internet market ripe for disruptive change.
From the standpoint of overseas companies, China
is a growing factor in how they look at India. Over
time, many tech companies that had invested heavily
in Chinese joint ventures, R&D centers, university
partnerships, and contract manufacturing were not
seeing the longer-term results they had expected. The
Chinese government’s 12th Five-Year Plan called for
China to nurture national champions, accelerate the
replacement of foreign technologies with domestic
ones, and lead or dominate key technology sectors
both at home and abroad. Potentially intrusive cyber
security policies that provide for government access
to source code, and other policies requiring foreign
investors to transfer technology or take on local joint
venture partners, have increased concerns regarding
56
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
the protection of key IP. For some foreign companies
and industries, particularly in the internet sector, China’s
market is completely closed.
In that context, India—a democracy with a young,
skilled, often English-speaking workforce and a
modernizing, pro-business government—has
looked increasingly attractive. Additionally, the Modi
government’s “Digital India” initiatives to introduce
leapfrogging technologies—mobile devices,
telemedicine, electronic banking and payments, internet
access to government services—offer large-scale
opportunities only recently emerging in the US.
The resulting convergence of interests is bringing
Bay Area and Indian IT companies and entrepreneurs
together in new ways that promise significant advances
in technology, business processes, and economic
development. Through their Bay Area presence, Indian
IT companies are investing, engaging startups and
other partners in the development of cutting edge
technologies that will shape the future of the industry,
and testing new business models as they reconfigure
their global service and workforce base. At an inflexion
point as the US and global economies shift and
immigration debates intensify, some Indian IT companies
are looking to the future presented by the Internet of
Things (IoT) and other digital transformations where a
changing environment in the US may led to a shift away
from traditional offshoring to new service models that
center more expertise and jobs in the US.
In August 2014, Infosys established a second
headquarters for the Bengaluru firm in Palo Alto,
30
along with an innovation hub design studio to explore
potential applications for IoT, AI, machine learning,
virtual and augmented reality, and robotics. The
focus was on diversifying the company’s offerings and
capabilities quickly, through acquisitions and cultivation
of creative talent. Silicon Valley is seen as a key node
for Infosys in the US. Company executives describe
the region as a place to think about the art of the
possible—including the next generation workforce—
and as a place where Infosys has a unique combination
of facilities and partners. The Palo Alto studio remains
a proof-of-concept lab where staff, clients, and
partners can collaborate on solutions in AI, virtual and
augmented reality, robotics, and IoT.
31
It is also a place
to showcase innovations developed in-house or by
partners, foster cross-border activity between Silicon
Valley and India, and provide an “aspiration lab” hosting
hackathons and other programs for community college
and high school students.
Education and workforce development is a growing
part of the Infosys US strategy, according to company
vice president and head of government affairs Anurag
Varma. In 2017, the firm committed to hiring and
training 10,000 workers locally in the US through
innovation centers in Indiana, North Carolina,
Connecticut, Arizona, Rhode Island, and Texas.
32
The
centers are state-of-the-art facilities modeled on the
Palo Alto center (launched in 2014) that are focused on
developing workplaces featuring agility, collaboration,
and co-design. Such “workplaces of the future” are
built starting with the company’s 8–12 week training
program for all of its hires, from lateral recruits to fresh
grads from four-year universities and, for the first time,
even partnerships with community colleges for new
employees with two-year degrees who can have a
prosperous future with the company. Infosys has begun
its outreach to Bay Area community colleges to recruit
talent, drive internship programs, and supplement
curricula based upon the company’s own existing base
of 1,100 IT courses.
Varma notes that the plan for the innovation centers
was a pragmatic business decision that predated the
2016 US elections and wasn’t driven by the immigration
policy debate. “That wasn’t the genesis,” he says. “As
technology is changing, so is the workforce. If you have
a Fortune 500 client that’s being disrupted, you can’t ask
them to give you 8 to 12 months to come up with the
right people and move them through the H-1B process.
They’ll tell you no, they need an agile workforce close
by.” Infosys also realized that costs were comparable for
hiring and training someone locally with less seniority—
including second-career candidates with experience,
such as veterans—versus paying visa fees, compliance
costs, and higher salaries to overseas workers who
may still need specialized training. Training locally for
its workforce of the future could prove to be a better
investment than bringing in workers on H-1B visas.
So far, this strategy of investing to create a network of
centers for digital transformation in the US—a change
57
Information Technology: Upward Mobility
from the historical Infosys business model—is working.
The company has met its goal, announced in May
of 2017, of hiring 10,000 American IT workers within
two years. While using H-1Bs still has cost advantages
according to Infosys, a first-year hire in the US can be
as productive as a similar new hire from India with up to
four years of experience.
33
Wipro opened its Innovation Centre in Mountain View in
August 2017, labeling it a showcase for the “Art of The
Possible.” Its principal focus is on demonstrating new
enterprise applications in AI, virtual reality, hyperspectral
imaging, machine vision, and collaborative robotics and
automation. Entrepreneurs and small and mid-sized
tech firms are invited to showcase and integrate their
innovations with Wipro’s ecosystem. The Centre also
provides facilities for startups to collaborate on specific
projects with Wipro clients through its “Digital Pod”—
one of 14 worldwide—and its “Rapid Proto Lab.”
34
Wipro has invested in Bay Area technology startups
through its Wipro Ventures $100 million corporate
venture arm, which has focused so far on early- to mid-
stage startups. Bay Area investments include artificial
intelligence startup Vicarious, cloud-based business
network Tradeshift, and AI team solutions provider
Moogsoft, all in San Francisco; app testing platform
HeadSpin and cybersecurity firm CyCognito, both in
Palo Alto; big data storage and management company
Imanis Data (formerly Talena) and software-defined wide
area networks company CloudGenix, both in San Jose;
AI platform Avaamo in Los Altos; and automated cyber
threat incident management solutions firm Demisto in
Cupertino.
35
In 2017, the company acquired Cooper,
a San Francisco-based digital design and business
strategy consultancy, for $8.5 million and absorbed
it into Designit, the design arm of its Wipro Digital
business unit.
36
Tata Consultancy Services (TCS) has chosen an
approach of providing facilities and tools for ad hoc
teams of global tech partners and clients to collaborate
on specialized solutions. In 2012, TCS opened its
Silicon Valley Customer Collaboration Center in Santa
Clara, a workspace designed to bring innovative talent
together with customers. The center serves as the
world headquarters for TCS Mobility Solutions—which
advances big data, analytics, and mobile technology
product and service offerings across company verticals
such as banking, retail, and travel—and TCS Next Gen
Solutions—which develops specific software engineering
and design solutions for customers.
37
In 2016, TCS
opened its Digital Reimagination Studio in Santa Clara,
which enables teams to maximize the benefits of digital
technologies via rapid product prototyping.
38
Tech Mahindra has been in the Bay Area for over 20
years and is today a prominent player in technology
consulting and digital transformation, working with
companies like Google, Cisco, Adobe, Facebook, Uber,
Genentech among others.
The company’s presence was initially focused on
telecom, but its acquisition of Satyam, a leading Indian
IT company, in 2009 brought with it a larger Silicon
Valley operation that has since grown significantly—with
the number of key customers in the Bay Area doubling.
Over the time, TechM has also moved up the value
chain from traditional cost arbitrage model to one
of value arbitrage with digital transformation taking
center stage. Today it is a one-stop solution provider
for engineering, IT networks, and BPO services, with a
state-of-the-art lab in Fremont which showcases end-to-
end solutions for customers. It currently employs over
1,000 associates in the Bay Area (and another 7,000
worldwide) working for Bay Area customers.
Its growth in the region reflects a recognition at the
company’s headquarters that Tech Mahindra needed to
grow beyond outsourcing to move up the value chain:
the advent of AI and cloud computing would inevitably
cannibalize its business and the company could face
severe headwinds if it didn’t embrace change. It follows
the “run, change, grow” strategy where Tech Mahindra
runs their customers’ IT systems and operations;
engages them around disruptive change and digital
transformation; and helps them go to market through
jointly bundled services. Working with startups is part
of the equation, helping Tech Mahindra reimagine the
company’s position in a changing market.
Tech Mahindra Senior Vice President and SBU head
for Technology Business Harshul Asnani says, “It is a
very interesting time living and working in the Silicon
Valley. We are fortunate in the Bay Area to get a front-
row view of the new technologies that are emerging
58
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
and their impact on societies. We also believe we’re at
an inflection point, with many technologies converging
to form the foundation of the modern economic
infrastructure and creating unique opportunities.”
39
Asnani further adds, “Silicon Valley is central to Tech
Mahindra’s growth strategy. As part of the TechMNxt
initiative, we have taken a forward position in key fields
like AI, blockchain, 5G, and IoT and have undertaken
a massive initiative internally to reskill our 120,000
associates.” Asnani also believes that one of the best
ways to tap into Silicon Valley is through partnerships
with startups: “Startups have great technology but
don’t have market access. We can take them to our
customers and build a business together.” The company
has identified 30 startups in the US, UK, India, and Israel
as partners or as recipients of funding. In Silicon Valley,
TechM has funded and/or partnered with nine startups,
including AIOps company Fixstream (where it has a
major stake) and other startups like Avaamo, H2O.ai,
and Spanugo, to enhance its suite of offerings.
While most of its Bay Area activity is concentrated
in Tech Mahindra, the Mahindra Group’s presence in
Silicon Valley also includes Fremont-based Mahindra
Genze, which has conceptualized and designed an
electric bike/scooter in Silicon Valley.
The movement of IT companies between the Bay
Area and India goes in both directions. Many Bay
Area companies have a significant presence in India,
particularly around IT.
Google is deeply engaged in India, where Google
Search and the Android smartphone operating
system both enjoy 90% market shares, where Gmail
has its largest user base, and where YouTube is
watched online and offline by 80% of internet users
(some 225 million viewers) each month.
40
India
saw 36.9 billion app downloads from the Google
Play Store between January 2012 and August
2018, the highest rate among all countries in the
world including the US (which had 35.1 billion
downloads).
41
Its mobile payment app Tez, (see
Chapter 10 on fintech), launched in September 2017,
had 10 million downloads, and captured a 60% share
of mobile payments in its first month. Google also
provides Wi-Fi stations and coverage in partnership
with Indian Railways.
42
X, the “Moonshot Factory” of Google’s parent
company Alphabet, is developing a Free Space
Optical Communications (FSOC) network for Andhra
Pradesh—a state of 53 million—layering onto the
existing Wi-Fi network a system of laser-beaming
transmitters atop roofs, utility poles, and other
structures, to help bring internet access to 12 million
households and 13,000 business, government, and
institutional locations that the state government
has pledged to connect as part of its AP Fibre Grid
program. For Alphabet, the effort is part of Google’s
Next Billion Users (NBU) initiative to enable more first-
time internet users.
43
In another NBU project, Google sent out four-person
teams to shadow cross-sections of locals in Mumbai,
Hyderabad, Delhi, Ahmedabad and Bengaluru at home
and work, as they walk, take transit, run errands, see
friends, and get information to solve routine problems
like finding a nearby ATM or an all-night pharmacy. The
end product is Neighbourly, an ad-driven hyperlocal
discovery and community app, launched on May 31,
2018 in English, Hindi, Marathi, and six other Indian
languages.
44
Mumbai, a metro area of 20 million, was
the test market, with progressively more cities added,
including Delhi, Bengaluru,
45
Ahmedabad, Coimbatore,
Mysore, Vizag, and Kota.
46
One asset for Google is India’s diversity, which requires
planning and flexibility to address different price points,
devices, product needs, languages, and services across
a broad market. “When we build better products for
India, we eventually build better products for everyone,”
NBU vice-president Caesar Sengupta told a Google for
India event in December 2017.
47
According to strategic marketing consultancy Kepios,
Facebook had 300 million Indian users in January 2019,
making India the world leader in terms of Facebook
audience size, outpacing the 210 million US Facebook
user base by 42.9%.
48
With an intensified focus on India
after it was banned in China in 2009,
49
reaching the
market and bringing more new users online in India are
high priorities for Facebook. The social media platform
has doubled its audience base in India since 2015, and
its expansion is expected to continue.
50
In 2016, Facebook unveiled its Express Wi-Fi service
in India, which allows internet service providers (ISPs)
59
Information Technology: Upward Mobility
and entrepreneurs to create Wi-Fi hotspots in their
areas and resell internet access to local customers.
51
An
initial ad-driven service, Free Basics, allowed access to
36 bookmarked websites in a free package for mobile
providers to offer customers without data plans, but that
was blocked by the Telecom Regulatory Authority of
India (TRAI).
52
For the launch of the Express Wi-Fi service,
Facebook partnered with Bharti Airtel and other resellers
to deploy hotspots in rural areas, and the new service
offering full internet access for a price
53
was well-received.
With the surge in South Asian users have come
problems similar to those faced in America.
Misinformation and hate speech spread on Facebook
and the company’s WhatsApp instant messaging service
have been blamed for numerous acts of violence, and
the company has been hard pressed to find solutions.
54
In mid 2018, Facebook introduced third-party fact-
checking in India with a pilot program in Karnataka
to fight the spread of false news
55
and also deployed
new features on WhatsApp, such as warnings about
suspicious links. In the spring of 2019, the company
removed hundreds of pages and accounts from its
platforms that it believed were spreading misleading
information ahead of India’s May election.
56
Oracle was among the first multinational software
companies to set up a base in India, establishing its
presence there in 1987, followed by the opening of
Oracle India as a wholly-owned subsidiary in 1993.
57
India is Oracle’s sixth largest revenue-producing
country
58
and its second largest base of operations
outside the US,
59
employing 38,000 workers across
the country.
60
Oracle India Development Center
teams are responsible for engineering work across
the company’s complete portfolio, especially cloud
offerings. Among the many projects Oracle has enabled
are the autonomous database and cloud warehouse
unified ATM management system deployed by India’s
pioneering Federal Bank; an AI-enabled customer
engagement website chatbot successfully prototyped
in only two weeks by leading electrical appliances
company Bajaj Electricals using Oracle’s intelligent bots
service;
61
and a high-performance, reliable, and scalable
e-ticketing platform developed for Indian Railways by
the Center for Railway Information Systems (CRIS).
62
Oracle’s India workforce of more than 40,000 is second
only to its workforce in the US. In 2016, it made a $400
million investment in a 2.8 million-square-foot India
headquarters campus in Bengaluru emphasizing cloud
computing; nine incubation centers across the country
to provide startups with workspace, tools, and training
on the Oracle platform; and expansion of its Oracle
Academy program, which partners with more than 1,100
educational institutions in India to advance computer
science education and drive knowledge, innovation,
skills development, and diversity in technology fields.
63
Over time, the company has steadily widened its focus
in the Indian market to enable the digital transformation
of business in previously untapped segments, especially
some 51 million small and mid-sized businesses (SMBs),
many of whom haven’t worked with Oracle or used
cloud computing before. In mid-2017, Oracle opened
its first “Digital Hub” in Bengaluru to provide SMBs
with a complete suite of cloud applications, platform,
and infrastructure services as both stand-alone services
and as bundles.
64
In January 2019, the company
publicized plans to set up its first India data center for
the cloud in Mumbai.
65
Energy has become another key sector for Oracle; it
has won projects in seven states to provide enterprise
resource planning and other solutions for utilities
and is working on supplying blockchain solutions for
oil and gas companies. It sees a $350 million overall
addressable market for ICT across the utilities sector for
all Government of India projects.
66
Salesforce, which entered the India market in 2005,
67
has more than 1,000 employees
68
across its four
India locations in Bengaluru, Gurgaon, Mumbai, and
Hyderabad. The Hyderabad office, Salesforce’s largest
global office outside of its San Francisco headquarters,
was opened in 2011 following the cloud computing
and CRM company’s $31 million acquisition of cloud-
based online conferencing firm Dimdim, a Boston-based
company with a Hyderabad presence.
69
In early 2017,
taking advantage of Hyderabad’s global connectedness
and deep technology talent, Salesforce opened a center
of excellence in Hyderabad to provide customer services
such as application support, incident management,
escalation management, operations functions, and
back-end services.
70
Clients within India include
Janalakshmi Financial Services, HCL, United Breweries,
Urban Ladder, Godrej, KFC, DTDC, Edelweiss Wealth
Management and InMobi.
71
The company has a strategic
60
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
partnership with Pleasanton-based SpringML—an
Indian-American machine learning and advanced data
analytics company operating in Hyderabad—that
enhances both companies’ abilities to help customers
benefit from advances in machine learning and AI in the
energy, healthcare, technology, and media sectors.
72
While the Americas continue to be Salesforce’s largest
market, India is one of the company’s fastest growing
regions, with revenues doubling year-on-year.
73
The
Salesforce ecosystem is expected to generate up to
1.1 million direct and indirect jobs and $17.2 billion in
aggregate business activity in India by 2022, according to
statements by Salesforce India senior area vice president
and country leader Sunil Jose in a May 2018 interview.
74
To help prepare students in India with in-demand job
skills for the workforce of the future, Salesforce is working
with industry and academia using its Trailhead gamified
online learning experience platform and has partnered
with ICT Academy, a Government of India initiative,
to deliver skills training for more than 200 institutes,
reaching more than 100,000 students per year.
75
The company sees major opportunities in financial
services, mobile technology, and retail as the economy
becomes increasingly cashless and data-driven. Like
Oracle, Salesforce is focused on reaching the SMB market
and has launched its Essentials dual suite of easy-to-use
intelligent apps for small business teams: Sales Cloud
Essentials aims to enable small sales teams to get up
and running faster and work smarter, while Service Cloud
Essentials is designed to help small service teams set up
instant help desks and provide faster, more personalized
customer service. Both offerings are intended to provide
SMBs with more cost-effective ways to quickly meet
immediate needs and still be able to easily scale up to
more advanced capabilities in the future.
76
Zendesk, a San Francisco-based CRM software-as-a-
service provider originally founded in Copenhagen in
2007, empowers organizations to improve their customer
engagement;
77
among its US clients are Dropbox,
Shopify, Groupon, Vimeo, and Lyft.
78
While Zendesk has
a strong track record catering to the needs of startups
and small enterprises, it focuses also on mid-market
and larger businesses, as well as employee service,
79
and it sees potential for serving companies in the
financial sector. Company vice president for Asia Pacific
sales Sandie Overtveld told India’s Financial Express in
August 2018 that Indian banks and insurance firms are
embracing digitization, bringing them in more direct
contact with consumers under the Digital India initiative.
Insurers in particular, who now rely on networks of sales
advisors and agents for nearly all of their business, stand
to benefit from disintermediation and direct relationships
with at least 25% of their customers.
80
Zendesk opened a Bengaluru office in 2016 to more
closely serve and communicate with an existing Indian
client base of about 2,000 businesses,
81
among them
taxi-hailing service Ola, matchmaking app Shaadi.com,
online classified advertising firm OLX, and online
prescription ordering service PharmEasy.
82
India
currently represents 2% of the firm’s business.
83
Zendesk
sees significant opportunity, given India’s younger,
mobile-connected demographic, rising living standards
and a rapidly growing e-commerce market expected to
reach $120 billion by 2020.
84
Apple has so far struggled to gain a footing in India’s
market, as 95% of smartphones sold there cost less
than $500, and the company has been unable to open
retail stores due to government requirements for local
manufacturing. More than half of all iPhones sold in
India are older models;
85
a contract manufacturer,
Wistron, has been assembling entry-level iPhone SE
and 6S models that Apple sells locally at price points it
deemed more realistic for the India market.
86
However,
in April 2019 Apple announced it had begun producing
the iPhone 7 at Wistron’s facility in Bengaluru. Shortly
thereafter, reports emerged of plans by Apple to
produce its high-end iPhone X in India through contract
manufacturer Foxconn at a plant in Chennai.
87
The shift being considered to newer model local
manufacturing by Foxconn is in part a response to
Apple’s dependence on China for manufacturing and
for sales, which is seen as vulnerable to US-China trade
frictions. Production in India could help lower the
iPhone’s price relative to the less expensive Chinese
and Korean phones that currently dominate the market,
while addressing the government’s manufacturing goals
and working around India’s tariffs on luxury imports.
While India’s market is growing, to achieve this Apple
would need to address current weaknesses in India’s
production systems, including the need for more
61
Information Technology: Upward Mobility
workers skilled in precision manufacturing, and the lack
of a smartphone supply chain comparable to China’s.
Cisco Systems has operated in India since 1995. In
addition to its seven sales offices in Delhi, Mumbai,
Bengaluru, Chennai, Pune, Kolkata and Hyderabad,
the Cisco Global Development Center in Bengaluru—
at times referred to as Cisco’s “second global
headquarters”—is the company’s largest campus
outside of the US, consolidating R&D, IT services, and
customer support functions.
Cisco has filed more than 1,000 patents from India,
with 600 issued for innovations across a wide range
of technologies. The company has joint development
centers with Wipro and Infosys in Bengaluru, with HCL
Technologies in Chennai, and with Zensar Technologies
in Pune. It products and services are marketed through
more than 2,500 partners and distributors throughout
India. Key Cisco customers include Tata Group,
Mahindra & Mahindra, Larsen & Toubro, Gas Authority
of India, and Hindustan Lever; telecom providers
Reliance Industries, Bharti, Vodafone, BSNL, and IDEA
Cellular; banking and financial services firms HDFC
Bank, State Bank of India, UTI, IDBI Bank, ICICI, and Yes
Bank; and the state governments of Rajasthan, Gujarat,
West Bengal, and Andhra Pradesh.
88
Cisco is also a partner with Mukesh Ambani’s Reliance
Industries in the build-out of Reliance Jio’s, 4G-only
virtualized network launched in 2016.
89
Jio provides
India’s most extensive 4G coverage with 98.8% 4G
availability according to a test by internet analysis website
Speedtest in the second half of 2018.
90
Ambani’s and Jio’s
vision to introduce Indians to smartphone capability and
the internet by offering very-low-cost bundles starting
with free voice and introductory cheap data has been
wildly successful. Cisco and Jio created the extensive
4G network in only three years, and it had acquired 280
million subscribers by the beginning of 2019.
91
Palo Alto-based data center virtualization provider
VMware, with offices in Bengaluru, Pune, and Chennai,
has been in India since 2005
92
and employs an India
workforce of more than 5,000.
93
Known for its core
strengths in virtualization—the creation of a virtual
version of an operating system, server, or storage
device, which lowers costs for data centers—VMware
is focusing on networking cross-cloud services and
the utilization of AI and machine learning in a hybrid
cloud operating model.
94
“India is involved in almost
everything the company does,” VMware CEO Pat
Gelsinger told the Times of India in 2016, noting that
the India operation—in particular the 438,000 square-
foot, $120 million Bengaluru campus
95
—is central to
the company’s management, storage, networking,
and distributed firewalls endeavors, and about half of
the engineering for its AirWatch mobile management
business is done there.
96
In agriculture, VMware virtualization technology enables
the Chitale Dairy company’s centralized server to monitor
the health, breeding potential, and output of 200,000
cows for farmers statewide, using radio frequency
identification (RFID) sensors as part of a “Cows in the
Cloud” program that improves the quality of milk
products, thereby boosting the local economies.
97
VMware virtualization helps Mumbai-based online ticket-
selling platform BookMyShow manage demand surges,
98
and the company’s software solutions are also being
used by Bharti Airtel and State Bank of India.
99
Prior to its 2015 split into two companies, computer and
peripherals maker HP Inc. and enterprise network and
cloud solutions developer Hewlett Packard Enterprises
(HPE), Hewlett-Packard had been in the India market
selling peripherals—mainly printers—and partnering with
Hindustan Computers, Ltd., now HCL Technologies, on
enterprise computing and networking solutions for the
India market.
100
With its 2002 acquisition of PC maker
Compaq,
101
the company had taken over Compaq’s
India PC manufacturing, software development, and IT
services operations. By 2017, two years after the split, HP
Inc. had grown its overall India market share from 25%
to 31% and its premium PC segment from 3% to 40%. It
also held on to a 46% printer market share and grew its
ink-tank printers and gaming PC segments from zero to
20% or more.
102
Since then, HP has been in a race with
Dell and Lenovo for the top traditional PC market share
in India, but has continued to lead with its 31% market
share at the end of 2018.
103
HP experienced robust 2018 growth in its Asia-Pacific
and Japan region, in which India is a key focus area,
where the company sees providing mass digital
education as an engine for future growth. The company
has launched an affordable mini desktop computer
geared towards students and enabling schools to
62
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
upgrade their STEM labs at minimal cost, Another
HP initiative, “HP World on Wheels (WoW)” uses
solar-powered, internet-enabled, digital inclusion and
learning labs self-contained in buses to bring digital
literacy to rural students, and especially rural women.
The bus facilities are also used by rural dwellers for
Aadhaar and accessing related government services.
HPhas also collaborated with Microsoft to create “Smart
Learning Hubs” at 600 HP World stores across India that
are engaging existing customers andcustomers-to-be
with edutainment.
104
San Francisco-based Uber, which describes itself as
a technology company, entered the India market in
2013.
105
As of April 2019, it operates in 40 cities across
India
106
and is investing heavily to expand its market
share, after retreats in China and Southeast Asia.
Uber is structured differently in India, more closely
resembling a conventional taxi service. Its drivers tend
to work full-time rather than driving to supplement
other income. Privately-owned vehicles require a
special transport vehicle permit, and drivers pay 20%
of their earnings to Uber as a technology and service
fee. Uber and Ola both partner with banks and car
companies that finance vehicles for drivers who don’t
have their own cars. Some drivers work for transport
contractors that operate the equivalent of taxi fleets,
paying drivers a flat fee.
Uber signed up with Paytm in 2015 in order to comply
with the Reserve Bank of India‘s two-step authentication
requirement for online transactions, but later introduced
a cash option that boosted ridership. The company
added security features to its app—a panic button and
GPS tracking—in response to reports of sexual assaults
by drivers. Regulators also capped surge pricing in Delhi
and Bengaluru.
107
India currently accounts for more than 10% of Uber’s
global ride volume and the company has a more
than 35% share of India’s taxi market, according
to Counterpoint Research.
108
The company’s Asian
business has struggled in the face of local competition.
Having exited the China market due to competition
from home-grown ride sharing company DiDi,
109
in
March 2018 Uber sold off its Southeast Asia business
toa Singapore competitor, ride-hailing and food
delivery service Grab for a 27.5% stake, in part to
refocus on strengthening its competitive position in
India. Its main competitor in India, Ola, operates in
nearly 125 Indian cities
110
compared to Uber’s 40. But
Uber is digging in its heels, investing heavily in the
market, and is reportedly not prepared to see India go
the way of China and Singapore.
111
Airbnb is also expanding in India with an April 2019
investment, reported to be between $100–200 million,
in Indian hotel booking and managed home property
startup Oyo Hotels & Homes. Oyo manages more
than 6,000 homes globally and has 18,000 franchised
or leased hotels, making it the sixth largest hotel
operator in the world by the number of properties.
The companies are exploring the listing of 10,000 Oyo
properties on Airbnb’s website.
112
Netflix is competing with the India mobile-first
streaming company Hotstar, which dominates the
market, YouTube, which is India’s second-largest video
content platform, and Amazon. Netflix is producing
large volumes of Indian-language dramas. Growth
in streaming services is being enabled by expanding
internet access and plummeting mobile data prices.
Netflix in India costs about $7 a month, but now offers
smartphone-only plans that cost less than $1 for a
week of access.
113
Asked in 2108 where new Netflix
subscribers will come from in the future, CEO Reed
Hastings answered, “Given the consumer base, the next
100 million for us is coming from India.”
114
63
spotlight
Aadhaar and Internet Privacy
As it moves forward with modernization, India has
come face-to-face with a difficult choice common with
the internet: How much individual privacy is worth
sacrificing for digital convenience and a perceived
public good?
More than 1 billion Aadhaar universal ID cards have
been issued as of November 2018,
1
covering 98%
of India’s adult population, according to the Unique
Identification Authority of India (UIDAI). What was
established in 2009 as a verifiable identifier to enable
citizens to easily receive government assistance
payments and prevent fraud has evolved since
2016 into a massive, database of detailed personal,
demographic, and biometric data.
2
Aadhaar assigns a unique 12-digit number to each
person, and in addition to basic personal information
includes fingerprints, iris scans, and facial scans.
Intended to mitigate corrupt practices and ensure
transparency in India’s welfare system, Aadhaar IDs
quickly became entrenched in daily life, being used by
both government and businesses for systems ranging
from pensions to scholarships, insurance payouts, and
bank accounts. The ID system also quickly ran into
controversies over privacy issues, the government’s
authority to mandate enrollment and data collection,
and the lack of safeguards against government
surveillance, with legal challenges going to India’s
Supreme Court. In September 2018, the court’s five-
judge bench struck down the section of the Aadhaar
Act that allowed corporate entities or even individuals
to demand an Aadhaar number for enabling the
exchange of goods or services, but the number must
still be used for government transactions such as filing
income tax returns.
While Aadhaar enrollment is now technically voluntary,
possessing the ID still remains a practical necessity
and problems with the system have persisted. There
have been multiple instances of Aadhaar data leaking
online through government websites or its mobile app,
mix-ups in which money was transferred to the wrong
account, and fingerprint recognition failures which
can be life or death issues for poor people needing to
receive food benefits.
3
In another Modi initiative in mid 2018, the government
issued a tender for a new media command center that
would collect and analyze 24/7 digital media chatter;
map people creating buzz across various topics; rate
conversational threads as positive, neutral, or negative;
and store the information in a searchable database.
The proposal was quickly dropped after three of India’s
Supreme Court justices remarked that the plan was
akin to “creating a surveillance state.”
4
64
spotlight
Digital India: Ubiquitous Data
India’s Union Minister for Law & Justice,
Telecommunications, Communications, and Electronics
& IT Ravi Shankar Prasad makes a persuasive case
that India’s rapid embrace of mobile devices, digital
payments, online access to services, and the Aadhaar
national biometric ID card is modernizing India and
equalizing economic opportunity, health, and education
in record time. At an August 2018 meeting in San
Francisco co-sponsored by the Bay Area Council,
Minister Prasad encouraged Bay Area firms to forge
deeper partnerships with India and invest in an
“improved climate.”
The numbers are impressive: 1.3 billion Indians,
using 468 million smartphones and 701 million
non-smartphone mobile phones;
1
185,000 miles of
optical fibre cable laid by the BharatNet project as
of November 2018;
2
268 mobile phone and ancillary
manufacturing units (making India the world’s second
largest mobile phone producer, up from just two mobile
factories in 2014);
3
350 million Jan Dhan zero-balance
bank accounts opened for the previously unbanked,
rural poor;
4
more than 20 billion digital payment
transactions from April 2017 through March 2018;
5
about 30 million online authentications every day;
6
and
basic health insurance for 500 million Indians under the
Ayushman Bharat scheme launched in October 2018.
7
“Inclusion is the most important theme when it comes
to Digital India,” Minister Prasad told business leaders.
“We view it in terms of the digital haves and have
nots.” It is also important, he added, to acknowledge
the challenges posed by technology, most notably in
two policy areas of concern to Silicon Valley: the spread
of disinformation and extreme speech on social media,
and data privacy and security.
In response to a challenge to both private companies’
data mining practices and government-mandated
collection of citizens’ health and financial data under
the Aadhaar scheme, the Supreme Court ruled in
August 2017 that Indians have a fundamental right to
privacy.
8
The Court followed up in September 2018
with a ruling that Aadhaar is constitutionally valid
and stressed the importance of closing the privacy
loopholes that have raised concerns about the system.
9
“When the Constitution came into effect in 1950 it
guaranteed every Indian a vote,” the Minister said.
“Such is democracy and it is an empowering thing.
But democracy also leads to chaos. We need to have a
fine balance among data availability, data utility, data
innovation, data anonymity, and data privacy.” He
noted that the Court does place limits on privacy in
two areas: “There is no privacy to shield corruption or
terrorism and privacy cannot be used to kill innovation
or stifle R&D.”
On data protection, he echoed the Court’s position
that private companies have a fiduciary responsibility to
protect critical personal data, and that sensitive data—or,
at minimum, a copy of that data—should reside in India.
10
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spotlight
GE’s Digital Vote of Confidence for India
General Electric Co. CEO Jeffrey Immelt saw
important synergies for his firm and India in 2014
with the election of Prime Minister Narendra Modi.
Indian manufacturing had languished at only 17% of
GDP,
1
suffering from small, outmoded factories and
machine shops, notoriously poor infrastructure and
logistics, and bureaucratic delays and labor rules.
GE, meanwhile, had embarked on a global journey to
build an industrial internet-of-things (IIoT) that connects,
integrates, and monitors equipment, processes,
and inventory from the edge to the cloud. Its Predix
distributed application and services platform, launched
in 2013 and released for use by outside companies in
2015, connects data from physical assets to analytics
and industrial applications, providing companies
with an infrastructure they can use to build their own
customized applications within their manufacturing
and IT operations.
2
For example, applications built
on the Predix platform have been used in additive
manufacturing to monitor the 3D printing of aircraft
parts, keeping track of machine utilization and spotting
potential problems before they occur.
3
The Modi government’s Make in India initiative—
along with policy changes such as demonetization
and a simplified goods and services tax (GST) to
bring businesses into the formal economy and
encourage them to scale up—provided a helpful
catalyst for modernization.
At the intersection of these converging interests is
SanRamon-based GE Digital, formed in 2015 by
merging GE’s Software Center, global IT and software
teams, and industrial infrastructure security firm
Wurldtech,
4
acquired in 2014. GE Digital’s charter was
to bring AI, machine learning, and predictive analytics
to the factory floor. Among its India investments are
■ a 68-acre “brilliant advanced manufacturing”
plant, opened in Pune in 2014, which is a first-of-
its-kind multi-modal factory set up to manufacture
components for different verticals—such as
aviation, transportation, healthcare, and energy—
using equipment digitally connected in an IIoT, and
linked via the cloud to supplier, distribution, and
service networks;
5
■ a GE Digital Hub global innovation center launched
in Bengaluru in 2016, which is a 200,000-square-foot
center for the co-creating of industrial software and
analytics solutions with customers and GE experts
and opened with a staff of 1,500 engineers and
programmers specializing in data sciences, analytics,
and product development to deliver IIoT solutions
centered on Predix;
6
and
■ GE technology centers with 4,300 employees across
locations in Hyderabad, Chennai, Noida, Mumbai, and
Bengaluru, which is home to a $220 million 50-acre
campus that is the company’s largest integrated
multidisciplinary R&D center outside the US.
7
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spotlight
Women and Technology: Connecting to a Better Life
No single subset of Indian society has more to gain
from the introduction of digital technology, products,
and services than women, who comprise slightly less
than half of the country’s population.
Women currently account for only 25% of India’s
workforce and 18% of its GDP. McKinsey has estimated
that India could add as much as $770 billion to annual
GDP by 2025 with full gender equality, an 18% gain
over maintaining the status quo.
1
The female labor
force participation rate has been steadily declining,
primarily among urban, middle-class women with
intermediate education, as living standards and wages
rise for their husbands, jobs matching their skills are in
short supply, and combined household wages aren’t
sufficient to pay for full-time help caring for the home
and children.
Barriers extend from employment to
entrepreneurship. The 2018 Mastercard Index
of Women Entrepreneurs (MIWE), which focuses
on female entrepreneurs’ ability to capitalize on
opportunities provided in their communities, ranked
India #52 out of 57 countries studied. By contrast,
the Unites States ranked #4 and China #29.
2
The
reasons can be traced to cultural barriers, significant
underlying issues in women’s participation in the
workforce, and access to post-secondary education
and financial resources or services.
Research in 2017 by digital talent recruiting portal
Belong revealed that nearly half of women with college
and post-graduate STEM degrees working in the tech
sector leave work after 5–8 years, as they reach a glass
ceiling or seek out a better work-life balance. Women
make up 34% of India’s overall tech workforce, 26% of
engineers and 7% of senior management.
3
Most Indian women, however, have fewer options: of
the estimated 120 million women in the workforce,
97% work in the informal sector because they have to,
often in low-paying areas like agriculture, piece-work
manufacturing, domestic work, or recycling.
4
Cultural impediments are a factor, especially in rural
India. While the official average literacy rate across
India is 74% based on 2011 Census data, that average
breaks down into an 82% rate for men versus a
65% rate for women, with female literacy rates as
low as 53% in poorer and more rural states.
5
Local
customs and traditions keep many women at home,
discouraging work, school, socializing beyond the
immediate neighborhood or accessing the internet
in community spaces. Rural villages administered by
unofficial “khap panchayats”, village councils which
adjudicate disputes and guide moral behavior, have
banned or severely restricted mobile phone use by girls
and women outside the home.
Not surprisingly, India has a pronounced gap in
technology use among men versus women. Men, as
heads of the households, often control household
budgets, including purchase and use of mobile phones.
A 2018 study by information and communications
technology think tank LIRNEasia, in cooperation
with the Department of Telecommunications and
the Cellular Operators Association of India (COAI),
revealed that 80% of Indian men but only 43% of
women use mobile phones.
6
According to a report
of October 2017 data from the Internet and Mobile
Association of India and marketing firm Kantar IMRB,
internet usage is skewed towards men as well, with
59% male versus 41% female internet users in urban
areas and 64% male compared to 36% female internet
users in rural areas.
7
Reversing these trends will require a shift in cultural
perceptions, accompanied by more attractive
work options in the formal sector, improved access
to education and skills training, and corporate
commitment to hiring, retaining, and providing career
paths for women. As India’s largest private sector
employer, the technology industry has a particularly
important role to play, not only in large tech centers
like Bengaluru, Mumbai, and Hyderabad, but also
in Tier II and III cities. In the countryside, digital
connectivity is bringing basic skills, microcredit, work
67
from home on flexible schedules, and entrepreneurial
startup opportunities to rural women, thanks in part to
the rollout of mobile broadband, the Pradhan Mantri
Jan Dhan Yojana (PMJDY) financial inclusion scheme,
and other elements of the Digital India initiative.
“Inclusion is the most important theme of Digital India,
in terms of addressing the digital haves and have-
nots,” National Association of Software and Services
Companies (NASSCOM) President Debjani Ghosh
told a San Francisco business audience in August
2018. Ghosh, formerly South Asia managing director
for Intel and the first woman to head NASSCOM,
stressed the Modi government’s sense of urgency in
pushing technology and connectivity out to India’s
population. A major goal of this broad thrust is greater
independence for women. “When Indians interact with
technology you see a clear pattern,” Ghosh explained.
“They observe, then they adopt, then they enjoy, and
finally they are empowered.”
8
A range of public and private initiatives are helping, in
many cases with support from California companies.
Some examples follow:
■ India’s Ministry of Women and Child Development
has created an online retail portal, Mahila E-Haat
(Online Marketplace), for rural women entrepreneurs
to showcase and sell their products, from clothing
and jewelry to home furnishings, industrial products,
and local services.
9
The Ministry’s Support to
Training and Employment Programme for Women
(STEP) offers poor women over 16 years of age skills
training in fields such as agriculture, horticulture,
food processing, weaving and embroidery, travel
and hospitality, and computer/IT services.
10
■ NASSCOM launched the Women Wizards Rule
Tech program in June 2018 to encourage women
in senior management career tracks in tech to stay
the course.
11
“Things have to change,” Ghosh said
during NASSCOM’s annual conference in early
2018. “We have to check talented, capable women
dropping out.”
12
The program focuses on leadership
training and career development, and builds on
findings in the Women and IT Scorecard–India 2018
report produced by NASSCOM and The Open
University UK that flexible work, work-from-home,
parental leave, healthcare, and anti-harassment
policies could increase the number of women at the
senior level in IT firms. Nearly half of the companies
surveyed for the Scorecard reported doubling their
percentages of women in C-suite roles between
2012 and 2017, and 2017 forecasts from HR
managers indicated that nearly half of IT firms will
have more than 20% women at the C-suite level.
13
■ Wireless Women for Entrepreneurship and
Empowerment (W2E2) launched in 2014 in five
areas across northern and central India, to train
women as resources for other women at the village
level, focusing on skills, markets, and access to
public services in collaboration with a Google-
sponsored digital literacy program, Helping Women
Go Online (HWGO). W2E2 is an extension of an
earlier Wireless for Communities (W4C) program
created by the Digital Empowerment Foundation
(DEF) and the Internet Society (ISOC), to provide
low-cost, high-quality internet connectivity in
remote, unconnected and rural areas of India.
14
■ DEF’s SoochnaPreneur mobile entrepreneurship
program, with funding support from handset chip
manufacturer Qualcomm Inc., equips young rural
female and male “digital entrepreneurs” with
advanced wireless technologies and the MeraApp
mobile application developed by DEF so that
SoochnaPreneurs can both deliver much-needed
information about government entitlements available
to people in their communities and pursue their own
new entrepreneurial avenues to earn a livelihood.
15
■ The Internet Saathi program, rolled out in 2015 by
Google and the Tata Trusts recruits, trains, and funds
village women as ”saathis”—friends—who are trained
in using smart devices and navigating the internet.
Upon completion of training, each saathi is given a
tablet device, two smartphones for teaching, a power
source to keep the devices running during lessons,
and a bicycle to commute between villages so that she
can pass on that training to other women.
16
According
to a May 2019 interview with Google Chief Internet
68
Saathi Neha Barjatya, 58,000 Internet Saathis have
worked across 208,000 villages in 18 Indian states, and
the program has benefitted 22 million women.
17
■ In urban tech centers, PayPal India launched the
Recharge program in 2016 to help women who
have temporarily left their careers return to the
workforce. The program focuses on women with
tech backgrounds who have taken career breaks
of 1–5 years and have at least five years of work
experience in product development and analytics.
It offers opportunities to network with PayPal and
industry leaders, assistance with tools to get back
into the workforce, and training to get up to speed
with the latest industry technologies. Once the
program is completed, selected participants are
offered opportunities to work at PayPal’s offices in
either Chennai or Bangalore.
18
■ VMware launched a similar two-year program,
Project Taara, in December 2018 in partnership
with global non-profit Women Who Code. The data
storage, network and cloud computing firm plans
to offer free training to help 15,000 women in India
upskill over the next two years in diverse cloud
computing technology areas. Key industry partners
such as Bharti Airtel and Cognizant say they will
consider women certified in VMware solutions as
relevant IT openings become available.
19
■ The Bay Area-based Wadhwani Foundation, while
not specifically focusing on women, supports a
broad range of activities and programs in India
focused on creating and supporting entrepreneurs
through college courses, student start-up clubs,
mentorship, and other services connecting
entrepreneurs to the resources they need. It also
works with already established small businesses
with the potential to scale from the local to the
regional and national levels, providing advisory
and networking support. The foundation currently
works with more than 500 schools and institutions
across India and is active in thirty cities, with the
goal of expanding to fifty. An additional focus is on
teaching critical thinking, and other skills needed
for entrepreneurial success, below the high school
level, with approximately 6,000 schools currently
participating at the 9th–12th grade levels. While the
foundation’s programs don’t specifically focus on
women, its president Ajay Kela points out that 50%
of India’s college entrants are women and receive
the same support: “They are entering a world that
is very male dominated, with a male hierarchy. We
want to diversify and democratize that.”
20
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7
Healthcare/Life Sciences: Care in the Cloud
The Modi government plans to
double healthcare spending by
2025, to bring care quality up to
world-class standards, maintain
affordability, and push preventive
and wellness care out to underserved
rural areas.
Accessible, quality healthcare presents both a major
challenge and an opportunity for India. With demand
growing strongly, its healthcare sector—including
hospitals, medical devices, clinical trials, outsourcing,
telemedicine, medical tourism, health insurance, and
medical equipment—is expected to more than double in
size between 2017 and 2022, from $160 billion to $372
billion, according to IBEF. The hospital industry alone,
valued at nearly $62 billion in 2017, is forecast to average
16–17% compound annual growth during that period.
1
India’s healthcare delivery system is divided between
public and private components. The government
operates some 15,000 state hospitals
2
and a network of
rural primary healthcare centers (PHCs); most hospitals
in Tier I and II cities are privately run, with treatment
priced beyond the reach of average Indians.
3
The public
sector accounts for 30% of health expenditure in India,
with the remaining 70% paid by consumers—95% of
that out-of-pocket expenditures and just 5% paid by
insurance. More than half of out-of-pocket spending is
on medicines, with another 22% on hospital care, and
10% on diagnostic tests.
4
The uneven distribution of healthcare services and
lack of insurance forces many patients to use private
hospitals. Research by experts at the Public Health
Foundation of India, published in the British Medical
Journal in May 2018, shows self-funded healthcare
pushed as many as 55 million Indians below the poverty
line in 2011–12, with 38 million from spending on
medicines alone, driven in part by the rise of chronic
lifestyle diseases like cancer, diabetes, and heart
disease.
5
Extrapolated World Health Organization/World
Bank estimates in 2017 show 4–4.5% of the population,
or more than 50 million citizens, impoverished by
healthcare costs.
6
More than a dozen states provide low-
cost but inadequate insurance coverage; state hospitals
face frequent medicine and supply shortages,
7
sending
patients to more expensive private pharmacies.
In February 2018, the Modi government rolled out the
ambitious $1.7 billion National Health Protection Mission
(NHPM) to provide catastrophic hospitalization insurance
for 100 million poor and “vulnerable” lower-middle class
families—some 500 million Indians—and open 150,000
rural health and wellness centers focused on preventive
care.
8
The government has broadly committed to
increase overall health-related public spending from
1.15% of Indian GDP today to 2.5% by 2025.
9
70
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
In support of that broad mission, the government think
tank NITI Aayog (National Institution for Transforming
India) has unveiled plans for an integrated digital
healthcare information system, called the National
Health Stack (NHS), by 2022. NHS would digitize
personal health and service provider records across all
providers and make them accessible for secure, cloud-
based appointment, diagnostic, prescription, billing,
and other services via Aadhaar.
10
Preventive care is a priority. The Intensified Mission
Indradhanush (IMI) immunization program aims to
vaccinate 90% of pregnant women and children under
two years of age, with vaccines for diseases such as
tetanus, diphtheria, whooping cough, tuberculosis,
polio and measles.
11
A National Nutrition Mission
(NNM), in partnership with World Bank, will monitor
and supervise nationwide nutrition-related interventions
to reduce malnutrition, low birth weight, anemia, and
stunted growth.
12
With an expanding middle class, a growing elderly
patient population and government plans to provide
baseline insurance coverage, it is expected that doctor
visits, hospitalizations, affordable access to medicines,
and preventive care will all increase. New markets
are also opening up in areas like the $3 billion home
healthcare segment, which is expected to double to $6
billion by 2020.
13
The concept of digital health is critical to pushing
services out to currently underserved populations that
are often uninformed as healthcare consumers and
likely to forego medical visits due to cost concerns. In
some communities, distances to the nearest clinic and
the cost or logistics of arranging transportation can be
as daunting as the expected cost of care. An integral
part of the plan for rural clinics is affiliation with larger
hospital and physician networks and extensive use of
telemedicine support for checkups, consultations, and
diagnostic services.
14
By western standards, India benefits from both a large
pool of well-trained medical professionals and relatively
low healthcare costs. Compared to US prices, cost
savings for medical treatment can start from 65% and
go up to 90%, with patients receiving quality care.
15
An
aging population, high treatment costs, long surgery
wait times, and renewed uncertainty around insurance
coverage has increasingly driven US patients to explore
overseas options. India’s Minister of Tourism has
reported that the number of medical tourists in 2017
was as high as 495,000,
16
and the Ministry of Commerce
forecasts that the medical tourism segment will grow to
$9 billion by 2020.
17
India is widely viewed as a preferred destination for
cancer treatment, cardiovascular, spine and orthopedic
surgery, organ and bone marrow transplants, and in
vitro fertilization (IVF), as well as for wellness, preventive,
and alternative medicine.
18
Advanced care is available
through 34 hospitals accredited by Joint Commission
International (JCI), a US-based standards certification
group focused on healthcare quality and patient safety.
19
Patients from Africa and the Middle East travel to India
for premium private care unavailable at home. European
and US tourists come mainly for elective procedures not
covered by insurance, although US healthcare policy
changes weakening coverage have driven more patients
abroad for more serious surgery.
Pharmaceuticals
Generic drug development, production, and sales
account for 71%
20
of India’s $35 billion pharmaceutical
sector.
21
India boasts the world’s second largest
pharmaceutical and biotech workforce,
22
and the sector
posted 10% year-on-year growth in February 2019.
23
Growth is expected to accelerate with an expanding
middle class, improving medical infrastructure, and the
increased penetration of health insurance.
India is the world’s largest exporter of generic drugs,
to some 200 countries, with $17 billion in export sales
in 2017–18 and a 20% share of the global market.
24
India ranks number three as a market for active
pharmaceutical ingredients (APIs), number two in
abbreviated new drug applications (ANDAs) filed with
the US Food and Drug Administration to manufacture
generics for the US market, and number one in drug
master files (DMF) applications for FDA-certified
facilities, processes, and ingredients.
25
Significantly,
Indian compounding labs supply 40% of generic drugs
in the US market, where $55 billion in branded drugs
will come off patent over 2017–2019.
26
71
Healthcare/Life Sciences: Care in the Cloud
Trends
India’s pharmaceutical sector hit a low point in 2015,
when market growth and foreign investment collided with
a conflicted, inefficient regulatory framework. Indian drug
makers and research labs were scaling up to meet rising
domestic demand and compete globally. Meanwhile,
foreign multinationals were jumping into the market with
their own drugs going off-patent, and also using India as
a platform for clinical trials and low-cost development of
new treatments tailored to emerging markets.
This flood of activity strained research laboratory,
manufacturing, and distribution capacity. It also
overwhelmed regulators charged with enforcing quality
standards, approving new drugs and patents, and
licensing new lab facilities. India had 572 US Food
and Drug Administration (USFDA)-certified laboratory
and manufacturing facilities in 2017,
27
but that is out
of some 7,000 small and large pharma manufacturing
units nationwide, of which about 80% do not follow
the baseline global standard of the World Health
Organization’s good manufacturing practices.
28
Industry and regulators labor under three goals that
frequently come into conflict: 1) ensure product quality
and safety; 2) attract investment in treatment innovation
to move up the value chain; and 3) tightly control costs
and prices to keep out-of-pocket healthcare payments
affordable. India’s regulatory framework makes
balancing these goals extremely challenging for drug
and device manufacturers and for investors.
Contract research and compounding labs operate
on thin margins and compete on price under tight
deadlines, increasing the risk of compromised clinical
trial data and uneven quality in the manufacturing
process. Lab and manufacturing facilities are state-
regulated, by 36 state entities with varying levels
of resources and training. That has slowed license
approvals and weakened enforcement. A cumbersome
drug and patent approval process delays innovative
new drugs and treatments in getting to market; until it
introduced product patents in 2005, India had resisted
issuing pharmaceutical patents that it felt priced many
essential treatments out of reach in an emerging
market.
29
Drugs and devices deemed by the government
exhibit 23
India is the world’s largest exporter of generic drugs, to some 200 countries,
with $17 billion in export sales in 2017–18 and a 20% share of the global market.
0
$5
$10
$15
$20
FY18FY17FY16FY15FY14FY13
India’s Pharmaceutical Exports, Fiscal Years 2013–2018, US$ billions
$12.6
$14.5
$14.9
$16.9 $16.8
$17.3
National
Biopharma Mission
National Health Policy
Pharma Vision 2020
India’s Pharma-Related Government Initiatives
Source: India Brand Equity Foundation
72
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
to be “essential” to baseline care are subject to price
controls.
30
All of these constraints affect the interplay of
quality, safety, price, innovation, and add investment risk.
In response to quality concerns, there were 272 drug
facility inspections in 2015, and 50% of the US FDA’s
warning letters were issued to India.
31
Of the 42 warning
letters issued by the FDA’s Office of Manufacturing
Quality in 2016, nine (21%) went to Indian facilities.
32
In 2017, there were 192 inspections, while 29% of the
FDA’s warning letters went to India.
33
The state of Uttar
Pradesh reported in 2015 that, of 4,723 samples of drugs
seized in raids over a eight-month period, 506 were fake
and only 2,902 met quality standards for effectiveness.
34
A 2017 WHO report analyzing the results of tests
performed between 2007 and 2016 on 48,218 medicine
samples collected from 88 countries, including India,
found that 10.5% of the drugs were fake or substandard
in meeting the needs for which they were intended.
35
The Organization of Pharmaceutical Producers of
India (OPPI), a trade group, has called for the national
government, industry, and regulators to adopt and
enforce WHO Good Manufacturing Practices and quality
standards from sourcing to pharmacy shelf.
36
And for
manufacturers, there was good news in 2017 when
domestic pharma companies received more than 300
generic drug approvals from the US FDA, up 43% from
211 in 2016.
37
Government Initiatives
The Modi government is taking steps to address
industry concerns, in furtherance of its Invest India and
Make in India initiatives.
■ The Central Drugs Standard Control Organization
(CDSCO) is building a national digital database
consolidating licensing and company data, to track
supply chains of manufacturers and branded drugs,
from raw materials to final product.
38
■ A 2017 Ministry of Health notice requires state FDAs
and CDSCO to conduct bioequivalence studies—
confirming that generic and branded drug active
pharmaceutical ingredients (APIs) are equivalent
in composition—and has proposed requiring
bioavailability studies showing that branded and
generic APIs are absorbed into the system and take
effect similarly.
39
■ New CDSCO rules announced in 2018 are aimed at
reducing approval times for clinical trials applications
to 30–60 days.
40
■ The Drug Controller General of India (DCGI) has
proposed a “single-window facility” for startups and
new drug innovators to apply for drug approvals and
access central, state and local government services
and information in one place.
41
The Bay Area and India
The San Francisco Bay Area is home to a life sciences
industry cluster that is second only to the Boston-
Cambridge area, according to CBRE’s 2019 US Life
Sciences Clusters report.
42
According to the California
Life Sciences Association, Bay Area life sciences jobs
totaled 82,500 in 2018, up 15.7% from the previous
year, largely due to the region’s strong “nexus of tech
and biopharma.”
43
India presents significant opportunities for Bay Area
healthcare and life sciences companies. Some are
market-specific. For example, Bay Area molecular
diagnostics company Cepheid plans to manufacture
its Xpert MTB/RIF tuberculosis test cartridges in India.
India accounts for one-quarter of global TB cases, and
local production is expected to provide better access for
patients, reduce inventory costs, and improve shelf life.
In the last two years, over 1,200 of Cepheid’s GeneXpert
systems have been installed at sites managed by the
government’s Revised National Tuberculosis Control
Program (RNTCP).
44
Patients’ access to advanced cancer
care will also be increased by a partnership between
Palo Alto-headquartered Varian and Tata Trusts to install
radiation therapy treatment systems across India.
45
Big data analytics, another Bay Area strength, will
be critical to ramping up an insurance infrastructure,
digitizing patient records, and developing personalized
care through the National Health Stack and other means.
Hospital and clinic networks will need to redesign
facilities, develop new patient transportation options, and
73
Healthcare/Life Sciences: Care in the Cloud
integrate their supply chains for medicines, equipment
and basic supplies. Extending care to Tier II and III cities
and to rural areas in less affluent states will require new
forms of physical and digital infrastructure; low-cost
diagnostic, monitoring, telemedicine, and wellness
solutions will have huge potential to achieve scale quickly.
In this space, Verily, the life sciences arm of Google, is
working with India’s Aravind Eye Hospital to automate
and speed the process for diagnosing diabetic
retinopathy, a widespread in India, which can cause
blindness if untreated. India currently lacks the doctors
needed to screen the nearly 70 million diabetics
who are susceptible to the disease, with only 11 eye
doctors for every million people. Verily’s system will
use AI-based detection to increase testing speed and
expand screening.
46
Innovations in providing digital and low-cost service
in India, following India’s model of “lean innovation”,
have potential carry-over to the US and California
markets, where digitization has been slow and rising
costs have reached critical levels. One example is
New Delhi-based startup HealthCubed. The company
has developed a medical-grade device that provides
more than 40 measures and tests, including blood
pressure, electrocardiography, blood oxygenation,
heart-rate variability, blood sugar, blood hemoglobin,
and urine protein and is able to diagnose diseases
such as HIV AIDS, syphilis, dengue fever, and
malaria. These tests are the same as those provided
in hospitals, but at minimal cost, and with the data
immediately uploadable to the cloud for evaluation by
remote physicians.
47
Having such results immediately
can enormously benefit India’s rural health clinics,
but the market is potentially global. Silicon Valley’s
Latam Capital, which focuses on Latin America,
has invested,
48
along with Mexico’s largest pharma
company Grupo PiSA, which plans to take its services
into Latin America. By the end of 2019, it is estimated
that HealthCubed will have performed more than
100 million diagnostics, yielding a vast array of data
that can be analyzed using artificial intelligence. The
company plans to bring its technology to the US after
consolidating its worldwide base. Potential benefits
include access to a broad regimen of medical tests at
home, within minutes, and at costs of under one dollar.
Slow Progress in
Life Sciences Investment
Government is sending the right signals in promoting
digitization, funding R&D and facility quality upgrades,
working with states to enforce stricter standards,
streamlining advanced drug approvals, and easing
price controls. But across life sciences, progress remains
slow and traditional venture and private equity capital
are impatient. Expectations a decade ago that more
discovery research would be taking place in India
have not panned out. This has been for a number of
reasons: discovery research is still heavily concentrated
in the US and Europe, India is still more a domestic
and regional market (with a range of price controls),
and Indian companies are typically oriented toward
copying a drug that’s off-patent. As a result, investors,
entrepreneurs, and established companies are taking a
conservative, wait and see approach to India, says life
sciences investor Dr. Anula Jayasuriya. “In life sciences,
the focus is still on traditional hospital care, specialty
services, generics, and proven ‘me-too’ devices, and
on supplying the regional market. On new products,
there are only a handful of companies developing new
molecules, or even biologics and biosimilars.”
49
Despite hopes for rapid growth in the Indian life
sciences sector in 2005, Jayasuriya says, democratic
India has been viewed as a chaotic, uncertain market
relative to China, where the government can send
clearer market signals by directing research funding and
fast-tracking science park facilities. While conditions
have improved, confidence needs to be rekindled.
Jayasuriya was a co-founder and managing director
of the Evolvence India Life Science Fund (EILSFI),
established in 2007, a private equity fund which provided
growth capital to eight companies in healthcare delivery,
devices, and generics in India, among them Hyderabad
API manufacturer Neuland Labs and Gland Pharma, a
maker of small volume parenteral (SVP) solutions for
delivering medication. EILSF I exited its investments
in 2014 and launched a second fund, EILSF II, whose
healthcare investments include Oasis Centre for
Reproductive Medicine, an in vitro fertilization clinic
chain, and stent/catheter maker Relisys Medical Devices.
74
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
Life sciences investment today is largely focused
on private equity stakes in established public
companies or co-investment in acquisitions of
scalable companies that address significant unmet
needs. Exits are problematic, requiring patient
capital to scale companies for acquisition. Several
VCs have shed their India portfolios; others remain:
■ Sequoia Capital’s India healthcare portfolio
contains a diverse range of firms, among them
Akumentis Healthcare, a branded women’s health
generics manufacturer; Cloud Nine, a maternity
and neonatal clinic operator; rural hospital
network Glocal; cancer drug developer Mitra
Biotech; eye care and dental clinic chain Vasan
Healthcare; and contract drug discovery and
development firm Sai Life Sciences.
50
■ Healthcare investments by Accel Partners
include hemostatic device maker Axio
Biosolutions; dental practice management
SaaS developer CareStack; eye care screening
technology firm Forus Health; online medical
tourism search portal Medigo; in-home
healthcare provider Portea; and next-generation
oncology and immunology diagnostics drug
delivery device platform Sayre.
51
■ WestBridge Capital’s healthcare and life sciences
investments include diagnostic laboratory chain
Dr. Lal PathLabs.
52
spotlight
MedGenome
A Case Study in
Cross-Border Synergy
MedGenome Inc., headquartered in Foster City,
with offices and labs in Bengaluru, Delhi, and
Singapore, was founded in 2013 to provide a
range of genetic prenatal, pediatric, and oncology
diagnostic tests for clinicians and researchers
at pharmaceutical and biotech firms as well as
academic research centers.
A range of diagnostic tests is offered in India;
the Foster City lab facility offers sequencing
platforms, bioinformatics, computing, and
big data analytics.
1
India offers a diverse
population with more than 4,000 distinct
groups that have remained largely segregated
and homogenous over time, often leaving them
more susceptible to hereditary diseases. At the
same time, this enables researchers to more
readily isolate mutant genes that may cause
diseases.
2
The goal is non-invasive testing for
early discovery and treatment of cancer, heart
disease, diabetes, or genetic disorders passed
down from parents to their children.
MedGenome has raised $54 million, including a
$30 million Series C round in 2017 led by Sequoia
Capital Partners and Sofina SA, with participation
by Infosys co-founder Kris Gopalakrishnan and
former Cognizant CEO Lakshmi Naranayan.
3
75
8
Energy/Environment: Cleaner is Better
The vast scale of India’s needs and its
market potential in the energy and
environmental sectors is attracting
the notice of Bay Area companies
and laboratories, though the scale
of the connection is still small when
compared to the challenges India
faces and the investment they require.
The sheer scale of India’s energy and environmental
mitigation needs, the pressures of rapid economic
growth, and an increasing willingness to embrace new
ideas, are quietly turning the country into a laboratory for
clean technology. Change can’t come quickly enough.
Start with energy. India has the fifth largest power
generation capacity in the world and is the world’s
third largest generator of electricity,
1
behind China
and the US, with 350 gigawatts of installed generating
capacity in February 2019. Of that, 56.4% is from
coal-fired generation; 36.1% is from non-fossil fuel
sources including renewables (21.2%), hydro (13%) and
nuclear (1.9%).
2
But those numbers are deceptive: grid
inefficiencies—in particular the inability to adequately
store and distribute renewable power—result in a split
for electricity generated of 75% from coal and a little
over 20% from cleaner, non-fossil fuel sources. India
has little of its own oil or natural gas reserves, so those
sources account for less than 8% of utility capacity and
4% of power generation, mostly for industrial users.
3
Between 2000 and 2015, India’s electricity demand had
a compound annual growth rate of 6.9%, and that rate is
expected to be 5.4– 7.4% between 2015 and 2030.
4
From
a per capita perspective, this starts from a relatively low
base: while India represents 18% of the world’s population
it accounts for only 6% of global energy consumption.
5
To date, demand growth has been concentrated in urban
and industrial areas in already prosperous states.
A National Energy Policy draft, published by the
government think tank NITI Aayog (National Institution
for Transforming India) in 2017, estimated that some 304
million Indians still lack adequate access to electricity;
around 500 million rely mainly on coal, wood or biomass
for cooking and heating.
6
The Modi government, under
its “Electricity for All” initiative claims to have electrified
all of India’s 600,000 villages, but “electrified” is defined
as connecting public buildings and at least 10% of
residences to a grid or independent power source.
7
A Growing Need for Renewables
Despite vast coal reserves, India has in recent years
become a net coal importer. Indian coal, with its high
moisture and ash content, burns inefficiently; new
reserves are located in remote, forested areas that entail
high transportation costs and prohibitive environmental
76
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
impacts to extract and get to market—this at a time
when natural gas and solar costs have fallen. But the
main reason for shortages has to do with a 2014 ruling
by India’s Supreme Court cancelling more than 200 coal
mining licenses awarded to private companies without
a transparent, competitive bid process. Reallocation
of those licenses has been slow, leading to increased
imports at higher prices.
8
Hydropower has not been able to cover the shortfall;
new, larger projects over 25 MW have been stalled
by community jurisdictional disputes along rivers
where dams are planned, and by protests over
safety and environmental concerns. Previous to new
recommendations approved by the Cabinet Committee
on Economic Affairs in March 2019, large hydro projects
had not been eligible for the same power purchase
guarantees under medium-term contracts as solar or
wind projects, because the government had been
unwilling to classify large hydro as “renewable” and
banks were wary of lending to such projects due to
price risks from cost overruns and delays. Hydro-rich
states have maintained that, without renewable status
and easing of price controls on power, new projects
are uneconomical. The new hydropower policy now
allowing large projects to be declared as renewable
will make such projects more bankable, help tap
concessional green financing, and result in competitive
tariffs.
9
In 2017, the Ministry of Power had been looking
at soft loans and a lifting of price controls to bring down
development costs,
10
and the Ministry of New and
Renewable Energy has encouraged decentralized “small
hydro” projects up to 25MW,
11
funded either as wholly
private projects or as public-private partnerships. Still,
reviving hydro power growth in India after its slowdown
in the last decade will not come quickly,
12
and for the
long-term, the availability of new hydro resources at
scale and the output of existing hydropower projects
may be questionable due to effects of climate change
such as reduced rainfall and stream flows.
13
exhibit 24
The Modi government sees energy from renewable sources as the way forward.
Cleantech
Energy
Resource
Supply
Demand
Technologies
Fossil-fuel
Generation
►
Coal
►
Natural gas
►
Nuclear
►
Large hydro
Waste to energy
►
Incineration
►
Gasification
Renewables
►
Solar
►
Wind
►
Bioenergy
►
Geothermal
►
Small hydro
►
Marine energy
Water supply
►
Desalination
►
Purification
►
Distribution
►
Wastewater
treatment
Water
►
Management systems
►
Leak prevention/
detection
Advanced
materials
Energy efficiency
►
Industrial
►
Residential
Electric vehicles
►
Charging infrastructure
►
Vehicle-to-grid
Energy storage
►
Utility scale
►
Commercial
►
Residential
Smart energy
►
Smart grid
►
Smart meters
►
Demand mgmt
Internal combustion
vehicles
Liquid fuels
►
Oil
►
Petroleum
►
LNG
►
Coal to liquids
Clean Energy
The Clean Energy Transformation
Source: EY / Federation of Indian Chambers of Commerce & Industry (FICCI)
77
Energy/Environment: Cleaner is Better
With the government under pressure to fulfill its
promise of clean, reliable power nationwide by 2022,
14
renewable energy from solar, wind, and biomass
has looked increasingly attractive in recent years—
especially when taking into account climate change and
India’s severe environmental challenges from pollution.
One possible roadblock: India imports more than
90% of its solar cells and modules, mostly from China,
Malaysia, Singapore, and Taiwan.
15
In an effort to
support domestic manufacturers, the government
imposed a safeguard duty on imports of solar modules
and cells beginning July 30, 2018 at 25% for a first year
and then phased down in a second year to 20% in the
first half year and 15% in the second half. Domestic
manufacturers operating from special economic zones
(SEZs) must also pay the duty on the import of cells to
make modules.
16
According to solar consultancy Bridge
To India, after the duty was imposed, the amount of
solar modules manufactured in India rose from 500 MW
to 650–750 MW per quarter.
17
So far, the results of the safeguard strategy have been
mixed. With the duty in place, the cost of an imported
solar cell is about 12 cents and Indian manufacturers
have to compete by selling at that price too, even
through their input cost is 13.5 cents per cell. On the
other hand, Indian manufacturers using imported cells to
make solar modules have a cost of 25–27 cents, which
is the same as the price of imported Chinese modules
with the duty in place. In addition, because of the length
of project lead times, solar project developers can
simply wait to buy their component supplies until after
the safeguard duty has been phased down.
18
For their
part, solar developers have objected to the duty on the
grounds that it will raise tariffs and generally discourage
new solar projects, making it impossible to meet the
government’s target of 100 GW of electricity from solar
by 2022.
19
In addition to raising costs, the safeguard duty
has led to international trade disputes.
Where Energy and the
Environment Intersect
India’s decentralized industrial base of small, inefficient
manufacturers and slow rural development have
contributed to severe, widespread pollution. A May
2018 BBC analysis of World Health Organization data
counted 14 Indian cities among the world’s top 20
cities for air pollution;
20
a year later, IQ Air’s multi-
data-source AirVisual app showed a 15th Indian city
among the top 20 and 22 Indian cities among the top
30 world’s most polluted cites.
21
Delhi has inordinately
high average annual rates of particulate matter at both
the 2.5-micron (PM2.5) and 10-micron (PM10) levels,
22
which are leading contributors to health problems, from
heart disease and strokes to respiratory ailments and
lung cancer.
23
Causes of pollution include power plant
emissions, vehicle traffic, crop burning, construction
dust, and millions of dirty cook stoves and kerosene
lamps. Standards vary, but generally considered safe
limits have been 60 microns per cubic meter of air for
PM2.5 particulates and 100 for PM10;
24
levels in Delhi,
a metro area of 19 million people, reach 143 and 292
respectively,
25
and more during peak periods.
Climate change only amplifies India’s problems: In
May 2018 alone, thunderstorms, heavy winds, freak
dust storms, and lightning claimed 200 lives.
26
All
were attributed by meteorologists to a low-pressure
system and cyclonic disturbance related to climate
change.
27
Steadily rising temperatures across India,
reaching 116 degrees Fahrenheit (46.8 degrees Celsius)
in some places such as New Delhi,
28
have contributed
tounusual weather events.
Heat waves have taken a toll on India’s agricultural
sector, which accounts for 15% of GDP
29
but is the
primary source of livelihood for 58% of the population.
30
Eight in 10 farmers are smallholders with two hectares of
land or less, operating on thin margins growing wheat,
maize, rice, millets, sugarcane, and oilseeds. Climate
change is expected to cost Indian farmers 20–25% of
their income over the medium term. Among the short-
term solutions proposed are smart irrigation techniques;
centralized, large-scale food processing to prevent
waste; data-driven supply chain management; and crop
insurance reform.
31
More broadly, the Modi government sees energy from
renewable sources as the way forward. Even before
becoming Prime Minister, as Governor of Gujarat,
Modi had developed programs to deploy new energy
technologies. After taking office in 2014, the national
focus on renewables shifted to overdrive: Modi
78
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
announced the ambitious goal of adding 160 GW of
solar and wind energy to the existing 26 GW by 2022,
and a study was commissioned to explore how India’s
entire fleet of vehicles could be made 100% electric by
2030.
32
At the international level, India’s position shifted
from a stance that largely blamed developed countries
for climate change, to one that more aggressively
embraced the need for national commitments and
global agreements to address the challenge.
India’s 2015 Intended Nationally Determined
Contribution (INDC) under the Paris Agreement on
climate change builds on its goal of increasing installed
capacity of renewables to 175 GW by 2022 (up from
75 GW in early 2019
33
)—including 100 GW from solar,
60 GW from wind, 10 GW from biomass, and 5 GW
from small hydro power
34
—and commits to goals and
mitigation strategies that include
■ reducing greenhouse gas emissions per unit of GDP
(emissions intensity) by 33–35% from 2005 levels
by 2030 (following its earlier Copenhagen Accord
commitment of a 20–25% reduction by 2020);
35
■ achieving 40% cumulative electric power installed
capacity from non-fossil-fuel-based energy
resources by 2030, a goal dependent on the related
commitment to reach 63 GW installed capacity from
nuclear generation by 2032;
36
and
■ adopting a smart grid strategy, energy conservation/
efficiency programs, and stricter standards for LED
lighting, fans, industrial equipment, and buildings.
37
India is making progress on many energy and climate
change goals, but there are bottlenecks to be
overcome. In fiscal year 2017, India added 5.5 GW of
wind energy and exceeded its installed wind capacity
target, but the 5.5 GW of solar energy it added weren’t
enough to meet its solar target. The needed growth
has been impeded by slow progress on solar rooftop
installations, poor transmission infrastructure, and
lack of access to finance.
38
The renewable energy
capacity added in recent years has been very unevenly
distributed, with the vast majority concentrated only in
southern and western parts of India while the eastern
and northeastern parts received only about 10%.
39
Meanwhile, India’s LED lighting initiatives have been
highly successful, with LED streetlights installed across
23 states and Union Territories and the distribution of
230 million LED bulbs, 800,000 energy-efficient fans,
and 2.3 million LED tubelights cumulatively saving 32
billion kilowatt-hours of electricity and cutting carbon
emissions by 25 million tonnes a year.
40
The US Department of Energy pledged a matching
grant of $7.5 million toward smart grid and storage
development in 2017. A 3-to-1 match from India’s
Ministry of Science and Technology has brought
total funding to $30 million under the joint US-India
Partnership to Advance Clean Energy (PACE) program.
A cross-border team of universities, companies, grid
operators, and national laboratories—including
Lawrence Berkeley National Laboratory in the Bay
Area—are contributing their expertise to US-India
Joint Clean Energy Research and Development
Center (JCERDC) projects to research and deploy new
distributed energy resources such as microgrids and
energy storage.
41
A three-year energy action plan, and the follow-on draft
National Energy Policy released by NITI Aayog in 2017
reaffirms, refines, and updates the Paris Agreement
INDC. Together these two documents aim to
■ assure 24/7 electricity for all;
■ electrify cooking and vehicles, with mass adoption of
electric vehicles by 2030;
42
■ limit household propane tanks and extend City Gas
Distribution lines in 326 cities by 2022;
■ reform natural gas procurement and manage fuel
price differentials to ensure affordability; and
■ encourage decentralized small hydro and solar power
in rural areas for farm and residential uses.
43
In 2016, members of the Modi government articulated
the idea of making India a 100% electric vehicle nation
by 2030, but that vision became more modest as the
work of formulating specific EV policies got underway.
44
Nonetheless, the scale of India’s planned transition
to an electric, shared, and connected transportation
infrastructure, outlined in the government’s EV Mission
2030 and an earlier 2013 National Electric Mobility
79
Energy/Environment: Cleaner is Better
Mission Plan 2020, is bold. The goal of the National
Electric Mobility Mission Plan (NEMMP) is to achieve
sales of 6–7 million hybrid and electric vehicles year-
on-year from 2020 on, saving 60 million barrels of
mostly imported crude oil annually.
45
NITI Aayog has
encouraged state governments to achieve carbon
footprint targets through electrification of public
transport, and state transport corporations have already
introduced EVs into their fleets in Tier I cities.
46
In 2018,
Indian government officials cited a goal of at least 15%
of vehicles on the road being electric in the next five
years, with 30% targeted by 2030.
47
Achieving this, however, will require massive shifts, as
India has to date not been a leader in EV deployment.
According to McKinsey, only 2,352 electric vehicles
were sold in India in 2017, and fewer than 1,000
charging stations were installed. But the next several
years could see a changed landscape, as concerns
over air pollution grow and more stringent emission
standards take effect in 2020–21. The government’s
Energy Efficiency Services Limited agency recently
ordered 20,000 electric vehicles, and orders for electric
busses are growing. McKinsey believes that two- and
three-wheeled vehicles, luxury passenger vehicles, and
light commercial vehicles are a particularly promising
market, estimating that by 2030 battery-electric vehicle
penetration in those segments could reach 25–35%.
48
A plan approved by India’s cabinet in February 2019
to allocate $1.4 billion over three years to subsidize
the sale of electric and hybrid vehicles using advanced
batteries may accelerate the process.
49
India’s lithium-ion battery market is expected to see
33% compound annual growth between 2017 and
2030,
50
creating a $300 billion EV battery market.
51
That represents about two fifths of the global battery
demand, and NITI Aayog’s vision is that 25–40% of
that market can be captured via the “Make in India”
initiative. The government think tank also supports a
“feebate” incentive system of charges and rebates to
support the auto sector’s transition to mass production
of electric vehicles; inefficient vehicles would incur a
surcharge while efficient vehicles and shared mobility
solutions would receive a rebate.
52
In an effort to
support the growth of EVs in India, in July 2018 the
government reduced the goods and services tax
on lithium-ion batteries, from 28% to 18%, but it is
important to note that in February 2018 it raised import
duties on the batteries from 10% to 20%.
53
While progress is happening across many fronts, and in
solar and wind production in particular—India has moved
up to become the world’s fourth largest wind energy
producer
54
—some renewable areas are not advancing as
rapidly, pointing to both need and opportunity.
Pervasive Pollution
Bringing a nation of more than 1 billion people—with
at least 240 million still currently lacking access to
electricity
55
and 600 million people that have not known
indoor plumbing and sanitation
56
—into the modern
world is an engineering and cultural challenge in both
rural areas and cities.
India produces 62 million tons of solid waste annually,
of which about 80% is collected. Less than 30% of
that is treated or processed, according to the Ministry
of Environment, Forests and Climate Change.
57
Most
goes into landfills and open dump sites or is left on
the ground and eventually washed into drains and
rivers. Population growth, rapid urbanization, and rising
middle-class consumption will increase the volume of
solid waste five-fold by 2051, according to a 2016 paper
published by researchers at the Delhi-based Jamia Millia
Islamia university.
58
Every day, 2,000 tons of new trash are added to New
Delhi’s Ghazipur landfill, which is larger than 40 football
fields, 213 feet tall, and rising more than 30 feet per
year.
59
Similarly, Bengaluru generates at least 2,500 tons
of waste daily.
60
Frequent landfill fires and release of
methane gas exacerbate air pollution and related health
hazards. Encroaching development near landfill sites
exposes residents to skin and respiratory diseases, as
well as dysentery.
Using data from UNICEF and the World Health
Organization’s Joint Monitoring Programme, a ranking
of countries by number of people without access
to basic sanitation published by NGO WaterAid in
2017 placed India as the #1 worst, with 56% of the
population (more than 732 million) without such access,
80
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
even though the work of India’s Swachh Bharat (Clean
India) initiative has helped to place the country among
the top 10 showing most improved basic sanitation
access, with 52 million household toilets built between
2014 and 2017.
61
India’s sewage systems are meager and antiquated,
resulting in the excessive pollution of the country’s rivers.
The Central Pollution Control Board (CPCB) reported
to the National Green Tribunal in 2016 (the most recent
year of available data) that 63% of sewage flowing into
rivers daily is untreated in urban centers. Although the
CPCB directs states to set up sewage treatment plants
of adequate capacity, it reported that the 816 sewage
treatment plants spread across the country were capable
of processing only about 37.5% of the 62 billion liters of
sewage generated daily.
62
A $3 billion project to clean the River Ganga (Ganges),
a water source for 400 million people, has stalled over
land acquisition and an unwieldy bid process for new
treatment plants along the 1,570-mile river, and much
of the money has gone unspent. The National Mission
for a Clean Ganga (NMCG) gathered data in 2017
indicating that some 760 industrial sites and 118 cities
and towns dump 4.8 billion liters of sewage into the
Ganga daily.
63
Reuters reported in January 2019 that
existing treatment plants combined with additional
plants that the government has cleared for construction
will have the capacity to treat only 4.8 billion liters per
day, leaving 37.5% of the total still untreated.
64
Meanwhile, a general shortage of water, its uneven
distribution, and the threat posed by climate change
to water supplies originating in the Himalayas is raising
India’s focus on water management, bulk metering,
recycling, conservation, and groundwater recharge.
Trash for Cash
Experts agree that a mix of public education,
government incentives and regulatory enforcement,
household waste segregation, and application of new
technologies can mobilize ordinary Indians around a
centralized system of reuse, recycling, urban mining,
and waste-to-energy schemes that generate jobs and
profits. Such a mass mobilization is the focus of the
Swachh Bharat initiative, and progress, while slow, has
been steady and has yielded some interesting results:
■ Waste management startup Saahas Zero Waste
collects and sorts trash from tech parks, office
campuses, and housing complexes in Bengaluru
and Chennai, sells to various recyclers, and then
sells recycled products made from that waste.
Launched in 2013, Saahas is moving into to four
more cities, is branching out to include construction,
food processing, and other waste streams, and has
received angel and Series A funding to expand.
65
■ Workers go door-to-door in Mysuru (Mysore), a city
of 920,000, collecting separated compostable and
non-compostable waste and delivering it for sorting to
centers set up by residents or NGOs that cover their
costs through the sale of scrap and compost. About
a quarter of the 402 tons of waste produced daily in
the city is processed by the centers, and about half is
treated at a privately-operated fertilizer plant which is
subsidized by a central government grant and a waste
management levy attached to property taxes. Mysuru
charges an annual fee for the waste-to-fertilizer plant
and takes 5% of the finished compost as payment.
66
■ Vengurla, a town of 15,000 in the state of
Maharashtra adopted waste segregation at the
source to process 100% of the 7 tons of waste it
generates daily and converted its landfill to a waste
management park. The park hosts a biogas plant
which generates energy from wet waste, a briquette-
making plant that utilizes horticultural waste, a
segregation yard which sorts and recycles dry waste,
and a crusher unit that shreds plastic for use in road
building. The town earns about $2,000 a month from
processing its waste and also encourages reuse as
well as recycling.
67
Bay Area Laboratories and
Companies Address the Market
The vast scale of India’s needs and its market potential
in the energy and environmental sectors is attracting
the notice of Bay Area companies and laboratories,
though the scale of the connection is still small when
compared to the challenges India faces and the
investment they require.
81
Energy/Environment: Cleaner is Better
exhibit 25
India is on track to meet installed wind capacity goals but needs to pick up
the pace for solar.
India’s Year-on-Year Targets to Reach 100 GW Solar Goal and 60 GW Wind Goal by 2022, GW (Cumulative)
100
0
20
40
60
80
1.9
2013
100
82.5
65
48
32
17
12.3
6.8
2.9
2.4
202220212020201920182017201620152014
60
0
20
40
2013 202220212020201920182017201620152014
19
60
51.1
45
39.6
34.9
30.8
32.3
26.8
23.4
21.1
Targeted installed
wind capacity
Targeted installed
solar capacity
Actual installed
solar capacity
Actual installed
wind capacity
Note: All years are fiscal years: April 1 to March 31
Source: India’s Ministry of New and Renewable Energy (MNRE) analyzed by World Resources Institute
“The way renewables have been implemented in
California—how we integrate renewables into the
grid with smart metering, digital technology for
management of dispatch, storage—presents a big
opportunity for India,” explains General Electric South
Asia CEO Vishal Wanchoo. GE’s Hyderabad Technology
Centre (HTC), part of its Energy Engineering Division,
deploys a global engineering team of more than 700
in a hub dedicated to “exploration to utilization” of
energy, including grid software solutions, electronics,
embedded systems, and electromechanical design.
GE employs about 6,000 engineers in Bengaluru
and Hyderabad, developing energy efficiency and
performance improvements in electric locomotives, gas
and wind turbines, and grid solutions. The firm has 20
manufacturing facilities across India
68
and employs an
overall workforce of 20,000 of which more than 5,000
are engaged in research and development.
69
Wanchoo says GE’s commitment to India has translated
into increased sales with the Modi government’s
willingness to invest in new infrastructure and its
openness to foreign companies under the Make in
India initiative. In return, GE has integrated India
manufacturing output into its global supply chains,
transferring advanced manufacturing technology and
upgrading facilities, and has turned over management
control of certain product lines to its India teams.
Small firms and investors are also assessing
opportunities and placing bets.
Menlo Park VC firm Bessemer Venture Partners
(BVP) was an early 2009 investor in Applied Solar
Technologies (AST), a Delhi-based firm that provides
decentralized off-grid solar power to business
customers in sectors with networked assets such as
telecommunications towers and base stations or bank
ATMs that typically run off diesel generators. Successive
2010 and 2011 rounds of $21 million and $25 million
brought in the World Bank’s International Finance
Corp. (IFC) and Capricorn Investment Group, a Palo
Alto fund manager for the Skoll Foundation. A $40
million fourth funding round came in 2015, led by the
Australian government’s sovereign wealth fund, Future
Fund; BVP, IFC, and Capricorn participated. As of 2015,
AST had supplied distributed solar power at 4,000 sites,
including remote locations in Bihar, Jharkhand, Uttar
Pradesh, and Rajasthan.
70
Stanford graduates Sam Goldman and Ned Tozun
launched d.light in 2007 with a $250,000 prize from a
business plan competition. The San Francisco company
began with an original design solar-powered lantern
and now manufactures and sells low-cost solar lanterns,
chargers and microgrid solutions for homes and small
businesses in China, South Asia, and Africa. Its India
82
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
division is based in Gurgaon (Gurugram). Among
d.light’s investors over multiple funding rounds are the
Omidyar Network, Nexus Venture Partners, Mahindra
Group, DFJ, and Garage Technology Ventures.
71
Gram Power was formed in 2010 by UC Berkeley
engineering graduates Yashraj Khaitan and Jacob
Dickinson, under the mentorship of Berkeley professor
and Google vice president of infrastructure Eric Brewer.
The company has locations in Turlock, California
and Jaipur, Rajasthan. It installed India’s first solar-
powered smart microgrid in the tiny village of Khareda
in Rajasthan in 2012, providing energy for lights,
buttermilk machines, televisions, and fans. A Gram
Power microgrid offers reliable, solar-generated power
at a little over a third of the cost of kerosene and cell
phone charging for customers without conventional
grid supplies. Energy monitoring and smart metering
options allow customers to buy power on prepaid plans.
The company started with $80,000 in seed grants from
Alibaba, Intel, and UC Berkeley.
72
Bechtel Corp. has a strong presence in India of skilled
engineers who support Bechtel projects around the
world. Its wholly Indian subsidiary, Bechtel India Pvt.
Ltd., oversees global supplier and multi-project program
acquisition projects and is one of the company’s six
global contract execution units managing design,
procurement and construction for projects that
include the Reliance Jamnagar Refinery in Gujarat, the
Dabhol Power Project in Maharashtra and the Haldia
Petrochemicals Project in West Bengal.
73
Lawrence Berkeley National Laboratory’s International
Energy Studies (IES) Group has collaborated with
Indian government and industry for more than two
decades, providing technical and policy analysis on
power generation, appliances, industrial and building
energy efficiency, sustainable cities, and transportation.
The group has memoranda of understanding (MoUs)
with several government agencies in India that focus
on energy efficiency and demand-side management,
renewable energy, and grid planning.
74
Recent India
activity has included
■ studies of wind energy potential in India that revealed
a potential 20 times higher than previously thought,
and use of satellite mapping and imaging to identify
renewable energy zones for transmission planning;
■ analysis of the financial and emissions impact of grid-
connected renewable energy and energy efficiency
programs for India;
■ cost assessments for renewable energy grid
integration and its impact on transmission planning,
using state-level power flow models for optimal grid
dispatch and capacity expansion;
■ support in developing demand-side management
(DSM) regulations for state electricity regulatory
commissions in India, technical assistance in
designing upstream DSM incentives for super-
efficient appliances, and utility cost-benefit analyses
of efficiency measures; and
■ analysis of the impact of full electrification of
passenger vehicle sales (cars and two-wheelers) in
India by 2030, including ownership costs, additional
grid load from EV charging, power sector costs and
revenue, renewable energy grid integration, crude oil
imports, and greenhouse gas (GHG) emissions.
75
A number of specific initiatives grew out of a 2009
US-India bilateral agreement to accelerate joint clean
energy R&D, including a 2009 collaboration on energy
efficiency for commercial buildings and data centers,
a 2010 exchange with a visiting delegation of utility
regulators from 13 Indian states, and a 2011 study to
measure the impact of pollution on the effectiveness of
cool roofs.
In 2012, Lawrence Berkeley National Laboratory was
chosen under the PACE (Partnership to Advance Clean
Energy) program
76
to lead a joint US-India research
center focusing on energy efficiency technologies for
buildings—called the US-India Joint Center for Building
Energy Research and Development (CBERD)—under a
$5 million, four-year US DOE grant. Third-party partners
have included the California Energy Commission,
UC Berkeley, Honeywell, Infosys, Autodesk, the Bay
Area Photovoltaic Consortium, the City of San Jose,
HOK Architects, the Lighting Research Center, and
the Natural Resources Defense Council (NRDC). The
lead Indian institution is CEPT University (formerly the
Center for Environmental Planning and Technology) in
Ahmedabad.
77
The result has been a Building Innovation
Guide (BIG) that analyzes and recommends best
practices for the design, construction and operation of
83
Energy/Environment: Cleaner is Better
energy-efficient, high-performance buildings in India-
specific climate zones. BIG is being publicly launched in
the summer of 2019 at a series of events across five major
Indian cities: New Delhi, Mumbai, Bangalore, Trivandrum,
and Hyderabad. Participants will include US and Indian
government officials, researchers, and building industry
and cleantech companies. Presentations address
Government of India initiatives such as the India Cooling
Action Plan, the Energy Conservation Building Code,
advanced metering infrastructure rollout, the Energy
Storage Mission, and EV policy.
At the non-profit level, the Natural Resources Defense
Council (NRDC) has supported active programs in
India for more than ten years, with a particular focus
on renewable energy finance, jobs, and access. It
contributed to the development of the government’s
Solar Mission and supports a portfolio of projects
across India on cooling and energy efficiency (including
building efficiency, cool roofs, CFC reduction, and more
efficient air conditioners). A third, more recent focus
is on resiliency and how to address extreme heat, and
includes the Ahmedabad Heat Action Plan in Gujarat.
Initiated in 2013 as the first of its kind in South Asia and
supported by extensive scientific research, the annually
revised plan establishes an early warning system for
heat waves—coordinating interagency communication,
medical training, and public communication—with
a primary focus on slum communities and outdoor
workers. The Ahmedabad project also includes a
Cool Roofs initiative encouraging the installation of
roofs made from coconut husks and paper waste as
replacements for heat-trapping traditional tin and
asbestos roofs.
78
NRDC and its partner the Public Health
Foundation of India are ramping up efforts to scale the
Heat Action Plan initiative across India. In 2019, the
national government is working with 23 states and over
100 cities and districts to develop and implement heat
action plans.
79
Other areas of NRDC activity in India
include assistance with the development and adoption
of energy efficiency building codes and compliance
frameworks; Hyderabad launched a groundbreaking
online system for mandatory energy efficiency codes for
commercial buildings in 2017.
80
In the last five years, NRDC has also expanded its focus
on clean air, working on issues such as strengthening
air monitoring networks and regulatory compliance, the
adoption of electric vehicles—by helping to integrate
EV charging into grid and building codes—and the
development of scalable village-level clean energy
plans supported by links to private and government
programs. Partners include real estate developers—to
support changes to building codes aimed at net zero
energy use—and industry-supported initiatives such as
the Confederation of Indian Industry’s Green Building
Council. NRDC’s most significant collaborators, however,
are states, including Telangana, Gujarat, Maharashtra,
Karnataka, Tamil Nadu, Orissa, and West Bengal. NRDC
Senior Director, International Program–India Anjali
Jaiswal explains, “The national government sets the
policies, but the real impacts are at the state and city
levels where your partners are more directly responsible
to their constituents.”
81
84
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 26
“Smart cities add digital intelligence to the urban world and use it to solve
public problems and achieve a higher quality of life.”
Source: McKinsey Global Institute
Three layers of
“smartness”:
Traditional
infrastructure
(physical and social)
Adoption and usage
often leading to better
decisions and
behavior change
Smart applications
and data analysis
capabilities
The tech base includes
networks of connected
devices and sensors
Source: McKinsey Global Institute, “Smart Cities: Digital solutions for a more livable future”
85
9
Smart Cities: Order from Chaos
India launched a Smart Cities Mission
in 2015, targeting 100 cities for
infrastructure and services upgrades
with partial funding support. Some
2,993 projects worth about $20
billion were in play by early 2018.
As urbanization in India has accelerated, the process
has been chaotic, without effective planning for
infrastructure, transportation, waste, or water. A new
strategy to address these shortcomings may come
through smart cities. Smart cities mean different things
to different people and vary according to citizen needs
in different places. In a June 2018 report looking at the
objectives and approaches of 50 cities worldwide, the
McKinsey Global Institute characterizes them in this way:
”Smart cities add digital intelligence to existing
urban systems, making it possible to do more
with less. Connected applications put real-time,
transparent information into the hands of users to
help them make better choices. These tools can
save lives, prevent crime, and reduce the disease
burden. They can save time, reduce waste, and
even help boost social connectedness. When cities
function more efficiently, they also become more
productive places to do business.”
1
The concept of “smartness” begins with sensors,
scanners, connected devices, and high-speed, high-
capacity communications layered over existing urban
infrastructure to monitor systems and processes and
collect operating data in real time. To that is added
a layer of applications which enable access to, and
real-time analysis of, the transmitted data. A final layer
is user-driven: the critical mass of acceptance and
adoption that provides the catalyst for the widespread
changes in how individuals and the broader community
make decisions and change behaviors (see Exhibit 26).
India’s Plan
No other country has the scale of need for smart
city transformation—or the potential to benefit.
This presents both opportunities and challenges
at scale. McKinsey Global Institute has projected
that by 2030, Mumbai’s economy will be larger than
Malaysia’s, representing $245 billion in consumption,
and that India’s next four cities by market size (Delhi,
Ahmedabad, Hyderabad, and Bengaluru) will each have
annual consumption of $80 billion to $175 billion.
2
The
ability of these and other cities to grow efficiently and
sustainably will be critical to India’s ability to increase
economic productivity, improve equity, tap more deeply
into the country’s reservoirs of human capital, and
absorb both foreign and domestic investment. Planning
is a challenge; digital technology holds part of the
answer, but Indian cities have a long way to go.
Only three Indian cities—Jaipur, Pune, and Mumbai—
made the list of 50 cities around the world that a June
86
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
2018 McKinsey Global Institute report ranked according
to their deployment of smart cities technologies. On a
37-point scale in terms of their strength of technology
base—the extent of sensors and devices, the quality
of communications networks, and the presence of
open data portals—cities in Europe, the US, China
and East Asia are the most developed (with Singapore
achieving the highest score at 25 points), while cities in
Latin America and Africa lagged behind, and the three
Indian cities make up the bottom of the list with scores
ranging from only 2.7 to 8.8. In a second 55-point
scoring measuring each city’s progress in implementing
digital management applications for mobility, security,
healthcare, economic development, housing, and
community engagement, the three Indian cities did
somewhat better with scores of 19.5 (Jaipur) and 20
(Pune and Mumbai) in a field in which New York and
London ranked highest with 34.5 points and Lagos
ranked lowest with 13.5 points.
3
For its $15 billion Smart Cities Mission launched in
2015,
4
India’s Ministry of Housing and Urban Affairs
(MHUA) developed a comprehensive smart cities vision
for the country. Its objective is to “promote cities that
provide core infrastructure and give a decent quality
of life to citizens, a clean and sustainable environment,
and application of ‘Smart’ Solutions,” with a focus
on “sustainable and inclusive development.”
5
Core
infrastructure elements include
■ adequate water supply;
■ assured electricity supply;
■ sanitation, including solid waste management;
■ efficient urban mobility and public transport;
■ affordable housing, especially for the poor;
■ robust IT connectivity and digitalization;
■ good governance, especially e-governance and
citizen participation;
■ sustainable environment;
■ safety and security of citizens, particularly women,
children, and the elderly; and
■ health and education.
Urban design elements of a smart city under the
initiative include emphasis on more efficient mixed-use
development; inclusive housing; walkable communities;
preservation of open space; public transit, transit-
oriented development and last-mile paratransit for
children, the elderly, and disabled; online government
services with opportunities for increased citizen
engagement; and preservation of civic identity.
The government set an initial target of 100 cities
to receive funding support, with each to receive
approximately $72 million in federal money
6
over a five
year period, to be supplemented with funding from the
states and other investment sources.
7
As of mid 2018,
all 100 cities had been selected
8
in four qualifying
rounds
9
that began in early 2016. According to MHUA’s
annual report for the fiscal year ending in March 2018,
some 2,993 projects worth about $20 billion were
in play, of which 496 had begun work and 345 had
started tendering.
10
More than half of the cities have issued tenders for
development of integrated command and control
centers (ICCCs)
11
critical to managing data flows and
coordinating functions from solid waste collection to
traffic management to public CCTV systems. Global
technology companies, along with major domestic firms,
are responding. Centers in 10 cities—Ahmedabad,
Vadodara, Surat, Pune, Nagpur, Rajkot, Visakhapatnam,
Kakinada, Naya Raipur and Bhopal—are already
operational.
12
While most projects are still in varying
stages of completion, the initiative is producing results:
■ In Rajkot, CCTV surveillance lowered crime by 18%
over six months from October 2017 to April 2018,
including traffic violations, littering, and nighttime
burning of garbage.
13
■ Kakinada has deployed 6.2 km of fibre optic cable
along the core path, and is installing smart streetlights,
and access points for Wi-Fi and CCTV surveillance.
14
■ Pune has installed a flood warning and response
system and a network of 120 emergency police
callboxes.
■ In Ahmedabad, free Wi-Fi along transit corridors
increased ridership by 20,000 between February and
March 2018 alone.
15
87
Smart Cities: Order from Chaos
■ Vishakhapatnam (Vizag) has installed “smart
classroom” upgrades at 27 high schools and four
primary schools, and CCTV and GPS buses are being
tracked online.
16
■ In Bhopal, online payment has increased property tax
collections and the city is able to track its transport
services online.
17
How effective these initiatives will be at a national scale
is an open question, as past efforts to develop model
cities have foundered. Amaravati, the new capital
of Andhra Pradesh with a planned population of 3.5
million, may be a test case. Amaravati was ultimately
named the new capital of Andhra Pradesh after the
Telangana region around the former capital Hyderabad
separated from Andhra Pradesh and became a new
state in 2013. Since then, more than $3 billion in loan
pledges have been received from the World Bank,
Asian Infrastructure Investment Bank, and Indian state
and federal government agencies for the purpose of
creating Amaravati as a smart city from the ground up.
The goal is a technologically advanced city with online
government services, an underground power grid
with smart meters, and self-driving trams and buses.
Other new cities such as Gurugram (a suburb of New
Delhi formerly known as Gurgaon) have developed,
only to fall victim to poor planning and chaotic growth.
Amaravati could be different, however. The driving
force behind the city is the state’s chief minister N.
Chandrababu Naidu,
18
who helped make the state’s
previous capital Hyderabad a high tech hub and India’s
best city in terms of living standards.
19
The Bay Area and India
Given the local complexities, it is understandable
that most India smart city projects are still in their
early stages. Participation by foreign technology and
infrastructure companies has, to date, been limited to
master planning and establishment of ICCCs, important
first steps in the smart city process. Here, Bay Area firms
with deep roots in India have stepped in to help.
Hewlett Packard Enterprise (HPE) has partnered with
Siemens to set up the Bhopal ICCC, and has joined
Cisco along with Schneider Electric and Bhubaneshwar
Power to build the ICCC in Naya Raipur.
20
HPE has
also teamed with PwC on a center of excellence (CoE)
in Kolkata that will develop strategies, best practices,
and training for ICCCs nationwide. The Kolkata CoE,
launched in September 2017, brings together advanced
analytics and machine learning with HPE’s Universal
IoT platform to help municipalities achieve enhanced
civic engagement through effective connection and
information exchange across a diverse range of devices
and applications to coordinate and deliver secure digital
public services such as pollution monitoring, traffic
management, and intelligent waste management.
21
Cisco Systems opened its Cisco Smart City showcase
“campus-as-a-city” in Bengaluru in 2014, to highlight
how IoT technology and infrastructure can deliver
government services on demand via mobile devices;
enable smart streets and buildings, smart parking, and
smart meeting and work spaces; and connect users to
education, healthcare, and transportation.
22
In 2017, the
firm announced a $1 billion City Infrastructure Financing
Acceleration Program, with private equity investor
Digital Alpha Advisors and pension fund managers APG
Asset Management and Whitehelm Capital, to help
cities finance and deploy smart city improvements.
23
As of early 2017, Cisco’s smart city projects in India
numbered 14 (and counting), among them Varanasi in
Uttar Pradesh (in collaboration with Sunnyvale hybrid
cloud data services firm NetApp,
24
German technology
services firm Bosch, Austrian revenue collection and
intelligent transportation systems software developer
Efkon, and Mumbai-based IT solutions and big data
analytics specialists Rolta);
25
Nagpur in Maharashtra
state (with Mumbai engineering and technology firm
Larsen & Toubro);
26
and Shendra-Bidkin along the Delhi-
Mumbai Industrial Corridor (with Colorado engineering
firm CH2M).
27
Separately, NetApp signed a smart city
MoU with Karnal, in Haryana state, to provide data
storage and security services.
28
88
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 27
India’s Smart Cities Mission is a comprehensive vision to improve core
infrastructure and quality of life.
Source: Smart Cities Mission, Ministry of Housing and Urban Affairs, Government of India
89
10
Fintech: Data Puts Money to Work
The Modi government sees
mobile technology, fintech, and a
cashless society as key to financial
empowerment and business growth,
providing access for ordinary
Indians to credit, insurance, digital
payments, and e-commerce.
Advances in financial technology (fintech) will be central
to a rapidly growing Indian economy in coming years.
The G20 endorsed Financial Stability Board defines
fintech as “technologically-enabled financial innovation
that could result in new business models, applications,
processes, or products with an associated material effect
on financial markets and institutions and the provision of
financial services.”
1
As such, it touches every segment of
the economy and, importantly, is instrumental in fulfilling
the political promises of broader economic opportunity
and social inclusion.
Fintech is a relatively nascent sector in India but one
that has seen rapid acceptance and growth. It offers
convenient, affordable, and scalable solutions for
a largely informal, cash-driven economy with low
penetration rates for regulated banking and credit
services and inadequate credit history or screening
capability. Online startups bring competition and
innovative products to consumers and businesses,
particularly those not part of the legacy banking system,
and are forcing change in the offerings of traditional
banks and non-bank lenders.
Several important forces are converging in India’s fintech
sector to accelerate growth. In most major economies,
an entrenched, risk-averse, financial services industry
and fiscally conservative government policymakers
and regulators together resist financial innovation.
India, however, is a massive frontier market where 80%
of commercial transactions are in cash and a large
percentage of the population has no connection to the
banking system.
2
Small businesses, which constitute
80% of the retail outlets in India, largely operate in a
cash-driven informal economy and do not generate
the financial records needed to apply for bank loans,
forcing them to rely on the informal sector for credit at
very high interest rates.
3
A 2016 KPMG and NASSCOM
joint report on the growth of fintech in India noted
that the traditionally cash-driven Indian economy was
responding well to the fintech opportunity, primarily
triggered by the related surges in e-commerce and
smartphone penetration.
4
Technology is key to bringing more customers into
the financial system quickly, in furtherance of the
Modi government’s Pradhan Mantri Jan Dhan Yojana
(PMJDY) financial inclusion scheme to expand access to
financial and government services. Nearly 350 million
accounts have been set up,
5
allowing users to receive
90
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
exhibit 28
The Reserve Bank of India’s inter-regulatory Working Group on FinTech and
Digital Banking breaks down fintech into five principal categories.
Categorization of Major Fintech Innovations
Mobile/web payment Crowd-funding Smart contracts Robo advice Big data
Digital currencies Peer-to-peer lending Cloud compuring Smart contracts AI & Robotics
Distributed ledger Digital currencies e-Aggregators e-Trading
Distributed ledger
Payments, Clearing
& Settlement
Deposits, Lending &
Capital Raising Market Provisioning
Investment
Management
Data Analytics &
Risk Management
Source: Reserve Bank of India, Report of the Working Group on FinTech and Digital Banking, February 8, 2018
remittances, credit, insurance, and other services
digitally. Cashless transactions and instant mobile
links to financial information and government transfer
payments not only help fulfill the promise of PMJDY, but
also serve as an equalizer by making services instantly
available at low cost to anyone with a mobile phone.
The fintech sector is experiencing a unique convergence
of interests that point to rapid acceptance and growth,
offering an expanding customer base for incumbent
institutions, new opportunities for startups to quickly
launch and scale innovative products and services, and
increased market efficiency, transparency, economic
growth, and revenue for government. Among
consumers, India’s adoption rate for fintech services
is 87%, compared to the global average of 64%,
according to EY’s Global FinTech Adoption Index2019.
6
The Modi government is actively pushing digital
payments adoption by setting fiscal-year transactions
targets for banks and digital wallet companies. For the
year ending in March 2019, the target was 30 billion
digital transactions, with banks expected to achieve
23.7 billion and wallets given a target of 6.3 billion.
7
Overall, 90–95% of the FY 2019 target was met, and the
government set a new target of 40 billion e-transactions
for the year ending in March 2020. E-wallets saw rapid
growth after demonetization in 2016, and the Unified
Payments Interface (UPI) heated up and became key
to digital payments success
8
after the September 2018
Indian Supreme Court decision barring corporate
entities from accessing the Aadhaar database due to
concerns over privacy and security.
9
From its database of 13,000 startups worldwide
in 2019, fintech research and innovation platform
MEDICI identified 2,035 fintech startups in India,
working predominantly in the areas of payments,
lending, wealthtech (retail), personal finance
management, insurtech, regtech, and cybersecurity.
The majority of those companies are headquartered
in five cities–Mumbai, Bengaluru, New Delhi,
Gurugram, and Hyderabad—with Mumbai and
Bengaluru together accounting for 46%. The leading
fintech subsector is payments, which accounted for
18.4% of the fintech startups and attracted $708.9
million in venture capital and private equity funding
across 21 deals in 2018.
10
The combination of demonetization and regulatory
uncertainty took a toll on India fintech investment in
2016, with funding falling to just $388 million, compared
to $1.58 billion in 2015.
11
However, with demonetization
leading to the large increase in the number of
e-transactions managed by payments companies and
wallet providers,
12
in 2017 the situation reversed itself.
Accenture reported that fintech financing jumped to
$2.4 billion in 2017, a gain of more than 50% over the
high in 2015. Although most of that dollar amount was
due to a single $1.4 billion investment in Indian mobile
payment startup Paytm, overall India deal volume
grew by 65%,
13
suggesting a continuation in the trend
toward smaller deals. KPMG reported that in 2018 the
investment dollar amount attracted by Indian fintechs
decreased to $1.7 billion, but the number of deals
increased to 111, compared to 108 in 2017.
14
91
Fintech: Data Puts Money to Work
exhibit 29
Glossary of Fintech Services
Bharat Interface for
Money (BHIM)
A mobile app developed by the National Payments Corporation of India, based on the UPI,
which allows users to manage accounts and transfer funds between other UPI payment
addresses and between non-UPI accounts.
Block chain
technology
A distributed ledger of related steps in a transaction, each stored as a block in the transaction
chain. Blocks are added to a chain as they are completed and verified by the relevant parties,
and they cannot be modified afterward, allowing full, real-time transaction visibility among
the parties.
Centralized KYC/AML
Secure, standardized “know your client” and “anti-money laundering” protocols that streamline
customer onboarding, transaction monitoring, global anti-corruption compliance, and
audit processes.
Crowdfunding
A version of P2P lending in which borrowers solicit small donations from the public through a
web-based platform or social networking site, for a specific project, business venture, or
social cause.
Digital currencies
(DCs)
Digital representations of value issued by private developers and denominated in their own unit
of account (e.g., Bitcoin). DCs are obtained, stored, accessed, and transacted electronically
and are not denominated in a sovereign currency or issued or backed by a government or
central bank. Traded value is derived from agreement within the community of owners
exchanging them for sovereign currency or goods and services.
Digital wallet
An application linked to a lender or non-bank third party prepaid instrument that allows instant
P2P or commercial funds transfers without using bank or credit/debit card details.
Distributed ledger
(DL)
DL platforms provide complete, secure, automated transaction records, updated and verified by
users in real time, without third-party intermediation, enabling faster settlement time, simplified
reporting, reduced counterparty risk, and improved privacy and fraud protection.
E-Aggregators
Developers and curators of internet portals that enable retail customers to compare prices and
features of products like standardized insurance, mortgages, and deposit accounts.
Equity Funding
Services
Crowdfunding platforms specifically targeting early-stage business financing, in competition
with venture capital.
Peer-to-peer (P2P)
lending
P2P platforms connect lenders and borrowers, using analytics to evaluate borrowers and
expedite loan acceptance. They can connect individual lenders and borrowers or form lending
pools of institutional and individual investors which borrowers access online for personal or
small business loans.
Robo advice
Financial advice provided by automated money management services that use client
information and algorithms to develop automated portfolio allocation and investment
recommendations at lower cost by eliminating in-person financial advisors.
Smart contracts
Computer protocols that can self-execute, self-enforce, self-verify, and self-constrain the
performance of a contract.
Unified Payment
Interface (UPI)
A standardized interface developed by the National Payments Corporation of India (NPCI), an
association of credit issuers, providing mobile interoperability for merchant and P2P payments.
The UPI enables users to link bank accounts to mobile phone numbers and obtain a virtual
address for making and receiving payments.
Compiled by Bay Area Council Economic Institute
92
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
For its India Fintech Opportunities Review Report 2017–
18,
15
YES Bank surveyed some 600 fintech companies
in India, with added input from other fintech ecosystem
members such as investors, academic experts, and
incumbent banks. The resulting snapshot of the current
fintech landscape included the following observations:
■ 64% of companies surveyed have been operating for
three years or less; the median workforce size is 14
employees; 25% of founders are under 30 years old;
35% of founders are between the ages of 31 and 40;
■ 87% of founders identified employees focused on
technology development and coding as the core of
their workforces, with anywhere from a third to two-
thirds of the workers doing coding;
■ however, 71% of respondents cited lack of advanced
tech skills and knowledge in the local talent pool
as an impediment to growth, with many companies
increasingly relying on coders from Russia, Poland,
and Silicon Valley;
■ 71% of pre-revenue-stage and 81% of idea-stage
fintechs reported “severe difficulty” in raising funds;
only 11% received any proof-of-concept (PoC)
funding; 19% relied on industry partners to cover PoC
costs;
■ 79% of founders viewed incumbents in the
financial sector as partners, while 8% viewed
them as competitors;
■ 74% of respondents were participants in one or
more accelerator programs; and 85% cited PoC
development and commercialization as the top
reasons for enrolling in accelerator programs.
The Bay Area and India
Fintech saw a coming of age in the US following the
global financial crisis. Since then, the US has led fintech
development for more than a decade—with much of
that leadership coming from the Bay Area.
San Francisco Business Times research in 2015, at the
initial peak of fintech investment, revealed that the
top 50 Bay Area fintech firms employed a combined
workforce of 16,600, with nearly 10,000 working in digital
payment, 3,700 in personal finance and business financial
management, 1,600 in lending, and 1,300 in investment.
16
The Bay Area’s capacity in this field, and the active role
played by Bay Area VCs and angel investors, points to
another field of opportunity with India, where the shift
to digital payments promises to revolutionize India’s
economy, and in the process, transform the financial
sector. Credit Suisse forecasts that digital payments will
become a $1 trillion market in India by 2023.
17
Companies Make Inroads, but Some
FaceHeadwinds
With the government’s easing of banking regulations
to allow overseas companies greater leeway in setting
up wholly-owned subsidiaries,
18
the door has opened
to Bay Area financial service and fintech companies to
participate. Many are actively partnering with Indian
counterparts to reach the country’s growing, digitally-
enabled customer base.
In 2010, predating the Modi initiatives, Foster City-
based Visa partnered with UK mobile payments fintech
Monitise to offer mobile banking, bill payment, and
other services in India.
19
In 2014, it recruited about 120
network, product, and software engineers from eight
IIT campuses,
20
and followed up in 2015 by opening a
100,000-square foot-technology center in Bengaluru.
The objective: to open up Visa’s payment processing
network to application developers and eventually offer
payment solutions across a range of connected devices,
including mobile phones, PCs, tablets, and even cars. In
September 2015, Visa launched mVisa, a secure digital
commerce service—designed for banks, merchants, and
consumers in emerging markets—to enable consumers
to use a mobile phone app to transfer funds from their
Visa debit, credit, and prepaid accounts to pay bills
or stores and online merchants, or to send funds to
other Visa account holders. Initial trials were held in the
Bengaluru area, in cooperation with Axis Bank, HDFC
Bank, ICICI Bank, and State Bank India (SBI), with mVisa
made available to 20,000 merchants.
21
The government-endorsed unified payments interface
(UPI, see Glossary, Exhibit 29) launched by Indian
financial institutions gave retail users such as Jet Airways
and store chain Big Bazaar, as well as internet platforms
93
Fintech: Data Puts Money to Work
such as Facebook and Amazon, direct mobile access
to consumers. This, in turn, threatened the market
shares of card-issuers.
22
But mVisa was ultimately rolled
out as a QR-based product and specification, allowing
the scanning of merchants’ QR codes displayed as
a badge or sticker, and then pushing payment over
Visa’s network to the receiving merchant via the unified
UPI-based Bharat payments app (BHIM, see Glossary,
Exhibit 29),
23
without needing a separate UPI apps and
virtual payment addresses for different banks.
24
In early 2017, a single QR standard, BharatQR, was
launched across India, developed by Mastercard, Visa,
and the National Payments Corporation of India (NPCI),
with support from American Express and 14 national
banks.
25
By September of that year, Visa and Indian
electronic payments provider BillDesk announced that
they had successfully enabled 50 large service providers
for the BharatQR payments acceptance platform,
potentially reaching some 300 million consumers with
the simplified system that eliminates the need for
divulging card details at the point of sale. Customers
can simply log into the apps for their banks and scan the
sellers’ QR codes, enabling instant payment.
26
PayPal has offered cross-border remittance and other
payments in India for a decade, accounting for as much
as a third of India’s B2C export payments. In November
2017, the company launched domestic operations in
India, enabling merchants to process both local and
global payments and connecting them to PayPal’s
customer base of more than 200 million worldwide.
The company approached its domestic launch as
a value-added payment aggregator, with its India
implementation not allowing customers to store money
in their PayPal accounts.
27
At the time, the company already had around 2,500
engineers across four India campuses, as well as
an Indian call center subsidiary. Positioning itself
as a premium service provider, PayPal targeted the
e-commerce space with the hope of reducing cash-on-
delivery (COD) transactions, which accounted for about
60% of e-commerce transactions in India in 2017. While
its fees are higher, PayPal offers one-click payment,
which reduces check-out times, and buyer and seller
protection via a 180-day dispute settlement window,
covering refunds to buyers if sellers don’t send the
goods ordered and compensation to merchants if the
customer doesn’t end up paying for the goods. Among
the initial merchants signed up were MakeMyTrip, Yatra,
PVR Cinemas, BookMyShow, and FirstCry.
28
In April 2018, PayPal took a further step in simplifying
payments into India by digitizing the application process
for the foreign inward remittance certificate (FIRC),
which acts as a testimonial verifying that an individual or
business has received payment from outside the country
in a foreign currency. With the new digitized process,
Indian sellers or freelancers can apply for a FIRC and
pay the associated fee online, versus having to visit
a bank to complete a multi-step application process.
Previously, PayPal had cut its FIRC fee by 50% and
allowed consolidated FIRCs for multiple transactions.
29
Supporting these initiatives, the company launched
innovation labs within its Chennai and Bengaluru tech
centers in 2017 to upskill workers and build and refine
advanced technologies, including machine learning, AI,
and IoT.
30
In May 2018, PayPal teamed with Temasek
to acquire a $125 million minority stake in Pine Labs,
an Indian provider of digital point-of-sale devices and
customer interface and analytics services.
31
According
to data sourced from India’s corporate defense ministry,
PayPal reported $37 million in revenue generated by its
India payments subsidiary in 2018, a twelve-fold increase
from the $3 million generated the year before. The rise
has been attributed to the opening of the domestic
payments business, and the company has expanded its
Indian workforce and opened a new office in Mumbai.
32
Facebook, with 230 million users in India, began beta
testing its WhatsApp Pay service there in February
2018,
33
partnering with HDFC, ICICI and Axis Bank. The
UPI-based service was challenged early on by Indian
competitors, who argued that instead of building a
walled garden around payments, WhatsApp, a widely
used text messaging app across India, should be neutral
and fully interoperable with all payment services in
accordance with UPI policy. WhatsApp Pay was later
modified to send payments to any UPI account, and to
enable QR code scanning for non-UPI transfers.
34
The beta test attracted 1 million users
35
but full roll-out
has been delayed by a bureaucratic dispute involving
NPCI, the industry standards and implementing
94
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
group for the UPI interface; the Reserve Bank of India
(RBI); and the Ministry of Electronics and Information
Technology (MeitY). NPCI and RBI together grant
operating authority to digital payment services, but
MeitY has an advice and consent role because payments
are sent and received via IT infrastructure. At issue
are MeitY concerns about WhatsApp Pay’s customer
data storage policy, Facebook’s potential ability to
gain visibility on the payment behaviors of consumers,
whether WhatsApp Pay meets RBI’s two-factor ID
security requirements, and RBI jurisdiction to ensure
privacy of non-payment data.
36
RBI had further issued
new guidance in April requiring that payment data be
stored locally within India. And in August 2018, MeitY
made its approval contingent on WhatsApp opening
an office in India staffed by an India-specific team.
37
WhatsApp Pay’s full-scale launch remained stalled in the
first quarter of 2019, with Facebook saying that it had
complied with the local data storage requirement, but
RBI maintaining that the compliance was not complete
because the app was using only data mirroring (i.e.,
storing data copies) in India.
38
Google rolled out its Tez UPI-based mobile payments
service for India in September 2017. Partner banks
include Axis, HDFC, ICICI and SBI. Jet Airways, redBus,
and Dominos are among its merchant partners. Up
to 20 money transfers per day are permitted, up to a
combined limit of 100,000 rupees (about $1,425). The
app is supported in English, Hindi, Bengali, Gujarati,
Kannada, Marathi, Tamil, and Telugu.
39
A unique feature the Tez service offers is “audio
QR” (AQR), a technology that uses sounds for user
authentication in transferring funds. Lava, Micromax,
Nokia, and Panasonic sell phones with Tez pre-
loaded.
40
The service launched with bank-based
payments, followed up with the additions of bill
and utility payments as well as messaging, and was
rebranded as Google Pay in August 2018, at which
time Google reported 55 million downloads of the
app.
41
In early 2019, Google Pay reached the milestone
of 100 million installs and had received an average 4.5
rating in more that 1.6 million reviews on the Google
Play Store.
42
95
Notes
Introduction
1 Mukherjee, Rohan and Karthik Sivaram, “Trust and Leadership: The Art of the US-India
Nuclear Deal,” The Diplomat, July 17, 2018, https://thediplomat.com/2018/07/
trust-and-leadership-the-art-of-the-us-india-nuclear-deal/.
2 “Joint Statement on the Inaugural U.S.-India 2+2 Ministerial Dialogue,” US
Department of State, September 6, 2018, https://www.state.gov/r/pa/prs/
ps/2018/09/285729.htm
3 Ibid.
4 Ayres, Alyssa, “What Next for US-India Military Ties?”, Council on Foreign Relations,
September 7, 2018, https://www.cfr.org/article/what-next-us-india-military-ties.
5 Lawder, David and David Brunnstrom, “U.S. eases export controls for high-tech sales
to India: Ross,” Reuters, July 30, 2018, https://www.reuters.com/article/us-usa-trade-
india/u-s-eases-export-controls-for-high-tech-sales-to-india-ross-idUSKBN1KK1S8.
6 “Joint Statement on the Inaugural U.S.-India 2+2 Ministerial Dialogue,” US
Department of State, September 6, 2018, https://www.state.gov/r/pa/prs/
ps/2018/09/285729.htm
7 Pubby, Manu. “India Finalizing Proposal to Send Defence Teams to Silicon Valley”,
Economic Times, August 30, 2018, https://economictimes.indiatimes.com/
news/defence/india-finalising-proposal-to-send-defence-teams-to-silicon-valley/
articleshow/65601247.cms.
8 Johns Hopkins Center for Health Security, India-US Strategic Dialogue on Biosecurity,
Report on the Second Dialogue Session Held Between the United States and India,
May 2017, http://www.centerforhealthsecurity.org/our-work/events/2017%20India%20
Dialogue/Event%20Documents/India%20Dialogue%20FINAL%20May%2010%20
2017.pdf.
9 Mishra, Dr. Manoj Kumar, “The Indo-Pacific Thrust In The Indo-Strategis Partnership
And India’s Afghan Concerns–Analysis,” Eurasia Review, January 9, 2019, https://www.
eurasiareview.com/09012019-the-indo-pacific-thrust-in-the-indo-strategic-partnership-
and-new-delhis-afghan-concerns-analysis/.
Chapter 1
India’s Economy: Poised for Takeoff
1 “World Economic Outlook Update, January 2019: A Weakening Global Expansion,”
International Monetary Fund, January 2019, https://www.imf.org/en/Publications/
WEO/Issues/2019/01/11/weo-update-january-2019.
2 “DataBank: World Development Indicators: GDP (current US$),” The World Bank,
accessed April 4, 2019, https://databank.worldbank.org/data/indicator/NY.GDP.MKTP.
CD/1ff4a498/Popular-Indicators.
3 Beniwal, Vrishti, “India Overtakes France to Become World’s Sixth-Largest
Economy,” Bloomberg Business, July 11, 2018, https://www.bloomberg.com/news/
articles/2018-07-11/india-pips-france-to-become-world-s-sixth-largest-economy-chart.
4 “DataBank: World Development Indicators: GNI per capita, PPP (current international
$),” The World Bank, accessed April 4, 2019, https://databank.worldbank.org/data/
indicator/NY.GNP.PCAP.PP.CD/1ff4a498/Popular-Indicators.
5 Chakravarty, Praveen, “Has 70 Years of Redistribution From Rich States To Poor States
Worked?,” Bloomberg Quint Opinion, July 6, 2017, https://www.bloombergquint.
com/opinion/has-70-years-of-redistribution-from-rich-states-to-poor-states-worked.
6 “India’s per capita income grows by 8.6% to Rs 1.13 lakh in FY18,” The Times of India,
May 31, 2018, https://timesofindia.indiatimes.com/business/india-business/indias-per-
capita-income-grows-by-8-6-to-rs-1-13-lakh-in-fy18/articleshow/64403580.cms.
7 “To end poverty, we need $6000 per capita income: Raghuram Rajan,” The
Times of India, June 9, 2016, https://timesofindia.indiatimes.com/business/india-
business/To-end-poverty-we-need-6000-per-capita-income-Raghuram-Rajan/
articleshow/52646585.cms.
8 World Economic Forum and Bain & Company, “Future of Consumption in Fast-Growth
Consumer Markets: INDIA,” January 2019, http://www3.weforum.org/docs/WEF_
Future_of_Consumption_Fast-Growth_Consumers_markets_India_report_2019.pdf.
9 Beniwal, Vrishti, “India Overtakes France to Become World’s Sixth-Largest
Economy,” Bloomberg Business, July 11, 2018, https://www.bloomberg.com/news/
articles/2018-07-11/india-pips-france-to-become-world-s-sixth-largest-economy-chart.
10 The Economist Intelligence Unit (@TheEIU), Twitter post, February 5, 2018, 10:00
p.m., https://twitter.com/TheEIU/status/960755040985210886.
11 Trading Economics, “India–Labor force, total,” and “India Unemployment Rate”
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data.html and https://tradingeconomics.com/india/unemployment-rate.
12 Abrams, Corinne and Rosa de Acosta, “Modi’s World: See What India’s Economy Has
Done in Five Years,” The Wall Street Journal, April 22, 2019, https://www.wsj.com/
articles/modis-world-see-what-indias-economy-has-done-in-five-years-11555925401.
13 Woetzel, Jonathan, Anu Madgavkar,and Shishir Gupta, .“India’s Labor Market: A New
Emphasis on Gainful Employment,” McKinsey Global Institute, June 2015, https://
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14 Arora, Rohit, “Why India Is the Land of Rising Entrepreneurship,” Inc., January
27, 2015, https://www.inc.com/rohit-arora/why-india-is-the-land-of-rising-
entrepreneurship.html.
15 Rao, Aprameya and Kishor Kadam, “25 years of liberalisation: A glimpse of India’s
growth in 14 charts,” Firstpost, July 7, 2016, https://www.firstpost.com/business/25-
years-of-liberalisation-a-glimpse-of-indias-growth-in-14-charts-2877654.html
16 Friesen, Garth, “Politics, Productivity & Population: Why The Chinese Economy
flew and India’s Just Grew,” Forbes, March 21, 2019, https://www.forbes.com/sites/
garthfriesen/2019/03/21/politics-productivity-population-why-the-chinese-economy-
flew-and-indias-just-grew/#45e6b15d2e7d.
17 “Youth in India,” Central Statistics Office, Ministry of Statistica and Programme
Implementation, Government of India (Social Statistics Division), 2017, http://mospi.nic.in/
sites/default/files/publication_reports/Youth_in_India-2017.pdf.
18 “The World Factbook: South Asia: India,” US Central Intelligence Agency, https://
www.cia.gov/library/publications/the-world-factbook/geos/in.html.
19 Spindle, Bill, “‘The Youth Bluge’: India Struggles to Employ an Exploding
Population,” The Wall Street Journal, April 22, 2019, https://www.wsj.com/articles/
the-youth-bulge-india-struggles-to-employ-an-exploding-population-11555925401.
20 “DataBank: World Development Indicators: Educational attainment, at least
completed upper secondary, population 25+, total (%) (cumulative) (SE.SEC.CUAT.
UP.ZS),” The World Bank, accessed April 4, 2019, https://databank.worldbank.org.
21 “DataBank: World Development Indicators: Share of youth not in education,
employment or training, total (% of youth population) (SL.UEM.NEET.ZS),” The World
Bank, accessed April 4, 2019, https://databank.worldbank.org.
22 “India: Distribution of the workforce across economic sectors from 2007 to 2017”
World Bank data, Statista, 2019, https://www.statista.com/statistics/271320/
distribution-of-the-workforce-across-economic-sectors-in-india/.
23 “The IT-BPM Sector in India: Strategic Review 2017,” NASSCOM, February 2017,
http://old.nasscom.in/download/summary_file/fid/140426.
24 Woetzel, Jonathan, Anu Madgavkar,and Shishir Gupta, “India’s Labor Market: A New
Emphasis on Gainful Employment,” McKinsey Global Institute, June 2015, https://
www.mckinsey.com/~/media/McKinsey/Global%20Themes/Employment%20and%20
Growth/A%20new%20emphasis%20on%20gainful%20employment%20in%20India/
Indias-labour-market-A-new-emphasis-on-gainful-employment.ashx
25 “Skilling—Collaboration Towards Positive Systemic Change,”
UnLtdIndia, April 17, 2018, http://unltdindia.org/2018/04/17/
skilling-collaboration-towards-positive-systemic-change/.
26 Interview with Nisha Rajan, Senior Policy Coordinator, US-India Strategic Partnership
Forum (USISPF), Summer 2018.
27 Andres, Luis A. et al., “Precarious Drop: Reassessing Patterns of Female Labor Force
Participation in India,” World Bank Group, South Asia Region, Social Development
Unit, April 2017, http://documents.worldbank.org/curated/en/559511491319990632/
pdf/WPS8024.pdf.
28 “Women and Men in India,” Social Statistics Division, Central Statistics Office, Ministry
of Statistics and Programme Implementation, Government of India, 2018, http://www.
mospi.gov.in/sites/default/files/publication_reports/Women%20and%20Men%20%20
in%20India%202018.pdf
29 Shihabudeen Kunju S, “Men Outnumber Women In PhD Programmes In
Indian Universities,” NDTV, April 15, 2018, https://www.ndtv.com/education/
hrd-ministry-data-on-phd-more-male-candidates-pursue-phds-than-females-1837821.
30 “Women and Men in India,” Social Statistics Division, Central Statistics Office, Ministry
of Statistics and Programme Implementation, Government of India, 2018, http://www.
mospi.gov.in/sites/default/files/publication_reports/Women%20and%20Men%20%20
in%20India%202018.pdf
96
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
31 “Gender pay gap still high, women in India earn 19% less than men: Report,” The
Times of India, March 7, 2019, https://timesofindia.indiatimes.com/business/india-
business/gender-pay-gap-still-high-women-in-india-earn-19-less-than-men-report/
articleshow/68301331.cms.
32 Woetzel, Jonathan et al., “The Power of Parity: Advancing Women’s Equality in India.”
McKinsey Global Institute, November 2015, https://www.mckinsey.com/~/media/
McKinsey/Global%20Themes/Employment%20and%20Growth/The%20power%20
of%20parity%20Advancing%20womens%20equality%20in%20India/MGI%20India%20
parity_Full%20report_November%202015.ashx
33 Anand, Nupur, “India’s central bank just proved demonetisation was for
nothing,” Quartz India, August 29, 2018, https://qz.com/india/1373030/
modis-demonetisation-did-nothing-for-india-shows-rbi-report/.
34 “Why income tax payers in India are a small and shrinking breed,” Economic Times,
February 2, 2017, https://economictimes.indiatimes.com/news/economy/policy/why-
income-tax-payers-in-india-are-a-small-and-shrinking-breed/articleshow/56929550.
cms.
35 Kala, Anant Vijay, “This Was Supposed to Be India’s Big Year, but Businesses Aren’t
Investing,” Wall Street Journal, November 17, 2017, https://www.wsj.com/articles/
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36 Srivastava, Pragya, “Demonetisation effect! Direct tax collection rises dramatically
after 2016; here’s proof in 1 chart,” Financial Express, May 29, 2018, https://www.
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dramatically-after-2016-heres-proof-in-1-chart/1184986/.
37 Chancel, Lucas and Thomas Piketty, “Indian income inequality, 1992–2014: From
License Raj to Billionaire Raj?” WID.world Working Paper Series, No. 2017/11, World
Inequality Lab, July 2017 http://wid.world/document/chancelpiketty2017widworld/.
38 “India’s richest 1% get richer by 39% in 2018, just 3 percent rise for bottom half:
Oxfam,” The Economic Times, January 21, 2019, https://economictimes.indiatimes.
com/news/politics-and-nation/indias-richest-1-get-richer-by-39-percent-in-2018-just-3-
percent-rise-for-bottom-half-oxfam/articleshow/67618779.cms.
39 Knight Frank, “The Wealth Report 2019: 13th Edition,” 2019, https://content.
knightfrank.com/resources/knightfrank.com/wealthreport/2019/the-wealth-
report-2019.pdf.
40 Kazmin, Amy, “Budget sweeteners see India backtrack on financial
discipline,” Financial Times, February 1, 2018, https://www.ft.com/
content/55732a56-073e-11e8-9650-9c0ad2d7c5b5
41 National Judicial Data Grid (District and Taluka Courts of India), accessed May 16,
2019, http://njdg.ecourts.gov.in/njdgnew/.
42 Gupta, Arvind and Philip Auerswald, “The Ups and Downs of India’s Digital
Transformation,” Harvard Business Review, May 6, 2019, 350
Chapter 2
Trade and Investment: Flow Management
1 Woetzel, Johathan et al., “Outperformers: High-growth emerging economies and the
companies that propel them,” McKinsey Global Institute, September 2018, https://
www.mckinsey.com/featured-insights/innovation-and-growth/outperformers-high-
growth-emerging-economies-and-the-companies-that-propel-them.
2 World Integrated Trade Solution (WITS), “Trade Summary for India 2017”, World
Bank, accessed May 17, 2019, https://wits.worldbank.org/countrysnapshot/en/IND.
3 “World Trade Statistical Review,” World Trade Organization (WTO), 2018, https://
www.wto.org/english/res_e/statis_e/wts2018_e/wts2018_e.pdf.
4 Chakraborty, Subhayan, “Only 5 states account for 70% of exports, Economic Survey
shows,” Business Standard, January 29, 2018, https://www.business-standard.
com/budget/article/only-5-states-account-for-70-of-exports-economic-survey-
shows-118012900344_1.html.
5 Srivastava, Pragya, “Economic Survey 2018: Top 1% exporting firms account for
38% of exports, but it may not be a bad thing,” Financial Express, January 30, 2018,
https://www.financialexpress.com/economy/economic-survey-2018-top-1-exporting-
firms-account-for-38-of-exports-but-it-may-not-be-a-bad-thing/1036346/.
6 Arora, Isha, “India’s Trade Deficit Nearly Doubles To $87.2 Billion In FY18,”
Bloomberg | Quint, April 13, 2018, https://www.bloombergquint.com/
global-economics/indias-trade-deficit-nearly-doubles-to-872-billion-in-fy18.
7 Workman, Daniel, “India/s Top 10 Imports,” WorldsToExports.com (WTEx), May 4,
2019, http://www.worldstopexports.com/indias-top-10-imports/.
8 Workman, Danial, “India’s Top 10 Exports,” WorldsToExports.com (WTEx), April 5,
2019, http://www.worldstopexports.com/indias-top-10-exports/.
9 World Integrated Trade Solution (WITS), “Trade Summary for India 2017”, World
Bank, accessed May 17, 2019, https://wits.worldbank.org/countrysnapshot/en/IND.
10 “Services Trade Data,” Ministry of Commerce and Industry, Government of India,
2018, https://www.indiaservices.in/Service-Trade-Data.
11 Mehta, Pradeep S. and Sanjay Kumar Mangla, “Can India Double its Services
Exports in Five Years?” The Wire, October 27, 2017, https://thewire.in/business/
can-india-double-services-exports-five-years.
12 “Performance & Contribution towards Exports by IT-ITeS Industry,” Ministry
of Electronics & Information Technology, 2018, https://meity.gov.in/content/
performance-contribution-towards-exports-it-ites-industry.
13 “IT & ITeS,” India Brand Equity Foundation (IBEF), February 2018, https://www.ibef.
org/download/IT-ITeS-Repor-Feb-2018.pdf.
14 “India Imports By Country,” Trading Economics, 2017, https://tradingeconomics.com/
india/imports-by-country.
15 “India Exports By Country,” Trading Economics, 2017, https://tradingeconomics.com/
india/exports-by-country.
16 World Integrated Trade Solution (WITS), “India exports, imports and trade balance
By Country”, World Bank, accessed May 17, 2019, https://wits.worldbank.org/
CountryProfile/en/Country/IND/Year/2017/TradeFlow/EXPIMP/Partner/by-country.
17 “India: U.S.-India Bilateral Trade and Investment,” Office of the United States Trade
Representative, April 8, 2019, https://ustr.gov/countries-regions/south-central-asia/
india
18 Ibid.
19 Ibid.
20 “India Matters for America/America Matters for India,” East-West Center
and the Federation of Indian Chambers of Commerce and Industry (FICCI),
2017, https://www.eastwestcenter.org/system/tdf/private/indiamatters2017.
pdf?file=1&type=node&id=36245.
21 “USA Trade Online,” US Census Bureau, 2017, https://usatrade.census.gov/.
22 Meltzer, Joshua P. and Harsha Vardhana Singh, “Growing the U.S.-
India economic relationship: The only way forward,” Brookings, June
22, 2017, https://www.brookings.edu/blog/up-front/2017/06/22/
growing-the-u-s-india-economic-relationship-the-only-way-forward/.
23 “India Market Profile,” Visit California, March 2019, https://industry.visitcalifornia.com/
Research/Global-Market-Profiles-Landing/India-Market-Profile.
24 Schlappig, Ben, “Etihad Is Cutting San Francisco Flights in October 2017,”
One Mile at a Time (blog), June 14, 2017, https://onemileatatime.com/
etihad-discontinuing-san-francisco-flights/.
25 Aggarwal, Varun, “Flying high: Air India sees bookings to US double after laptop
ban,” January 15, 2018, https://www.thehindubusinessline.com/economy/logistics/
flying-high-air-india-sees-bookings-to-us-double-after-laptop-ban/article9614126.ece.
26 Awtaney, Ajay, “United will launch Delhi to San Francisco non-stop flights,” Live
from a Lounge (blog), December 13, 2018, https://livefromalounge.boardingarea.
com/2018/12/13/united-airlines-announces-delhi-san-francisco/.
27 “San Francisco Travel Reports Record Breaking Tourism Levels for 2018, Gives
Projections for 2019,” San Francisco Travel Association, 2018, https://www.sftravel.
com/article/san-francisco-travel-reports-record-breaking-tourism-levels-2018-gives-
projections-2019.
28 “California Global Ready India,” Visit California, 2018, https://industry.visitcalifornia.
com/-/media/PDFs/Presentations/California-Global-Ready-India.pdf.
29 US Citizenship and Immigration Services, “Characteristics of H-1B Specialty
Occupation Workers: Fiscal Year 2017 Annual Report to Congress, October 1,
2016–September 30, 2017,” US Department of Homeland Security, April 9, 2018,
https://www.uscis.gov/sites/default/files/reports-studies/Characteristics-of-Specialty-
Occupation-Workers-H-1B-Fiscal-Year-2017.pdf.
30 Baron, Ethan, “H-1B: Government reveals top reasons for visa delays in controversial
program,” The Mercury News, February 28, 2019, https://www.mercurynews.
com/2019/02/27/h-1b-government-reveals-top-reasons-for-visa-delays-in-
controversial-program/.
31 Balk, Gene, “More than half of Seattle’s software developers
were born outside the U.S.,” The Seattle Times, January
19, 2018, https://www.seattletimes.com/seattle-news/data/
more-than-half-of-seattles-software-developers-were-born-outside-u-s/.
97
Notes
32 US Citizenship and Immigration Services, “Characteristics of H-1B Specialty
Occupation Workers: Fiscal Year 2017 Annual Report to Congress, October 1,
2016–September 30, 2017,” US Department of Homeland Security, April 9, 2018,
https://www.uscis.gov/sites/default/files/reports-studies/Characteristics-of-Specialty-
Occupation-Workers-H-1B-Fiscal-Year-2017.pdf.
33 “India Country Commercial Guide: India—Trade Barriers,” US International
Trade Administration, October 10, 2018, https://www.export.gov/
article?id=India-Trade-Barriers.
34 Chakraborty, Subhayan, “India braces for Donald Trump’s reciprocal tax, may fight it
in WTO,” Business Standard, March 11, 2018, https://www.business-standard.com/
article/economy-policy/india-braces-for-donald-trump-s-reciprocal-tax-may-fight-it-in-
wto-118031000625_1.html.
35 Sampat, Bhaven N. and Kenneth C. Shadlen, “Indian pharmaceutical patent
prosecution: The changing role of Section 3 (d).” PLOS ONE, April 2, 2018, https://
doi.org/10.1371/journal.pone.0194714.
36 “India Takes First Step Toward Challenging U.S. Visa Policy At WTO,” National
Foundation for American Policy, March 10, 2016, http://nfap.com/wp-content/
uploads/2016/03/Inside-US-Trade.March-10-2016.pdf.
37 “H-1B, L-1 visa fee hike coul cost IT firms$400 mn per annum,” Financial
Express, December 18, 2015, https://www.financialexpress.com/industry/
us-doubles-fees-for-h-1b-l1-visas/180535/.
38 Baron, Ethan, “H-1B visa: government says work ban for H-4 spouses coming
this month,” The Mercury News, May 22, 2019, https://www.mercurynews.
com/2019/05/22/h-1b-visa-government-says-work-ban-for-h-4-spouses-coming-this-
month/.
39 Dimitropoulos, Stav, “Feeling the impact of Trump’s foreign worker squeeze,” BBC
News, May 22, 2019, https://www.bbc.com/news/business-48351811.
40 “H-1B Denial Rates: Past and Present,” National Foundation for American Policy, April
2019, https://nfap.com/wp-content/uploads/2019/04/H-1B-Denial-Rates-Past-and-
Present.NFAP-Policy-Brief.April-2019.pdf.
41 “United States Will Terminate GSP Designation of India and Turkey,” Office of the
United States Trade Representative, March 4, 2019, https://ustr.gov/about-us/
policy-offices/press-office/press-releases/2019/march/united-states-will-terminate-gsp.
42 Sarda, Pranit, “US snub to India has ‘minimal impact,” Forbes India,
March 13, 2019, http://www.forbesindia.com/article/leaderboard/
us-snub-to-india-has-minimal-impact/52783/1.
43 “United States Will Terminate GSP Designation of India and Turkey,” Office of the
United States Trade Representative, March 4, 2019, https://ustr.gov/about-us/
policy-offices/press-office/press-releases/2019/march/united-states-will-terminate-gsp.
44 “Trump terminates preferential trade status for India under GSP,” The Hindu
Business Line, June 1, 2019, https://www.thehindubusinessline.com/economy/trump-
terminates-preferential-trade-status-for-india-under-gsp/article27398318.ece.
45 Sarda, Pranit, “US snub to India has ‘minimal impact,” Forbes India,
March 13, 2019, http://www.forbesindia.com/article/leaderboard/
us-snub-to-india-has-minimal-impact/52783/1.
46 Horsley, Scott, “Trump Formally Orders Tariffs On Steel, Aluminum Imports,”
NPR, March 8, 2018, https://www.npr.org/2018/03/08/591744195/
trump-expected-to-formally-order-tariffs-on-steel-aluminum-imports.
47 Chakraborty, Subhayan, “India braces for Donald Trump’s reciprocal tax, may fight it
in WTO,” Business Standard, March 11, 2018, https://www.business-standard.com/
article/economy-policy/india-braces-for-donald-trump-s-reciprocal-tax-may-fight-it-in-
wto-118031000625_1.html.
48 Abraham, Rohan, “Trump’s plan to slap tariffs on steel and aluminium could affect
Indian manufacturers,” The Hindu, March 10, 2018, https://www.thehindu.com/
business/Economy/trumps-plan-to-slap-tariffs-on-steel-and-aluminium-could-affect-
indian-manufacturers/article23032560.ece.
49 Gowen, Annie, “India imposes retaliatory tariffs on U.S., widening global trade
war,” The Washington Post, June 21, 2018, https://www.washingtonpost.
com/world/india-imposes-retaliatory-tariffs-on-us-as-global-trade-war-
widens/2018/06/21/7c3a016b-1de0-497a-9635-a522bc55810a_story.
html?noredirect=on&utm_term=.2a4c120e28ce.
50 Reuters, “India Delays Levying Retaliatory Tafiff on U.S. Goods to June 16, The
New York Times, May 14, 2019, https://www.nytimes.com/reuters/2019/05/14/
business/14reuters-usa-trade-india.html.
51 “Quarterly Fact Sheet: Fact Sheet on Foreign Direct Investment (FDI) from April 2000
to December 2017, Department for Promotion of Industry and Internal Trade, Ministry
of Commerce and Industry, Government of India, February 21, 2018, https://dipp.gov.
in/sites/default/files/FDI_FactSheet_21February2018.pdf.
52 “Quarterly Fact Sheet: Fact Sheet on Foreign Direct Investment (FDI) from April, 2000
to March, 2017, Department for Promotion of Industry and Internal Trade, Ministry of
Commerce and Industry, Government of India, June 2018, https://dipp.gov.in/sites/
default/files/FDI_FactSheet_29June2018.pdf.
53 “Fact Sheet on Foreign Direct Investment (FDI) from April, 2000 to March, 2015,
Department for Promotion of Industry and Internal Trade, Ministry of Commerce and
Industry, Government of India, March 2015, https://dipp.gov.in/sites/default/files/
india_FDI_March2015_0.pdf.
54 “Quarterly Fact Sheet: Fact Sheet on Foreign Direct Investment (FDI) from April,
2000 to December, 2018,” Department for Promotion of Industry and Internal Trade,
Ministry of Commerce and Industry, Government of India, March 2019, https://dipp.
gov.in/sites/default/files/FDI_Factsheet_12March2019.pdf.
55 Abrams, Corinne and Debiprasad Nayak (WSJ), “With a banner year for deals, India
overtakes China as a favoured target,” Business Standard, December 26, 2018,
https://www.business-standard.com/article/economy-policy/with-a-banner-year-for-
deals-india-overtakes-china-as-a-favoured-target-118122600070_1.html
56 “FDI Annual Issue 2017, Chapber 1.3.A.iii,” Department for Promotion of Industry and
Internal Trade, Ministry of Commerce and Industry, Government of India, n.d., https://
dipp.gov.in/sites/default/files/FDI_AnnualIssue_2017_Chapter1.3.A.iii_.pdf
57 Ibid.
58 “About FDI in India,” India Brand Equity Foundation,” April 2019, https://www.ibef.
org/economy/foreign-direct-investment.aspx
59 Ibid.
60 Ibid.
61 Rossow, Richard M., “India’s FDI Reforms Under Modi: Once a Fountain, Now a Drip,”
Center for Strategic and International Studies, August 15, 2017, https://www.csis.org/
analysis/india’s-fdi-reforms-under-modi-once-fountain-now-drip.
62 “World Investment Report 2018,” United Nations Conference on Trade and
Development (UNCTAD), 2018, https://unctad.org/en/PublicationsLibrary/
wir2018_en.pdf.
63 “World Investment Report: Annex Tables,” United Nations Conference on Trade
and Development, June 2018, https://unctad.org/Sections/dite_dir/docs/WIR2018/
WIR18_tab02.xlsx.
64 Bhattacharya, A.K., “FDI outflows: Mauritius is India’s largest overseas investment
destination,” Business Standard, May 2, 2017, https://www.business-standard.com/
article/economy-policy/fdi-outflows-mauritius-is-india-s-largest-overseas-investment-
destination-117043000425_1.html.
65 “Foreign direct investment (FDI) from India in the United States from 2000 to 2017
(in billion U.S. dollars, on a historical-cost basis),” Statista, 2019, https://www.statista.
com/statistics/188940/foreign-direct-investment-from-india-in-the-united-states/.
66 “Foreign Direct Investment,” 2018 e-Handbook of Statistics, United Nations
Conference on Trade and Development, December 5, 2018, https://stats.unctad.org/
handbook/EconomicTrends/Fdi.html.
67 “Foreign Direct Investment (FDI): India,” SelectUSA, US Department of Commerce,
May 2019, https://www.selectusa.gov/servlet/servlet.FileDownload?file=015t0000000
LKMV
68 “India’s IT giants Are Investing And Acquiring To Catch Up With Trends In Cloud,
AI, And Automation,” CB Insights, October 27, 2017, https://www.cbinsights.com/
research/india-it-investments-acquisitions/.
69 “Infosys invests $15. million in Waterline Data Science,” Livemint, March 22, 2018,
https://www.livemint.com/Companies/Ahb1cBGV1lPgYw4ud3mDWO/Infosys-invests-
15-million-in-Waterline-Data-Science.html.
70 “Infosys Makes Additional Investment of US$1.5 million in TidalScale Inc.,” Infosys
press release, September 17, 2018, https://www.infosys.com/newsroom/press-
releases/Pages/investment-software-defined-server-revolution.aspx.
71 Mendonca, Jochelle, “Wipro invests undisclosed amount in Tradeshift,” The
Economic Times, January 30, 2017, https://economictimes.indiatimes.com/tech/ites/
wipro-invests-undisclosed-amount-in-tradeshift/articleshow/56875328.cms.
Chapter 2 Spotlight
Trade Opportunities: Follow the Money
1 “India: U.S.-India Bilateral Trade and Investment,” Office of the United States Trade
Representative, April 8, 2019, https://ustr.gov/countries-regions/south-central-asia/
india
98
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
2 “Modi, Obama target $500 billion India-US trade,” The Times of India, October 1,
2014, https://timesofindia.indiatimes.com/business/india-business/Modi-Obama-
target-500-billion-India-US-trade/articleshow/43974713.cms.
3 “India’s economy: Why the time for growth is now,” McKinsey Global
Institute, September 2016, https://www.mckinsey.com/featured-insights/india/
indias-economy-why-the-time-for-growth-is-now.
4 Puri, Prof. Sandeep and Brij Mohan Taneja, “Food Retailing In India—The Way
Forward,” Progressive Grocer India, February 13, 2018, https://www.indiaretailing.
com/2018/02/13/food/food-grocery/food-retailing-india-way-forward/.
5 “Connecting fram and industry: Through value Chain empowerment,” EY and
ASSOCHAM, 2018, https://www.ey.com/Publication/vwLUAssets/ey-connecting-farm-
and-industry/$File/ey-connecting-farm-and-industry.pdf
6 Rais, M. and A. Sheoran, “Scope of Supply Chain Management in Fruits and
Vegetables in India,” Journal of Food Processing and Technology 6:427.
doi:10.4172/2157-7110.1000427, February 23, 2015, https://www.omicsonline.
org/open-access/scope-of-supply-chain-management-in-fruits-and-vegetables-in-
india-2157-7110-1000427.pdf.
7 Singh, Joginder, “India is self-suffieicnt, but millions go hungry,” The Pioneer, October
3, 2016, https://www.dailypioneer.com/2016/columnists/india-is-self-sufficient-but-
millions-go-hungry.html.
8“India Country Commercial Guide: India—Healthcare,” US International
Trade Administration, October 10, 2018, https://www.export.gov/
article?id=India-Healthcare-and-Medical-Equipment.
9 Chakraborty, VMS, and Sohini Das, “Import of medical devices from US on the rise;
here’s all you need to know,” Business Standard, June 11, 2018, https://www.business-
standard.com/article/companies/import-of-medical-devices-from-us-on-the-rise-here-
s-all-you-need-to-know-118061000756_1.html.
10 “India Country Commercial Guide: India—Energy,” US International Trade
Administration, October 10, 2018, http://apps.export.gov/article?id=India-Energy.
11 “India and U.S. collaborate to expand renewable energy grid,” Wisconsin
Economic Development Corporation, October 1, 2017, https://wedc.org/export/
market-intelligence/posts/india-u-s-collaborate-expand-renewable-energy-grid/.
12 Singh, Rajesh Kumar and Anindya Upadhyay, “With 1 million homes still in the dare,
Modi government misses power goal,” The Economic Times (by Bloomberg), January
1, 2019, https://economictimes.indiatimes.com/industry/energy/power/with-1-million-
homes-still-in-the-dark-modi-government-misses-power-goal/articleshow/67332253.
cms.
13 Sharma, Kiran, “Three years in, India’s smart city program has a long way to go,”
Nikkei Asian Review, July 4, 2018, https://asia.nikkei.com/Spotlight/Cover-Story/
Three-years-in-India-s-smart-city-program-has-a-long-way-to-go.
14 “Smart Cities,” Economic Diplomacy Division, Ministyr of External Affairs, Govt. of
India, May 2017, https://www.eoilisbon.gov.in/business_files/Smart%20Cities%20
Project.pptx.
15 Seetharaman, G., “Smart Cities Mission is still very much a work in progress post
three years of its launch,” The Economic Times, June 9, 2018, https://economictimes.
indiatimes.com/news/economy/infrastructure/smart-cities-mission-is-still-very-much-a-
work-in-progress-post-three-years-of-its-launch/articleshow/64523035.cms.
Chapter 3
The Bay Area Indian Community:
A Cross-Border Success Story
1 “Chapter VII: Country of Birth of the Foreign-Born Population, 1910 Census: Volume
1. Population, General Report and Analysis,” United StatesCensus Bureau, April 1915,
https://www2.census.gov/library/publications/decennial/1910/volume-1/volume-
1-p11.pdf.
2 “18991922: Arrival & Early Years, Pioneering Punjabis Digital Archive,” UC Davis and
Punjabi American Heritage Society, 2016, http://pioneeringpunjabis.ucdavis.edu/
eras/1899-1922/
3 “Echoes of Freecom: South Asian Pioneers in California, 1899–1965: Chapter 6: At the
University,” Berkeley Library, University of California, May 13, 2019, http://guides.lib.
berkeley.edu/echoes-of-freedom/chapter6.
4 “Echoes of Freecom: South Asian Pioneers in California, 1899–1965: Chapter 7:
Gadar,” Berkeley Library, University of California, May 13, 2019, https://guides.lib.
berkeley.edu/echoes-of-freedom/chapter7.
5 “Echoes of Freecom: South Asian Pioneers in California, 1899–1965: Chapter 13: A
New Beginning,” Berkeley Library, University of California, May 13, 2019, https://
guides.lib.berkeley.edu/echoes-of-freedom/chapter13.
6 Newton, Benita, “Paten Name Has Long History of Success In Hospitality,” Hotel
Online, July 19, 2004, https://www.hotel-online.com/News/PR2004_3rd/Jul04_
PatelHotel.html.
7 “School of Hospitality Leadership Exhibits at AAHOA Conference,” East Carolina
University College of Business, October 31, 2018, https://blog.ecu.edu/sites/cob/
blog/2018/10/31/school-of-hospitality-leadership-exhibits-at-aahoa-conference/
8 Saxenian, AnnaLee, “Silicon Valley’s New Immigrant Entrepreneurs,” Public Policy
Institute of California, 1999, https://www.ppic.org/content/pubs/report/R_699ASR.
pdf.
9 Ibid.
10 Wadhwa, Vivek, AnnaLee Saxenian et al., “America’s New Immigrant Entrepreneurs,”
Master of Engineering Management Program, Duke University; School of Information,
UC Berkeley, January 4, 2007, http://people.ischool.berkeley.edu/~anno/Papers/
Americas_new_immigrant_entrepreneurs_I.pdf.
11 Anderson, Stuart, “Immigrants and Billion-Dollar Startups: NFAP Policy Brief, October
2018,” National Foundation for American Policy, 2018, https://nfap.com/wp-content/
uploads/2019/03/2018-BILLION-DOLLAR-STARTUPS.NFAP-Policy-Brief.2018.pdf.
12 Zong, Jie and Jeanne Batalova, “Indian Immigrants in the United States,” Migration
Policy Institute, August 31, 2017, https://www.migrationpolicy.org/article/
indian-immigrants-united-states#Distribution_by_State_and_Key_Cities.
13 “50201 Selected Population Profile in the United States, 2017 American Community
Survey 1-Year Estimates, American Fact Finder, US Census Bureau, accessed May
28, 2019, https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.
xhtml?pid=ACS_17_1YR_S0201&prodType=table.
14 “U.S. Immigrant Population by Metropolitan Area” India Region of Origin,
2013–2017, Migration Policy Institute (MPI) Data Hub, accessed May
28, 2019, https://www.migrationpolicy.org/programs/data-hub/charts/
us-immigrant-population-metropolitan-area.
15 Zong, Jie and Jeanne Batalova, “Indian Immigrants in the United States,” Migration
Policy Institute, August 31, 2017, https://www.migrationpolicy.org/article/
indian-immigrants-united-states#Distribution_by_State_and_Key_Cities.
16 Ibid.
17 “Places of Origin,” Research and Insights>Open Doors.Data>International Students,
Institute of International Education, 2019, https://www.iie.org/Research-and-Insights/
Open-Doors/Data/International-Students/Places-of-Origin.
18 “Chapter 3: Science and Engineering Labor Force,” Science & Engineering
Indicators 2018, National Science Board, January 2018, https://www.nsf.gov/
statistics/2018/nsb20181/report/sections/science-and-engineering-labor-force/
immigration-and-the-s-e-workforce.
19 Kably, Lubna, “In US, Indian STEM students bag 56% of job training slots,” The Times
of India, October 28, 2018, https://timesofindia.indiatimes.com/india/in-us-indian-
stem-students-bag-56-of-job-training-slots/articleshow/66407588.cms.
20 Nanda, Prashant K., “Flow of Indian students to US grows at three-year low of
12.3%,” Live Mint, November 14, 2017, https://www.livemint.com/Education/
qOxYg1Znfra2qRMRmr6JZP/Indian-students-flow-to-US-grew-by-12-a-threeyear-low.
html.
21 “Dramatic drop in F-1 visa student applications from India to the US, says
survey,” News India Times, March 16, 2017, http://www.newsindiatimes.com/
dramatic-drop-in-f-1-visa-student-applications-to-the-us-says-survey.
22 Ibid.
23 “2018 Fact Sheet: California,” Open Doors, International Educational Exchange, 2018,
https://www.iie.org/Research-and-Insights/Open-Doors/Fact-Sheets-and-Infographics/
Data-by-State-Fact-Sheets.
24 “International Student Enrollment,” UC Berkeley International Office, Fall 2017,
https://internationaloffice.berkeley.edu/sites/default/files/student-statistics2017.pdf.
25 “Stanford University International Student Report: India,” College Factual,
2017, https://www.collegefactual.com/colleges/stanford-university/student-life/
international/.
26 “University of California–Davis International Student Report,” College Factual, 2017,
https://www.collegefactual.com/colleges/university-of-california-davis/student-life/
international/.
27 Ward, Jay, “International Student Statistical Summary, Fall 2017 (Final), Office of
International Programs, San Francisco State University, 2017, https://oip.sfsu.edu/
sites/default/files/OIPstatistics/FA17_statistics.pdf.
99
Notes
28 “Berkeley India Conference 2017,” Institute for South Asia Studies, UC Berkeley,
2017, http://events.berkeley.edu/index.php/calendar/sn/csas?event_ID=110989.
29 “3rd US-India Conference, 07 September 2018, UC Berkeley, California, USA,” All
India Management Association, 2018, https://www.aima.in/media-centre/events/3rd-
us-india-conference-september-2018-berkeley-usa.htmll.
30 “Stanford-India Biodesign,” Stanford Byers Center for Biodesign, 2019, http://
biodesign.stanford.edu/programs/global-initiatives/stanford-india-biodesign.html.
31 “Financial Initiatives to Help the Poor Manage Agriculture Risk in India,” Feed
the Future, UC Davis, accessed May29, 2018, https://basis.ucdavis.edu/project/
financial-initiatives-help-poor-manage-agriculture-risk-india.
32 “Board of Advisors Meeting,” Energy Efficiency Center, UC Davis, April 24, 2017,
https://energy.ucdavis.edu/wp-content/uploads/2017/07/EEC-BOA-Packet-April2017-
reduced.pdf.
33 “India has made primary education universal, not good,” The Economist, June 8,
2017, https://www.economist.com/news/leaders/21723105-worlds-biggest-school-
system-also-one-worst-india-has-made-primary-education.
34 “History and Milestones,” Indian School of Business, accessed May 29, 2019, https://
www.isb.edu/about-isb.
35 Interview with Anita Manwani, Spring 2019.
36 “About Us,” India-West, accessed May 29, 2019, https://www.indiawest.com/site/
about.html.
37 “About,” TiE Global, accessed May 29, 2019, https://tie.org/about/.
38 “About Indiaspora,” Indiaspora, 2019, http://www.indiaspora.org/about/.
39 Interview with M.R. Rangaswami, June 6, 2018.
Chapter 4
Indian States: Laboratories of Innovation
1 “Engaging Indian States,” Center for Strategic & International Studies,” 2019, https://
indianstates.csis.org/.
2 “Haryana notifies bio-energy policy,” The Pioneer, March 23, 2018, https://www.
dailypioneer.com/2018/state-editions/haryana-notifies-bio-energy-policy.html.
3 Venugopal, Sruti, “Rural technology policy to create jobs,” Telangana Today, May 13,
2017, https://telanganatoday.com/rural-technology-policy-create-jobs.
4 Krishna, Vishal, “Karnataka fast tracks Rs 18 crore fund for agri-
startups,” YourStory, January 6, 2018, https://yourstory.com/2018/01/
karnataka-fast-tracks-rs-18-crore-fund-agri-startups/.
5 Pitchiah, Vijayakumar, “Karnataka govt grants $1.5 mn to 26 biotech
startups,” VCCircle, May 10, 2017, https://www.vccircle.com/
get-the-ultimate-rummy-experience-and-ace-the-game-on-junglee-rummy.
6 Rawat, Virendra Singh, “Yogi bovt to create 5,000 acres of land bank,” Business
Standard, October 4, 2017, https://www.business-standard.com/article/economy-
policy/yogi-govt-to-create-5-000-acres-of-land-bank-117100401224_1.html.
7 Singh, Sarita, “The Economic Times,” October 2, 2017, https://economictimes.
indiatimes.com/industry/services/property-/-cstruction/odisha-govt-creating-land-
bank-for-industrial-allocation/articleshow/60905858.cms.
8 Mondal, Debapriya, “Govt, EESL to install 10 lakh LED lights in seven
Andhra districts,” ET Energyworld.com, The Economic Times, April
10, 2019, https://energy.economictimes.indiatimes.com/news/power/
govt-eesl-to-install-10-lakh-led-lights-in-seven-andhra-districts/58999252.
9 “All 114 Urban Local Bodies in Odisha will have LED street lights,” United News of
India, November 9, 2018, http://www.uniindia.com/all-114-urban-local-bodies-in-
odisha-will-have-led-street-lights/east/news/1401107.html.
10 Singh, Kartikeya, “India’s digitizing states: leaders and laggards, Live Mint, December
26, 2017, https://www.livemint.com/Opinion/JL0WLSixmYuus5Olya7c6L/Indias-
digitizing-states-leaders-and-laggards.html.
11 “Tenalgana aggregates all G2C apps in T App Folio,” Business Line, February 28,
2018, https://www.thehindubusinessline.com/news/telangana-aggregates-all-g2c-
apps-in-t-app-folio/article22881845.ece.
12 Kumar, Sajan C., “New Tamil Nadu e-governance policy aims to offer all services
online by 2023,” Financial Express, January 11, 2018, https://www.financialexpress.
com/india-news/new-tamil-nadu-e-governance-policy-aims-to-offer-all-services-
online-by-2023/1010098/.
13 “UP Nivesh Mitra,” India Filings, 2018, https://www.indiafilings.com/learn/
up-nivesh-mitra/.
14 Singh, Kartikeya, “India’s digitizing states: leaders and laggards,” Live Mint,
December 26, 2017, https://www.livemint.com/Opinion/JL0WLSixmYuus5Olya7c6L/
Indias-digitizing-states-leaders-and-laggards.html.
15 Ibid.
16 Singh, Kartikeya, “Enterprising Indian states: leaders and laggards,” Live Mint,March
27, 2018,https://www.livemint.com/Opinion/lYM2nzPthUwJbjPCdvhcNO/Enterprising-
Indian-states-leaders-and-laggards.html.
17 Ibid.
18 Chaudhary, Suman, “Karnataka’s New Startup Policy: `30,000 Per Month for
Entrepreneurs, Elevate 100 Renamed to Elevate 500 and More,” IndianWeb2, March
7, 2018, https://www.indianweb2.com/2018/03/07/karnatakas-new-startup-policy-
₹30000-per-month-entrepreneurs-elevate-100-renamed-elevate-500/.
19 Singh, Kartikeya, “Enterprising Indian states: leaders and laggards,” Live Mint,March
27, 2018,https://www.livemint.com/Opinion/lYM2nzPthUwJbjPCdvhcNO/Enterprising-
Indian-states-leaders-and-laggards.html.
20 KaPoor, Amit, “India’s Competitiveness: A Perspective from States,” Institute for
Competitiveness, 2018, http://www2.itif.org/2018-gtipa-summit-amit-kapoor.pdf.
21 “Rural population (% of total population),” World Bank, 2018, https://data.worldbank.
org/indicator/SP.RUR.TOTL.ZS?end=2017&locations=IN-CN&start=1960.
22 “Urban Population,” World Bank, 2018, https://data.worldbank.org/indicator/SP.URB.
TOTL?locations=IN-CN&most_recent_value_desc=true.
23 “Country Profiles: India,” World Urbanization Prospects 2018, United Nations, 2018,
https://population.un.org/wup/Country-Profiles/.
24 Kapoor, Amit, “City Competitiveness 2017,” Institute for Competitiveness, January 5,
2018, https://competitiveness.in/city-competitiveness-report-2017/.
25 Kapoor, Amit,”Creative Economy of Indian Cities,” Institute for
Competitiveness, December 29, 2017, https://competitiveness.in/
creative-economy-of-indian-cities-2017/.
Chapter 5
Innovation, Startups and Investment:
Poised for Breakthrough
1 World Bank “Doing Business” reports for 2017, 2018, and 2019, http://www.
doingbusiness.org/content/dam/doingBusiness/media/Annual-Reports/English/
DB17-Report.pdf, http://www.doingbusiness.org/content/dam/doingBusiness/media/
Annual-Reports/English/DB2018-Full-Report.pdf, https://www.worldbank.org/content/
dam/doingBusiness/media/Annual-Reports/English/DB2019-report_web-version.pdf.
2 Ravi Kathm “India Posts Highest Growth in Patent Applications in 2018”, Live Mint,
March 20, 2019, https://www.livemint.com/politics/policy/india-postst-highest-growth-
in-patent-applications-in-2018-1553021506627.html
3 “Startup ecosystem in India—Growing or matured?” KPMG, December 2018, https://
assets.kpmg/content/dam/kpmg/in/pdf/2019/01/startup-landscape-ecosystem-
growing-mature.pdf.
4 “Global Innovation Index 2018: Energizing the World with Innovation,” Cornell
University, INSEAD, and WIPO, 2018, https://www.globalinnovationindex.org/
gii-2018-report.
5 Ibid.
6 “Global Tech Hubs Report: Global metro areas and their tech companies,” CB
Insights, 2018, https://www.cbinsights.com/reports/CB-Insights_Global-Tech-Hubs.
pdf.
7 “As Early-Stage Deals Fall In India, Unicorns Continue To Raise Mega-Rounds,”
CB Insights, November 19, 2018, https://www.cbinsights.com/research/
india-unicorns-investment-trends/.
8 “$1B+ Market Map: The World’s 326 Unicorn Companies in One Infographic,”
CB Insights, June 12, 2019, https://app.cbinsights.com/research/
unicorn-startup-market-map.
9 “The Most Active Investors In India Tech,” CB Insights, July 13, 2017, https://www.
cbinsights.com/research/india-most-active-investors/.
10 “As Early-Stage Deals Fall In India, Unicorns Continue To Raise Mega-Rounds,”
CB Insights, November 19, 2018, https://www.cbinsights.com/research/
india-unicorns-investment-trends/.
11 Dalal, Mihir, “Exit Blues,” Live Mint, January 18, 2018, https://www.livemint.com/Com
panies/6vSCdFRsDvkbijPwt9AFnO/Exit-blues.html.
100
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
12 Interview with Dr. Anula Jayasuriya, Founder and Managing Director, EXXclaim
Capital, Fall 2018.
13 “Walmart to open 50 new stores in India in 4–5 years,” The Hindu, May 10, 2018,
https://www.thehindu.com/business/walmart-to-open-50-new-stores-in-india-in-4-5-
years/article23834109.ece.
14 “Flipkart is India’s Biggest VC-Backed Tech Exit by a Mile,” CB Insights, May 10, 2018,
https://www.cbinsights.com/research/flipkart-walmart-india-top-tech-exits/
15 Goyal, Malini, “It’s springtime for India’s startup financing industry and here’s what
made it happen,” The Economic Times, May 21, 2019, https://economictimes.
indiatimes.com/small-biz/startups/features/spring-is-here-for-indias-startup-financing-
industry-and-heres-what-made-it-happen/articleshow/69390913.cms.
16 Panday, “New Enterprise Associates veering away from investment in
India,” Qrius, September 16, 2017, https://qrius.com/new-enterprise-
associates-veering-away-investment-india/ and Shalini, Kolodny, Lora,
“Tim Draper is backing Indian startups again with Blume Ventures
Alliance, TechCrunch, February 2017, https://techcrunch.com/2017/02/13/
tim-draper-is-backing-indian-startups-again-with-blume-ventures-alliance/.
17 Rai, Joseph, “Sequoia Capital raises sixth India VC fund, loses another
managing director,” VCCircle, August 21, 2018, https://www.vccircle.com/
sequoia-capital-raises-sixth-india-vc-fund-loses-another-managing-director.
18 ”Falcon Edge, Maverick, existing investors to invest in Bounce at $200 million
valuation,” Live Mint, April 24, 2019, https://www.livemint.com/companies/
start-ups/bounce-closing-a-80-million-funding-round-backed-by-sequoia-
others-1555996304294.html.
19 “About Surge,” Surge, Sequoia Capital Operations LLC, 2019, https://www.
surgeahead.com.
20 Sen, Anirban and Mihir Dalai, “Accel Partners raises $450 million India
fund, Live Mint, December 1, 2016, https://www.livemint.com/Companies/
EnEmvgP4mH1jWQLj7pfIQM/Accel-Partners-raises-450-million-India-fund.html.
21 Schleifer, Theodore, “Here are the big winners from Flipkart’s $16 billion deal
with Walmart,” Vox, May 9 2018, https://www.vox.com/2018/5/9/17336790/
flipkart-walmart-deal-winners-tiger-global-softbank-accel.
22 Anand J, “Accel Partners reveals why it invested in Flipkart at a time when
it had no backers,” VCCircle, May 10, 2018, https://www.vccircle.com/
flipkarts-first-vc-backer-reveals-why-it-invested-when-no-else-wanted-to/.
23 “Matrix Partners India fund raises $300 million,” Financial Express,
August 17, 2018, https://www.financialexpress.com/industry/
matrix-partners-india-fund-raises-300-million/1283207/.
24 Mishra, Digbijay, “Video startup Clipp App gets $6 million from Matrix, others,”
The Times of India, December 14, 2017, https://timesofindia.indiatimes.com/
venture-capital/video-startup-clip-app-gets-6-million-from-matrix-others/
articleshow/62061407.cms.
25 Transit: Motorbike rental firms compete with Uber in India, San Francisco
Chronicle, May 13, 2019, https://www.pressreader.com/usa/san-francisco-chroni
cle/20190513/281938839361436.
26 Interview with Sumir Chadha, Managing Director, WestBridge Capital, Spring 2019.
27 Chanchani, Madhav, “IDG Ventures India becomes Chiratae, to raise $300mn for
fourth fund,” The Economic Times, October 10, 2018, https://economictimes.
indiatimes.com/small-biz/startups/newsbuzz/for-a-big-leap-idg-ventures-india-to-
become-chiratae-eyes-300-million/articleshow/66142302.cms.
28 Hector, Dearton Thomas, “IDG Ventures India renames itself as Chiratae
Ventures,” VCCircle, October 10, 2018, https://www.vccircle.com/
idg-ventures-india-renames-itself-as-chiratae-ventures.
29 Chanchani, Madhav, “IDG Ventures India closes Rs 1,360-cr fund,” The Economic
Times, January 30, 2017, https://economictimes.indiatimes.com/small-biz/money/idg-
ventures-india-closes-rs-1360-cr-fund/articleshow/56864079.cms.
30 Chanchani, Madhav, “IDG Ventures India becomes Chiratae, to raise $300mn for
fourth fund,” The Economic Times, October 10, 2018, https://economictimes.
indiatimes.com/small-biz/startups/newsbuzz/for-a-big-leap-idg-ventures-india-to-
become-chiratae-eyes-300-million/articleshow/66142302.cms.
31 Ibid.
32 Interview with Krish Panu, Managing Director, PointGuard Ventures, Spring 2019.
33 Pitchiah, Vijayakumar, “Nexus Venture Partners leads Series A round
in Observe.ai,” VCCircle, August 14, 2018, https://www.vccircle.com/
nexus-venture-partners-leads-series-a-round-in-observe-ai/.
34 Hector, Dearton Thomas, “Lightspeed US leads fresh investment in hyperlocal
discovery startup Magicpin,” VCCircle, November 23, 2018, https://www.vccircle.
com/lightspeed-us-leads-fresh-investment-in-hyperlocal-discovery-startup-magicpin/.
35 Dutta, Vishal, “John Chambers sets up plans take Indian startups global,” Rise, The
Economic Times, January 21, 2019, https://economictimes.indiatimes.com/small-
biz/startups/newsbuzz/john-chambers-sets-up-plans-take-indian-startups-global/
articleshow/67618324.cms.
36 “Mohanjit Jolly–Investment Committee Member,” Unreasonable, 2018, https://
unreasonablecapital.com/portfolio/mohanjit-jolly/.
37 Dhanjal, Swaraj Singh and Shrija Agrawal, “IronPillar makes final close of $90
million fund,” Live Mint, October 4, 2018, https://www.livemint.com/Companies/
Sxv5v6ehSuIGP0FzSRS8pO/IronPillar-makes-final-close-of-90-million-fund.html.
38 Interview with Mohanjit Jolly, Partner, Iron Pillar, Spring 2019.
39 “SVB Financial Group Opens Venture Lending Operation in India,” Silicon Valley
Bank press release, Auguts 18, 2008, https://www.svb.com/news/company-news/
svb-financial-group-opens-venture-lending-operation-in-india.
40 Chanchani, Madhav, “Saama raiser $100m for contrarian bets,” The Economic Times,
April 5, 2018, https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/
saama-raises-100m-for-contrarian-bets/articleshow/63633587.cms.
41 Sarkar, Ranju, “Why investors like Sachin Bansal are putting their money on venture
debt,” Business Standard, April 30, 2019, https://www.business-standard.com/
article/specials/why-investors-like-sachin-bansal-are-putting-their-money-on-venture-
debt-119043000891_1.html.
42 “Our Companies,” Saama Capital, accessed June 3, 2019, https://www.saamacapital.
vc/companies/.
43 Interview with Andy Tsao, Managing Director, SVB Global Gateway.
Chapter 6
Information Technology: Upward Mobility
1 “Strategic Review: IT-BPM Sector In India 2019: Decoding Digital,”
NASSCOM, 2019, https://www.nasscom.in/knowledge-center/publications/
strategic-review-it-bpm-sector-india-2019-decoding-digital.
2 “Jobs and Skills: The Imperative to reinvent and disrupt,” NASSCOM, May 18, 2017,
https://www.nasscom.in/sites/default/files/Jobs_and_Skills.pdf
3 “Industry Performance: 2018–19 and what lies ahead,” NASSCOM, 2019, https://
www.nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-
ahead_0.pdf
4 “IT & ITeS Industry in India,” India Brand Equity Foundation,” March 2019, https://
www.ibef.org/industry/information-technology-india.aspx.
5 “Industry Performance: 2018–19 and what lies ahead,” NASSCOM, 2019, https://www.
nasscom.in/sites/default/files/Industry-Performance2018-19-and-what-lies-ahead_0.pdf
6 “It & ITeS,” India Brand Equity Foundation,” November 2018, https://www.ibef.org/
industry/information-technology-india/infographic.
7 “Indian IT, ITeS & BPM Industry Analysis,” India Brand Equity Foundation,” May 2019,
https://www.ibef.org/industry/indian-iT-and-iTeS-industry-analysis-presentation.
8 Singhi, Abheek and Parul Bajaj, “Decoding Digital Consumers in India,” Boston
Consulting Group, July 27, 2017, https://www.bcg.com/publications/2017/
globalization-consumer-products-decoding-digital-consumers-india.aspx.
9 “Innovating for the Next Half Billion,” Omidyar Network, December 18, 2017, https://
www.omidyar.com/insights/innovating-next-half-billion.
10 Tandon, Rajguru, “Emerging Technologies To Add 1.4 Million IT Jobs In India
By 2027,” BW BusinessWorld, November 2018, http://www.businessworld.
in/article/Emerging-Technologies-To-Add-1-4-Million-IT-Jobs-In-India
-By-2027/15-11-2018-164207/.
11 “India Workforce Report – Professional Edition | India | H2 2018,”
LinkedIn, April 10, 2019 https://economicgraph.linkedin.com/resources/
linkedin-india-workforce-professional-report-2018-h2.
12 Pacheco, Shrey,” Modi in US: Tech CEOS Express Support for Digital India, Make in
India, GST,” Digit, June 27, 2017, https://www.digit.in/news/general/modi-in-us-tech-
ceos-express-support-for-digital-india-make-in-india-gst-35770.html
13 Nidhi, Sai, “Here’s what you need to know about Digital India initiative,”
DNA India, September 28, 2015, https://www.dnaindia.com/business/
report-here-s-what-you-need-to-know-about-the-digital-india-initiative-2129525.
101
Notes
14 Chambers, John, “Cisco’s John Chambers Explains How Leaders Can Cross the
Digital Divide,” Fortune, September 14, 2016, http://fortune.com/2016/09/14/
cisco-john-chambers-digital-age/.
15 Kaka, Noshir, Anu Madgavkar, Alok Kshirsagar, Rajat Gupta, James Manyika, Kushe
Bahl, and Shishir Gupta, “Digital India: Technology to transform a connected nation,”
McKinsey Global Institute, March 2019, https://www.mckinsey.com/~/media/
mckinsey/business%20functions/mckinsey%20digital/our%20insights/digital%20
india%20technology%20to%20transform%20a%20connected%20nation/digital-india-
technology-to-transform-a-connected-nation-full-report.ashx.
16 Ibid.
17 Sengupta, Devina, “Consumption to double: Data usagee to turn upwardly mobile in
2019,” The Economic Times, January 3, 2019, https://economictimes.indiatimes.com/
tech/internet/data-usage-to-turn-upwardly-mobile-in-2019/articleshow/67358232.
cms?from=mdr.
18 Purnell, Newley, “Two Years Ago, India Lacked Fast, Cheap Internet—One Billionaire
changed All That,” The Wall Street Journal, September 5, 2018, https://www.wsj.com/
articles/two-years-ago-india-lacked-fast-cheap-internetone-billionaire-changed-all-
that-1536159916.
19 “IT &ITeS Industry in India,” India Brand Equity Foundation, April 2018, https://www.
ibef.org/archives/detail/b3ZlcnZpZXcmMzc5MTcmODk=.
20 “IT & ITeS Industry in India,” India Brand Equity Foundation,” March 2019, https://
www.ibef.org/industry/information-technology-india.aspx.
21 “E-commerce and consumer internet companies have raised over US$7 billion in PE/
VC capital in 2018: EY report”, EY press release, March 8, 2019, https://www.ey.com/
in/en/newsroom/news-releases/news-e-commerce-and-consumer-internet-campanies-
have-raised-over-usd-7-billion-in-pe-vc-capital-in-2018-ey-report.
22 Davies, Jamie, “Indian government greenlights plan to increase broadband
penetration,” Telecoms.com, September 27, 2018, http://telecoms.com/492455/
indian-government-greenlights-plan-to-increase-broadband-penetration/#.
23 Goel, Vindu, “U.S. Credit Card Giants Flout India’s New Law on Personal Data,” The
New York Times, October 15, 2018.
24 Martin F.R., “India’s Data Protection Bill Will Now Be Tabled in June,” Analytics
India Magazine, January 4, 2019, https://www.analyticsindiamag.com/
indias-data-protection-bill-in-june/.
25 Mendonca, Jochelle, “As government tightens data rules, IT firms flag risks,” The
Economic Times, March 13, 2019, https://economictimes.indiatimes.com/tech/ites/
as-government-tightens-data-rules-it-firms-flag-risks/printarticle/68384442.cms.
26 Mankotia, Anandita Singh, “Ravi Shankar Prasad to ‘quickly’ table data protection bill,
notify norms,” The Economic Times, June 1, 2019, https://economictimes.indiatimes.
com/tech/internet/priority-to-quickly-take-data-protection-bill-to-parliament-new-it-
minister-ravi-shankar-prasad/articleshow/69596440.cms.
27 Mishra, Asit Ranjan, “India warns WTO about EU’s proposal for e-commerce rules,”
Live Mint, May 5, 2019, https://livemint.com/companies/news/india-warns-wto-about-
eu-s-proposal-for-e-commerce-rules-1557079533297.html.
28 Purnell, Newby and Rajesh Roy, “Amazon, Facebook and Walmart Need to Watch
Their Backs in India,” The Wall Street Journal, January 29, 2019, https://www.wsj.com/
articles/as-amazon-walmart-and-other-foreign-players-dominate-india-to-promote-
domestic-tech-companies-11548766862.
29 Arakali, Harichandan, “Indian IT services sector: Time for a reboot,” Forbes
India, March 14, 2018, http://www.forbesindia.com/article/leaderboard/
indian-it-services-sector-time-for-a-reboot/49671/1.
30 Talgeri, Kunal and Jochelle Mendonca, “How Infosys” Vishal Sikka disrupted
organisation by moving CEO’s office from Bengaluru to Palo Alto,” The Economic
Times, February 16, 2017, https://economictimes.indiatimes.com/tech/ites/how-
infosys-vishal-sikka-disrupted-organisation-by-moving-ceos-office-from-bengaluru-to-
palo-alto/articleshow/57175307.cms.
31 “Palo Alto Studio,” Infosys Digital Studio, accessed June 18, 2018, https://www.
infosys.com/navigate-your-next/agile-digital-scale/digital-studios/Pages/san-francisco.
aspx.
32 Landy, Heather, “Infosys, on a 10,000-job hiring sprint in the US, is 75% of the
way there,” Quartz at Work, February 17, 2019, https://qz.com/work/1552468/
infosys-closing-in-on-us-hiring-target-opens-design-hub-in-providence/.
33 Interview with Anurug Varma, Vice President, Infosys Ltd., Summer 2018.
34 “Wipro Launches Silicon Valley Innovation Center in Mountain View,” Wipro
press release, August 1, 2017, https://www.wipro.com/en-US/digital/news/
wipro-launches-silicon-valley-innovation-center-in-mountain-view/.
35 Sood, Varun, “Wipro startup investments help win 100 deals in 4 years,” Live
Mint, February 5, 2019, https://www.livemint.com/companies/news/wipro-startup-
investments-help-win-100-deals-in-4-years-1549386775568.html.
36 Sunkara, Keshav, “Wipro Digital to acquire Alan Cooper’s design consultancy
firm for $8.5 mn,” VCCircle, October 5, 2017, https://www.vccircle.com/
wipro-digital-to-acquire-alan-coopers-design-consultancy-firm-for-8-5-mn/.
37 “TCS Inaugurates Silicon Valley Customer Collaboration Center in Santa Clara,
California,” Tata Consultancy Services press release, January 31, 2012, https://www.
tcs.com/tcs-silicon-valley-customer-collaboration-center-santa-clara-california.
38 “TCS Launches its Digital Reimagination Studio in Silicon Valley,” Tata
Consultancy Services press release, February 17, 2016, https://www.tcs.com/
tcs-digital-reimagination-studio-in-silicon-valley.
39 Interview with Harshul Asnani, Senior Vice President, Tech Mahindra, Spring 2018.
40 Singh, Shelley, “Google wants to bring everyone online in India through its next
billion plan,” The Economic Times, June 5, 2018, https://economictimes.indiatimes.
com/tech/internet/google-wants-to-bring-everyone-online-in-india-through-its-next-
billion-plan/articleshow/64457134.cms.
41 “India accounts for 36.9 billion downloads on Google Play Store, tops list ahead of
the US,” Financial Express, October 24, 2018, https://www.financialexpress.com/
industry/technology/india-accounts-for-36-9-billion-downloads-on-google-play-store-
tops-list-ahead-of-the-us/1359260/.
42 Singh, Shelley, “Google wants to bring everyone online in India through its next
billion plan,” The Economic Times, June 5, 2018, https://economictimes.indiatimes.
com/tech/internet/google-wants-to-bring-everyone-online-in-india-through-its-next-
billion-plan/articleshow/64457134.cms.
43 Shah, Saqib, “Alphabet tries internet lasers instead of balloons for India,”
Endgadget, December 15, 2017, https://www.engadget.com/2017/12/15/
alphabet-x-internet-india-andhra-pradesh/.
44 Singh, Shelley, “Google wants to bring everyone online in India through its next
billion plan,” The Economic Times, June 5, 2018, https://economictimes.indiatimes.
com/tech/internet/google-wants-to-bring-everyone-online-in-india-through-its-next-
billion-plan/articleshow/64457134.cms.
45 Iyengar, Rishi, “Google rolls out Neighbourly, a new app just for India,” CNN
Business, November 21, 2018, https://www.cnn.com/2018/11/21/tech/google-india-
neighbourly-app/index.html.
46 “Google Neighbourly now present in 5 more cities to answer your hyperlocal
queries,” Firstpost Tech2, September 12, 2018, https://www.firstpost.com/tech/news-
analysis/google-neighbourly-now-present-in-5-more-cities-to-answer-your-hyperlocal-
queries-5170111.html.
47 Singh, Shelley, “Google wants to bring everyone online in India through its next
billion plan,” The Economic Times, June 5, 2018, https://economictimes.indiatimes.
com/tech/internet/google-wants-to-bring-everyone-online-in-india-through-its-next-
billion-plan/articleshow/64457134.cms.
48 “All the Numbers You Need,” DataReportal, January 2019, https://datareportal.com/
49 Zucchi, Kristina, “Why Facebook Is Banned in China & How to Access
It,” Investopedia, April 30, 2019, https://www.investopedia.com/articles/
investing/042915/why-facebook-banned-china.asp.
50 Hutchinson, Andrew, “Facebook Reaches 2.38 Billion Users,
Beats Revenue Estimates in Latest Update,” Social Media
Today, April 24, 2019, https://www.socialmediatoday.com/news/
facebook-reaches-238-billion-users-beats-revenue-estimates-in-latest-upda/553403/.
51 Lardinois, Frederic, “Facebook’s Express Wi-Fi launches commercially in
India,” TechCrunch, May 4, 2017, https://techcrunch.com/2017/05/04/
facebooks-express-wi-fi-launches-commercially-in-india/.
52 Bhatia, Rahul, “The inside story of Facebook’s biggest setback,” The Guardian,
May 12, 2016, https://www.theguardian.com/technology/2016/may/12/
facebook-free-basics-india-zuckerberg.
53 Lardinois, Frederic, “Facebook’s Express Wi-Fi launches commercially in
India,” TechCrunch, May 4, 2017, https://techcrunch.com/2017/05/04/
facebooks-express-wi-fi-launches-commercially-in-india/.
54 Iyengar, Rishi, “WhatsApp has been linked to lynchings in India. Facebook is trying to
contain the crisis.,” CNN Business, July 27, 2018, https://www.cnn.com/2018/09/30/
tech/facebook-whatsapp-india-misinformation/index.html.
55 Ong, Thuy, “Facebook begins fact-checking news for users in India, one of its largest
markets,” The Verge, April 17, 2018, https://www.theverge.com/2018/4/17/17246658/
facebook-third-party-fact-checking-india.
102
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
56 Purnell, Newly, “Facebook Removes Hundreds of Fake Accounts Ahead of
India Elections,” The Wall Street Journal, April 1, 2019, https://www.wsj.
com/articles/facebook-removes-hundreds-of-fake-accounts-ahead-of-indian-
elections-11554129628.
57 “Oracle India Private Limited,” India Brand Equity Foundation, 2005, https://www.
ibef.org/download/Oracle.pdf.
58 Martin F.R., “Oracle Set To Launch Its First Indian Data Center IN Mumbai,”
Analytics India Magazine, January 23, 2019, https://www.analyticsindiamag.com/
oracle-launch-data-centre-mumbai/.
59 Nair, Prajeet, “What’s cooking in Oracle India’s labs: AI, blockchain, IoT and cloud,”
ComputerWorld from IDG, March 7, 2019, https://www.computerworld.in/interview/
whats-cooking-oracle-indias-labs-ai-blockchain-iot-and-cloud.
60 “Oracle lays off 100 employeed in India in its restructuring drive,” TechGig, March
23, 2019, https://content.techgig.com/oracle-lays-off-100-employees-in-india-in-its-
restructuring-drive/articleshow/68532385.cms.
61 Nair, Prajeet, “What’s cooking in Oracle India’s labs: AI, blockchain, IoT and cloud,”
ComputerWorld from IDG, March 7, 2019, https://www.computerworld.in/interview/
whats-cooking-oracle-indias-labs-ai-blockchain-iot-and-cloud.
62 “Center for Railway Information Systems Delivers High-Performance e-Ticketing
System to Support 200,000 Concurrent Users and Double Daily Peak-Hour Sales,”
Oracle, accessed June 18, 2019, https://www.oracle.com/in/customers/cris-1-
weblogic.html.
63 “Oracle to endow worth $400 million in India,” The Silicon Review, February 20, 2016,
https://thesiliconreview.com/2016/2/oracle-to-endow-worth-400-million-in-india/.
64 “Oracle opens its first Digital Hub in Bengaluru,” Express Tech, The Indian Express,
July 7, 2017, https://indianexpress.com/article/technology/tech-news-technology/
oracle-opens-its-first-digital-hub-in-bengaluru-4740375/.
65 Martin F.R., “Oracle Set To Launch Its First Indian Data Center IN Mumbai,”
Analytics India Magazine, January 23, 2019, https://www.analyticsindiamag.com/
oracle-launch-data-centre-mumbai/.
66 Kumar, Ankush, “ Oracle is bullish on supplying Blockchain tech for Oil and Gas
companies: Niraj Prakash, Oracle India,” Energyworld.com from The Economic Times,
June 6, 2018, https://energy.economictimes.indiatimes.com/news/power/oracle-
is-bullish-on-supplying-blockchain-tech-for-oil-gas-companies-niraj-prakash-oracle-
india/64477075.
67 Maru, Pankaj, “From Sales Cloud to AI backed smart Einstein: The
Salesforce saga,” CIO.com from The Economic Times, November 8,
2017, https://cio.economictimes.indiatimes.com/news/corporate-news/
from-sales-cloud-to-ai-backed-smart-einstein-the-salesforce-saga/61555834
68 Giriprakash, G., “Salesforce.com puts India expansion on fast track,” Hindu
Business Line, February 12, 2018, https://www.thehindubusinessline.com/info-tech/
salesforcecom-puts-india-expansion-on-fast-track/article22733765.ece.
69 Phadnis, Shilpa, “Salesforce.com signals India focus with appointment of country
head,” The Times of India, July 14, 2007, https://timesofindia.indiatimes.com/
business/india-business/salesforce-com-signals-india-focus-with-appointment-of-
country-head/articleshow/59589835.cms.
70 Kalavalapalli, Yogendra, “Salesforce to open centre in Hyderabad,” Live Mint, June 7,
2016, https://www.livemint.com/Industry/mUM8PgkfpCKEavB2VsrLRL/Salesforce-to-
open-centre-in-Hyderabad.html.
71 Ahmad, Ibrahim, “Biggest Change the Industry is Facing is Changing Customer
Expectations: Sunil Jose, Salesforce India,” DataQuest, March 19, 2019, https://www.
dqindia.com/biggest-change-industry-facing-changing-customer-expectations-sunil-
jose-salesforce-india/.
72 “SpringML opens new offices in Indianapolis and Hyderabad,”
News India Times, May 18, 2018, http://www.newsindiatimes.com/
springml-opens-new-offices-in-indianapolis-and-hyderabad.
73 “India is one of the fastest growing regions for salesforce,” SME
Channels, December 22, 2018, http://www.smechannels.com/
india-is-one-of-the-fastest-growing-regions-for-salesforce/.
74 Abrar, Peerzada, “’Saalesforce will create 1.1 mn India jobs,’” The Hindu, May 20,
2018, https://www.thehindu.com/business/Industry/salesforce-will-create-11-mn-india-
jobs/article23943605.ece.
75 “Salesforce Trailhead is democratizing skills for the workforce of the
future,” YourStory, April 30, 2019, https://yourstory.com/2019/04/
salesforce-trailhead-democratising-skills.
76 Krishna, Vishal, “Salesforce targets Indian SMBs with Essentials, a suite of
intelligent apps,” YourStory, March 16, 2018, https://yourstory.com/2018/03/
salesforce-targets-indian-smbs-essentials-suite-intelligent-apps/.
77 “About Zendesk,” Zendesk, accessed June 17, 2019, https://www.zendesk.com/
company/press/#about.
78 Sindhu, M.V., “Why Zendesk co-founder Morten Primdahl thinks India is an
exciting market,” YourStory, September 28, 2016, https://yourstory.com/2016/09/
india-zendesk-morten-primdahl/.
79 Ibid.
80 “Big boost for PM Modi’s Digital India dream! Indian banks, insurance companies
increasingly embracing digitisation, says US tech expert,” Financial Express, August
17, 2018, https://www.financialexpress.com/industry/banking-finance/big-boost-
for-pm-modis-digital-india-dream-indian-banks-insurance-companies-increasingly-
embracing-digitisation-says-us-tech-expert/1283756/.
81 “We See New Opportunities In India’s Enterprise Market: Zendesk CEO,”
Communications Today, May 21, 2018, https://www.communicationstoday.co.in/
we-see-new-opportunities-in-indias-enterprise-market-zendesk-ceo/.
82 Sindhu, M.V., “Why Zendesk co-founder Morten Primdahl thinks India is an
exciting market,” YourStory, September 28, 2016, https://yourstory.com/2016/09/
india-zendesk-morten-primdahl/.
83 Srinivasan, Supraja, “Zendesk to focus on India to push global growth,” The Economic
Times, May 22, 2018, https://economictimes.indiatimes.com/tech/ites/zendesk-to-
focus-on-india-to-push-global-growth/articleshow/64266920.cms.h
84 Sindhu, M.V., “Why Zendesk co-founder Morten Primdahl thinks India is an
exciting market,” YourStory, September 28, 2016, https://yourstory.com/2016/09/
india-zendesk-morten-primdahl/.
85 Stangel, Luke, “Report: Threatened with new tariffs, Apple contractor to build
iPhone X in India,” Silicon Valley Business Journal, December 27, 2018, https://
www.bizjournals.com/sanjose/news/2018/12/27/apple-india-foxconn-iphone-x-
manufacturing.html.
86 Ghosh, Durba, “Why is Apple looking to assemble the older iPhone 7
in India?” Quartz India, April 3, 2019, https://qz.com/india/1586001/
apple-to-make-iphone-7-in-india-to-take-on-xiaomi-vivo-others/.
87 “Apple iPhone X to bee made locally in India from July 2019:
Report,” BGR, April 11, 2019, https://www.bgr.in/news/
apple-iphone-x-to-be-made-locally-in-india-from-july-2019-report/.
88 “Cisco India Overview,” Cisco Systems website and detailed fact sheet, accessed
June 6, 2019, https://www.cisco.com/c/en_in/about/company-overview.html and
https://www.cisco.com/c/dam/global/en_in/assets/pdfs/detailed_fact_sheet.pdf
89 Reichert, Corinne, “Jio and Rakuten are pioneers: Cisco,” ZDNet, March 7, 2019,
https://www.zdnet.com/article/jio-and-rakuten-are-pioneers-cisco/.
90 Thaker, Aria, “Reliance Jio has the best 4G coverage in India, but Airtel’s the
fastest,” Quartz India, February 11, 2019, https://qz.com/india/1548198/
reliance-jio-tops-4g-coverage-in-india-but-airtels-the-fastest/.
91 Reichert, Corinne, “Jio and Rakuten are pioneers: Cisco,” ZDNet, March 7, 2019,
https://www.zdnet.com/article/jio-and-rakuten-are-pioneers-cisco/.
92 “VMware Seeks Government Push To Increase Its Footprint In India,”
Express Computer, July 25, 2018, https://www.expresscomputer.in/news/
vmware-seeks-government-push-to-increase-its-footprint-in-india/22259/.
93 Mathur, Nathan, “VMware plans to invest $2 billion in India over next 5
years,” Live Mint, October 17, 2018, https://www.livemint.com/Companies/
Lxeny6JbHqivoh9B4Ak0IL/VMware-plans-to-invest-2-billion-in-India-over-next-5-years.
html.
94 D’Monte, Leslie, “VMware: Taking the smart cloud to where data resides,”
Live Mint, September 23, 2018, https://www.livemint.com/Companies/
zI8khLy5upUYXTshYcTmWL/VMware-Taking-the-smart-cloud-to-where-data-resides.
html.
95 “VMware opens $120 million campus in Bengaluru,” Live Mint, April 14, 2015, https://
www.livemint.com/Industry/pXMfk7DXYSYQ4YBxLqOxSM/VMware-opens-120-
million-campus-in-Bengaluru.html.
96 John, Sujit and Shilpa Phadnis, “India’s in everything we do: VMware CEO,” The
Times of India, November 28, 2016, https://timesofindia.indiatimes.com/business/
india-business/Indias-in-everything-we-do-VMware-CEO/articleshow/55661908.cms.
97 “Cows In The Cloud: How A Family Farm Transformed Rural India,” Forbes,
February 24, 2017, https://www.forbes.com/sites/vmware/2017/02/24/
cows-in-the-cloud-how-a-family-farm-transformed-rural-india/#14537e4b5aff.
98 “The Best Show in India, Assisted by VMware,” VMware, assessed June 7, 2019,
https://www.vmware.com/content/microsites/possible/stories/book-my-show.html.
103
Notes
99 Christopher, Nilesh, “VMware spots $1 billion in cloud network,” The Economic
Times, August 22, 2018, https://economictimes.indiatimes.com/tech/internet/vmware-
spots-1-billion-in-cloud-network/articleshow/65497527.cms?from=mdr.
100
“The amazing story of the birth of HCL,” Rediff India Abroad, June 9, 2007, https://
www.rediff.com/money/2007/jun/09bspec1.htm.
101
Hall, Mark, “Hewlett-Packard Company,” Encyclopedia Britannica, April, 29, 2019,
https://www.britannica.com/topic/Hewlett-Packard-Company.
102
Layak, Suman, “How a split turned into a boon for HP’s laptop and printer
businesses,” The Economic Times, December 24, 2017, HP, https://economictimes.
indiatimes.com/tech/hardware/how-a-split-turned-into-a-boon-for-hps-laptop-and-
printer-businesses/articleshow/62226009.cms?from=mdr
103
Anand, Shivani, “Weak consumer demand in Q4 results in a 2.8% decline in Indian
Traditional PC Market in CY2018: IDC India Report,” IDC, February 14, 2019, https://
www.idc.com/getdoc.jsp?containerId=prAP44865919.
104
“HP India to give education a big push in 2019: MD Sumeer Chandra,” The
Economic Times, December 13, 2016, https://economictimes.indiatimes.com/tech/
hardware/hp-india-to-give-education-a-big-push-in-2019-md-sumeer-chandra/
articleshow/67072492.cms?from=mdr.
105
Mohan, Raghu, “Uber enters India; rools out first in Bangalore,” YourStory, August 30,
2013, https://yourstory.com/2013/08/uber-enters-india-rolls-out-first-in-bangalore.
106
“Uber folls into its 40th city in India,” Uber Newsroom, April 8, 2019, https://www.
uber.com/en-IN/newsroom/uber-rolls-into-its-40th-city-in-india/.
107
Karnik, Madhura, “Uber in India is fundamentally different from Uber in
the West,” Quartz India, March 16, 2017, https://qz.com/india/926220/
uber-in-india-is-fundamentally-different-from-uber-in-the-west/.
108
Shah, Aditi, “Uber doubling down on India investments after exiting Southeast Asia,”
Reuters, April 18, 2018, https://www.reuters.com/article/us-uber-india-coo/uber-
doubling-down-on-india-investments-after-exiting-southeast-asia-idUSKBN1HP1OR.
109
Purnell, Newley, “Uber’s Latest Retreat Leaves Brasil, India as the Key Battlegrounds,”
The Wall Street Journal, March 26, 2018, https://www.wsj.com/articles/
ubers-latest-retreat-leaves-brazil-india-as-the-key-battlegrounds-1522067884.
110
Bhattacharya, Ananya, “Ola vs Uber: The latest score in the great Indian taxi-
app game,” Quartz India, February 11, 2019, https://qz.com/india/1545042/
ola-vs-uber-the-latest-score-in-the-great-indian-taxi-app-game/.
111
Purnell, Newley, “Uber’s Latest Retreat Leaves Brasil, India as the Key Battlegrounds,”
The Wall Street Journal, March 26, 2018, https://www.wsj.com/articles/
ubers-latest-retreat-leaves-brazil-india-as-the-key-battlegrounds-1522067884.
112
Abrams, Corinne and Newley Purnell, “Airbnb Takes Stake in Indian Hotel-Booking
Startup Oyo,” The Wall Street Journal, April 1, 2019, https://www.wsj.com/articles/
airbnb-takes-stake-in-indian-hotel-startup-oyo-11554112029.
113
Purnell,Newly, “Netflix and Amazon Trail a Local Video Rival in India That’s Now
Disney-Owned,” The Wall Street Journal, June 4, 2019, https://www.wsj.com/
articles/netflix-and-amazon-trail-a-local-video-rival-in-india-thats-now-disney-
owned-11559646003.
114
Vena, Danny, “Netflix Subscribers Could More Than Double by 2023,” The Motley
Fool, September 24, 2018, https://www.fool.com/investing/2018/09/24/netflix-
subscribers-could-more-than-double-by-2023.aspx.
Spotlight
Aadhaar and Internet Privacy
1 “123 crore Aadharr cards issues to people: Govt tells Rajya Sabha,” Live Mint, January
2, 2019, https://www.livemint.com/Politics/FFdSf7BlL42zJ9H0jt9T6O/123-crore-
Aadhaar-cards-issued-to-people-Govt-tells-Rajya-S.html.
2 “Aadhaar-privacy debate: How the 12-digit number went from personal identifier to
all pervasive transaction tool,” Firstpost, January 18, 2018, https://www.firstpost.com/
india/aadhaar-privacy-debate-how-the-12-digit-number-went-from-personal-identifier-
to-all-pervasive-transaction-tool-4308043.html.
3 Bhattacharya, Ananya and Nupur Anand, “Aadhaar is voluntary—but millions of
Indians are already trapped,” Quartz India, September 25, 2018, https://qz.com/
india/1351263/supreme-court-verdict-how-indias-aadhaar-id-became-mandatory/.
4 “Govt withdraws “social media hub” plan after SC’s surveillance state remark,”
The Indian Express, June 5, 2019, https://indianexpress.com/article/india/
govt-withdraws-proposal-to-create-social-media-hub-after-snooping-allegations/
Spotlight
Digital India: Ubiquitous Data
1 “Number Of Smartphone Users In India Likely To Double To 859 Million By
2022,” Business Standard, May 10, 2019, https://www.business-standard.com/
article/news-cm/number-of-smartphone-users-in-india-likely-to-double-to-859-
million-by-2022-119051000458_1.html.
2 “Inadequate Optical Fibre Network May Roadblock 5G Rollout
in India,” INDVSTRVS, March 7, 2019, https://indvstrvs.com/
inadequate-optical-fibre-network-may-roadblock-5g-rollout-in-india/.
3 Mankotia, Anandita Singh, “Ravi Shankar Prasad to ‘quickly’ table data protection bill,
notify norms,” The Economic Times, June 1, 2019, https://economictimes.indiatimes.
com/tech/internet/priority-to-quickly-take-data-protection-bill-to-parliament-new-it-
minister-ravi-shankar-prasad/articleshow/69596440.cms.
4 Gupta, Arvind and Philip Auerswald, “The Ups and Downs of India’s Digital
Transformation,” Harvard Business Review, May 6, 2019, https://hbr.org/2019/05/
the-ups-and-downs-of-indias-digital-transformation.
5 Bhakta, Pratik, “Separate targest for institutions: Govt. eyes 30 billion digital payments
in FY 2018-19,” ET Rise, The Economic Times, April 25, 2018, https://economictimes.
indiatimes.com/small-biz/money/separate-targets-for-institutions-govt-eyes-30-bilion-
digital-payments-in-fy-2018-19/articleshow/63903950.cms.
6 “Aadhaar Dashboard,” Unique Identification Authority of India, accessed June 17,
2019, https://uidai.gov.in/aadhaar_dashboard/auth_trend.php.
7 Dhillon, Amrit, “‘It’s a godsend’’: the healthcare scheme bringing
hope to India’s sick,” The Guardian, March 21, 2019, https://
www.theguardian.com/global-development/2019/mar/21/
godsend-healthcare-scheme-bringing-hope-india-sick-ayushman-bharat.
8 McCarthy, Julie, “Indian Supreme Court Declares Privacy A Fundamental Right,” The
Two-Way, NPR, August 24, 2017.
9 Rai, Pranav, “The Indian Supreme Court’s Aadhaar judgement—A
privacy analysis,” IAPP, October 9, 2018, https://iapp.org/news/a/
the-indian-supreme-courts-aadhaar-judgement-a-privacy-perspective/.
10 Briefing with Ravi Shankar Prasad, Union Minister for Law & Justice,
Telecommunications, Communications, and Electronics & IT, Government of India,
August 28, 2018.
Spotlight
GE’s Digital Vote of Confidence for India
1 Ayres, Alyssa, “Can Indian Manufacturing Be the Next Chinese Manufacturing?” The
Atlantic, January 4, 2018, https://www.theatlantic.com/business/archive/2018/01/
india-manufacturing-tata-alyssa-ayres/549263/
2 “Predix: the Industrial IoT Application Platform,” GE, 2018, https://www.ge.com/
digital/sites/default/files/download_assets/Predix-The-Industrial-Internet-Platform-
Brief.pdf.
3 Kellner, Tomas, “An Engineer’s Dream: GE Unveils A Huge 3D Printer For
Metals,” GE Reports, November 14, 2017, https://www.ge.com/reports/
an-engineers-dream-ge-unveils-a-huge-3d-printer-for-metals/.
4 “Creation of GE Digital,” GE press release, BusinessWire, September 14, 2015,
https://www.businesswire.com/news/home/20150914006029/en/Creation-GE-Digital.
5 Kellner, “GE’s Brilliant Advanced Manufacturing Plant in Pund, India,” GE
Reports, February 15, 2015, https://www.ge.com/reports/post/110927997125/
ges-brilliant-advanced-manufacturing-plant-in/.
6 “GE opens global Digital Hub in Bengaluru, to hire 1,000 techies,” Live Mint,
December 2, 2016, https://www.livemint.com/Industry/mkUvrp1xIdfWYAADktIxcP/
GE-opens-global-Digital-Hub-in-Bengaluru-to-hire-1000-tech.html.
7 Goyal, Malini, “India’s potential is finally turning into results: Vishal Wanchoo, CEO,
GE South Asia,” The Economic Times, September 23, 2018, https://economictimes.
indiatimes.com/industry/indl-goods/svs/engineering/indias-potential-is-finally-turning-
into-results-vishal-wanchoo-ceo-ge-south-asia/articleshow/65916029.cms.
104
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
Spotlight
Women and Technology: Connecting to a
Better Life
1 Woetzel, Jonathan, et al., “The Power of Parity: Advancing Women’s Equality in
Asia Pacific | Focus: India,” McKinsey Globa Institute, May 2018, https://www.
mckinsey.com/~/media/McKinsey/Featured%20Insights/Gender%20Equality/The%20
power%20of%20parity%20Advancing%20womens%20equality%20in%20India%20
2018/India%20power%20of%20parity%20report.ashx.
2 “Mastercard Index of Women Entrepreneurs (MIWE) 2018,” Mastercard, March 2018,
https://newsroom.mastercard.com/wp-content/uploads/2018/03/MIWE_2018_Final_
Report.pdf.
3 “Women in tech: There are 3 times more male engineers to females,” Journey
to Belong blog, Belong.co, accessed June 7, 2019, http://blog.belong.co/
gender-diversity-indian-tech-companies.
4 Woetzel, Jonathan, et al., “The Power of Parity: Advancing Women’s Equality in
Asia Pacific | Focus: India,” McKinsey Globa Institute, May 2018, https://www.
mckinsey.com/~/media/McKinsey/Featured%20Insights/Gender%20Equality/The%20
power%20of%20parity%20Advancing%20womens%20equality%20in%20India%20
2018/India%20power%20of%20parity%20report.ashx.
5 “Chapter 6: State of Literacy,” Census 2011, Government of India, http://censusindia.
gov.in/2011-prov-results/data_files/india/Final_PPT_2011_chapter6.pdf.
6 “India Ranks Among Lowest in Women’s Access to Mobiles, Internet,”
The Quint, September 8, 2018, https://www.thequint.com/news/india/
study-on-internet-and-mobile-phone-use-in-india-reveals-gender-gaps.
7 “Internet in India 2017,” Internet and Mobile Association Of India and Kantar IMRB,
January 2018, https://cms.iamai.in/Content/ResearchPapers/15c3c84c-128a-4ea9-
9cf2-a50a6d18f21c.pdf.
8 Briefing with Debjani Ghosh, President, NASSCOM, August 28, 2018.
9 “‘Mahila e-Haat’, an online marketing platform for women launched by Smt Maneka
Sanjay Gandhi ,” Press Information Bureau, Government of India, Ministry of Women
and Child Development, March 7, 2016, http://pib.nic.in/newsite/PrintRelease.
aspx?relid=137415.
10 “Support to Training and Employment Programme for Women (STEP), Ministry of
Women and Child Development, Government of India, accessed Jun 8, 2019, https://
wcd.nic.in/schemes/support-training-and-employment-programme-women-step
11 “NASSSCOM Launches Women Wizards Rule Tech Program for Women
Technologists,” NASSCOM media release, June 19, 2018, https://www.nasscom.in/
press/nassscom-launches-women-wizards-rule-tech-program-women-technologists.
12 Rai, Saritha, “Debjani Ghosh to take charge at Nasscom, will be the first woman
to head tech body in 30 yrs,” The Economic Times, February 21, 2018, https://
economictimes.indiatimes.com/magazines/panache/debjani-ghosh-to-take-charge-at-
nasscom-will-be-the-first-woman-to-head-tech-body-in-30-yrs/articleshow/63013189.
cms?from=mdr.
13 “Women and IT Scorecard–India, 2018” NASSCOM and The
Open University UK, March 2018, https://www.researchgate.net/
publication/328603083_Women_and_IT_Scorecard_-_India_2018.
14 “Wireless Women for Entrepreneurship & Empowerment,” Wireless for Communities,
Digital Empowerment Foundation, accessed June 8, 2019, http://wforc.in/w2e2-2/.
15 “India SoochnaPreneur program,” Qualcomm Wireless Reach, August 24, 2016,
http://www.innovationinsights.ch/sites/default/files/resources/india-soochnapreneur-
program.pdf.
16 Moray, Deepali, “International Women’s Day 2017: How google’s ambitious Internet
Saathi program is digitally empowering women in rural India,” BGR, March 8, 2017,
https://www.bgr.in/news/international-womens-day-2017-how-googles-ambitious-
internet-saathi-program-is-digitally-empowering-women-in-rural-india/.
17 Paul, Mathures, “Google India’s biggest success story: Internet Saathi,” The
Telegraph, May 15, 2019, https://www.telegraphindia.com/technology/
google-indias-biggest-success-story-internet-saathi/cid/1690532.
18 “PayPal launched second edition of Recharge: opens registrations,”
PayPal India, March 19, 2017, https://www.paypal.com/stories/in/
paypal-launches-second-edition-of-recharge-opens-registrations.
19 “VMware and Women Who Code to train 15,000 women in India for free,” The New
Indian Express, November 10, 2018, http://www.newindianexpress.com/lifestyle/
tech/2018/nov/10/vmware-and-women-who-code-to-train-15000-women-in-india-for-
free-1896388.html.
20 Interview with Ajay Kela, President & CEO, Wadhwani Foundation, Summer 2018.
Chapter 7
Healthcare/Life Sciences: Care in the Cloud
1 “Healthcare Industry in India,” India Brand Equity Foundation, February 2018, https://
www.ibef.org/industry/healthcare-india.aspx.
2 Wilkinson, Bard, “‘Modicare’: India’s PM promises free health care for half a billion,”
CNN, September 24, 2018, https://www.cnn.com/2018/09/24/asia/modi-healthcare-
election-intl/index.html.
3 Agarwal, Gauree, “Healthcare Landscape in India: Challenges versus Emerging
Technologies (Part I),” Medium, September 26, 2018, https://medium.com/asha-
impact/healthcare-landscape-in-india-challenges-versus-emerging-technologies-part-i-
6aabc1312c66.
4 Rao, Nivedita, “Who is paying for India’s Healthcare?” The Wire, April 14, 2018,
https://thewire.in/health/who-is-paying-for-indias-healthcare.
5 Sevaraj, Sakthivel, Habib Hasan Farooqui, and Anup Karan, “Quantifying the financial
burden of households’ out-of-pocket payments on medicines in India: a repeated
cross-sectional analysis of National Sample Survey data, 1994–2014,” British Medical
Journal, May 31, 2018, http://bmjopen.bmj.com/content/bmjopen/8/5/e018020.full.
pdf.
6 Jadhav, Radheshyam. “Healthcare costs land 5 crore Indians in poverty,” Times of
India, December 15, 2017. https://timesofindia.indiatimes.com/india/healthcare-costs-
land-5cr-indians-in-poverty/articleshow/62076906.cms.
7 Nagarajan, Rema, “Health spending pushed 55 million into poverty in a year: Study,”
The Economic Times, June 13, 2018, https://economictimes.indiatimes.com/news/
politics-and-nation/health-spending-pushed-55-million-into-poverty-in-a-year-study/
articleshow/64568199.cms.
8 Biswas, Soutik, “India healthcare: Will the ‘world’s largest’ public scheme work?” BBC
News, February 4, 2018, https://www.bbc.com/news/world-asia-india-42914071.
9 “India to increase public health spending to 2.5% of GDP: PM Modi,” The
Economic Times, December 12, 2018, https://economictimes.indiatimes.com/news/
economy/policy/india-to-increase-public-health-spending-to-2-5-of-gdp-pm-modi/
articleshow/67055735.cms.
10 “National Health Stack: Strategy and Approach,” NITI Aayog, July 2018, https://
niti.gov.in/writereaddata/files/document_publication/NHS-Strategy-and-Approach-
Document-for-consultation.pdf.
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12 “Project Signing : Government of India and World Bank Sign Agreement for
Additional Financing to India’s National Nutrition Mission (POSHAN Abhiyaan) to
315 Districts across all States and UTs,” The World Bank press release, May 7, 2018,
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315districts-across-all-states.
13 “India’s home healthcare services sector all set for growth,” CNBC TV18, June 7,
2018, https://www.cnbctv18.com/healthcare/indias-home-healthcare-services-sector-
all-set-for-growth-109939.htm
14 Mishra, Ayush, “How telemedicine is transforming health care in India,” YourStory, July
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15 “Suri, Manveena, “India wants to make medical tourism a $9 billion industry by 2020,”
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tourism-industry-intl/index.html.
16 Bhargava, Yuthika, “Medical tourists flocking to India,” The Hindu, July 23, 2018,”
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article24497896.ece.
17 “India Among Fastest Growing Medical Tourism Destinations,” News18, October 1,
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medical-tourism-destinations-1545187.html.
18 “Suri, Manveena, “India wants to make medical tourism a $9 billion industry by 2020,”
CNN, February 15, 2019, https://www.cnn.com/2019/02/13/health/india-medical-
tourism-industry-intl/index.html.
19 “List of JCI Accredited Hospitals in India,” MedPort, May 2, 2018 updated September
1, 2018, https://medport.in/list-jci-accredited-hospitals-india/
20 “Indian Pharmaceuticals Industry Analysis,” India Brand Equity Foundation, May 2019,
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105
Notes
21 Khorakiwala, Dr. Murtaza, “Budget 2018 expectation: Govt’s facilitation a vital cog
in pharma industry growth,” ET Markets, The Economic Times, January 22, 2018,
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cog-in-pharma-industry-growth/articleshow/62602530.cms?from=mdr
22 “Pharmaceuticals,” India Brand Equity Foundation, February 2018, https://www.ibef.
org/download/Pharmaceuticals-February-2018.pdf.
23 “Indian Pharmaceutical Industry,” India Brand Equity Foundation, April 2019, https://
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24 “Indian Pharmaceuticals Industry Analysis,” India Brand Equity Foundation, May 2019,
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25 “Pharmaceuticals,” India Brand Equity Foundation, March 2018, https://www.ibef.org/
download/Pharmaceuticals-March-2018.pdf.
26 “Indian Pharmaceutical Industry,” India Brand Equity Foundation, April 2019, https://
www.ibef.org/industry/pharmaceutical-india.aspx.
27 Trivedi, Isha, “Indian drug makers need to raise quality bar as US strengthens
audits,” LiveMint, September 4, 2017, https://www.livemint.com/Industry/
mYpjCf3YoxLSv3P9UdxbQK/Indian-drug-makers-need-to-raise-quality-bar-as-US-
strengthe.html.
28 Das, Sohini, “Soon, uniform inspection norms for pharma units: govt to form advisory
body,” Business Standard, September 20, 2018, https://www.business-standard.com/
article/economy-policy/soon-uniform-inspection-norms-for-pharma-units-govt-to-
form-advisory-body-118091901066_1.html.
29 Sampat, Bhaven N. and Kenneth C. Shadlen, “Indian pharmaceutical patent
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30 Narayan, S., “Price Controls on Pharmaceutical Products in India,” Institute of South
Asian Studies, ISAS Working Paper, No. 20–Date: 19 March 2007, https://www.isas.
nus.edu.sg/wp-content/uploads/media/isas_papers/20.pdf.
31 Das, Sohini, “Pharmaceutical industry improving inspection skills for better
compliance,” Business Standard, April 8, 2018, https://www.business-standard.com/
article/companies/pharmaceutical-industry-improving-inspection-skills-for-better-
compliance-118040800024_1.html.
32 Valdez, Mary Lou, “FDA in India—championing a culture of quality,” Drug
Delivery Business News, March 31, 2017, https://www.drugdeliverybusiness.com/
fda-india-championing-culture-quality/.
33 Das, Sohini, “Pharmaceutical industry improving inspection skills for better
compliance,” Business Standard, April 8, 2018, https://www.business-standard.com/
article/companies/pharmaceutical-industry-improving-inspection-skills-for-better-
compliance-118040800024_1.html.
34 Think Change India, “Majority of the drugs found in India are either fake or
ineffective,” YourStory, June 6, 2017, https://yourstory.com/2017/06/india-fake-drugs
35 Sharma, Neetu Chandra, “India among countries where 10% of drugs are
substandard: WHO,” Live Mint, November 29, 2017, https://www.livemint.com/
Industry/6i5W6D4n07yGwmZDV2JalN/India-among-countries-where-10-of-drugs-are-
substandard-WH.html.
36 “Pharma industry needs to adopt global quality standards: OPPI,” Business Standard,
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needs-to-adopt-global-quality-standards-oppi-118060601000_1.html.
37 Mukherjee, Rupali, “Indian pharma cos get record 300 USFDA generic drug nods
in 2017,” Times of India, January 25, 2018, https://timesofindia.indiatimes.com/
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38 Kumar, Sanjay, “India creates national drugs database to address supply and quality
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40 Siddiqui, Zeba, “India’s drug regulator expects to finalize new clinical trial rules in two
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41 Thaker, Teena, “India to overhaul drug price system,” LiveMint, April 5, 2018, https://
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price-control-system.html.
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43 Keown, Alex, “Interview: Survey Numbers Show California’s
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44 Datta, PT Jyothi, “US Company Cepheid to make top-end TB-detection cartridges
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Spotlight
MedGenome:
A Case Study in Cross-Border Synergy
1 Magistretti, Bérénice, “Sequoia co-leads $30 million investment in MedGenome’s
research and diagnostics testing,” VentureBeat, August 28. 2017, https://venturebeat.
com/2017/08/28/sequoia-co-leads-30-million-investment-in-medgenomes-research-
and-diagnostics-testing/.
2 Samthosh, Sam, “India: A Wellspring of Untapped Genetic Knowledge,”
Techonomy, January 10, 2018, https://techonomy.com/2018/01/
india-wellspring-untapped-genetic-knowledge/.
3 “MedGenome Secures $30M in Series C Funding led by Sequoia India and
Sofina,” Seeking Alpha, August 28, 2017, https://seekingalpha.com/pr/16924583-
medgenome-secures-30-million-series-c-funding-led-sequoia-india-sofina.
Chapter 8
Energy/Environment: Cleaner is Better
1 “Indian Power Sector Analysis,” India Brand Equity Foundation, April 2019, https://
www.ibef.org/industry/indian-power-industry-analysis-presentation.
2 “Power Sector at a Glance ALL INDIA,” Ministry of Power, Government of India,
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3 “India shows how hard it is to move beyond fossil fuels,” The Economist,
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india-shows-how-hard-it-is-to-move-beyond-fossil-fuels.
4 Ali, Sahil, “The Future of Indian Electricity Demand: How much, by whom, and under
what conditions?” Brookings India, October 2018, https://www.brookings.edu/
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5 “BP Energy Outlook—2019: Insights from the Evolving transition scenario—India,” BP,
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6 “Draft National Energy Policy,” NITI Aayog. Government of India, June 27, 2017,
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7 Wu, Huizhong, “India says 100% of villages have electricity. Millions of people remain
in the dark,” CNN Money, April 30, 2018, https://money.cnn.com/2018/04/30/news/
india/india-electricity-villages-modi/index.html.
106
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
8 Chatterjee, Anupam, “Scrapped captive coal mines: Production around half
the Financial Year 2015 peak,” Financial Express, April 2, 2018, https://www.
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9 Bhaskar, Utpal, “Cabinet offers relief to struggling power firms,” Live Mint, March
8, 2019, https://www.livemint.com/industry/energy/union-cabinet-approves-power-
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10 Aggarwat, Kartik, “Revival of Hydro Power in India,” LinkedIn, “October 13, 2018,
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11 “Small Hydro,” Ministry of New and Renewable Energy, Government of India, August
2017, https://mnre.gov.in/small-hydro.
12 Seetharaman, G., “Hydel power in India is growing at the slowest pace,” The
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13 Sharma, Dinesh C., “Climate change affecting hydropower
generation in India: study,” DownToEarth, August 20, 2018,
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climate-change-affecting-hydropower-generation-in-india-study-61419,
14 “Accelerating India’s Clean Energy Transition,” Bloomberg New Energy Finance,
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15 “Government imposes safeguard duty on solar cells import for 2 years,” The
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16 Pratek, Saumy, “Extension of Solar Safeguard Duty Imposition Period
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17 Chandrasekaran, Kaaya, “Safeguard Duty Fails to Help Local Solar Cell
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help-local-manufacturers/articleshow/67358418.cms?from=mdr.
18 Ibid.
19 “Government imposes safeguard duty on solar cells import for 2 years,” The
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25 Irfan, Umair, “Why India’s air pollution is so horrendous,” Vox, October 31, 2018,
26 Agence France-Presse, “At least 70 killed as powerful dust storm and heavy rain slam
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29 Rao, Aprameya and Kishor Kadam, “25 years of liberalisation: A glimpse of India’s
growth in 14 charts,” Firstpost, July 7, 2016, https://www.firstpost.com/business/25-
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30 “Agriculture in India: Information About Indian Agriculture & Its Importance,” India
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aspx.
31 Pinisetti, Ravi, “Five ways India must help its farmers face the threat of climate
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32 Leahy, Stephen, “India Launches Massive Push for Clean Power, Lighting, and Cars,”
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33 Seetharaman, G. “Coal here to stay despite India’s ambitious goals for renewable
energy,” The Economic Times, May 12, 2019, https://economictimes.indiatimes.com/
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34 “Government is on its way to achieving 175 GW target for installed Renewable Energy
capacity by 2020,” Business Standard, December 27, 2017, https://www.business-
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35 Mohan, Vishwa, “India on track to meet all its climate action targets, says Union
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on-track-to-meet-all-its-climate-action-targets-says-union-minister-harsh-vardhan/
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36 Grower, R.B., “India must achieve the target of 63 GW nuclear-
installed capacity by 2032,” The Economic Times, July 15, 2017,
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india-must-achieve-the-target-of-63-gw-nuclear-installed-capacity-by-2032/.
37 “India’s Intended Nationally Determined Contribution: Working Towards Climate
Justice,” Government of India, 2015, http://nmhs.org.in/pdf/INDIA%20INDC%20
TO%20UNFCCC.pdf.
38 Ross, Katherine and Rhys Gerholdt, “Achieving India’s Ambitious
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achieving-indias-ambitious-renewable-energy-goals-progress-report.
39 Gopal, Sapna, “Will India be able to meet its renewable energy targets by
2022?” Mongabay-India, March 5, 2018, https://india.mongabay.com/2018/03/
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40 “Lighting up India: India’s LED Revolution,” ELE Times, January 3, 2019, https://www.
eletimes.com/lighting-up-india-indias-led-revolution.
41 “US announces $7.5 million to advance India’s power grid,” June 22, 2017, The
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42 Sood, Jyotika, “Govt’s electric vehicle campaign can create $300 billion domestic
battery market: NITI Aayog,” Live Mint, November 23, 2017, https://www.livemint.
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43 “NITI Aayog pitches for 24x7 power for all families, electric vehicles,” Business
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44 Sen, Sunny and Anand Murali, “The story of India’s flip-flops on its electric vehicle
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45 “Electric Vehicles & Lithium Ion Battery Market, India, 2017,” Frost &
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electric-vehicles-lithium-ion-battery-market-india-2017/.
46 Dutta, Dipayan, “More Electric buses coming soon in India: NITI Aayog to set EV
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47 “Future of Electric Vehicles In India,” Medium, November 8, 2018, https://medium.
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48 Dhawan, Rajat, Shivanshu Gupta, and Björn Hagemann, “The road less traveled:
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49 Shah, Aditi, “India Approves $1.4 Billion Electric Vehicle Incentive Scheme,”
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50 “Electric Vehicles & Lithium Ion Battery Market, India, 2017,” Frost &
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107
Notes
51 “India Leaps Ahead: India’s EV Battery Market Could Be Worth $300
Billion by 2030,” Rocky Mountain Institute, 2017, https://rmi.org/insight/
india-leaps-ahead-transformative-electric-vehicle-battery-feebate-solutions/.
52 Sood, Jyotika, “Govt’s electric vehicle campaign can create $300 billion domestic
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com/Industry/CQjREFzAOvT1XJ9l4UERgM/Move-to-100-electric-vehicles-can-create-
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53 Rajeshwari, Ankita, “GST on Li-Ion Batteries Reduced from 28 to 18
Percent,” Mercom India, July 23, 2018, https://mercomindia.com/
gst-li-ion-batteries-reduced-from-28-to-18-percent/.
54 “India ranks 4th globally in wind power installation: Survey,” The Hindu, January 31,
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globally-in-wind-power-installation-Survey/article17124280.ece.
55 Wu, Huizhong, “India says 100% of villages have electricity. Millions of people remain
in the dark,” CNN Money, April 30, 2018, https://money.cnn.com/2018/04/30/news/
india/india-electricity-villages-modi/index.html.
56 Nathoo, Leila, “India’s trouble with toilets,” Government sanitation drives fail to sway
those who believe going outdoors is more wholesome,” Independent, August 21,
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57 D’Cunha, Suparna Dutt, “This Startup Is Making India’s Garbage Its Business,”
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58 Pradan, Bibhudatta, “Here’s one city turning India’s mountain of trash into cash,” Los
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59 Romm, Joe, “India’s Taj Mahal of trash is a toxic nightmare,”
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60 Kadidal, Akhil, “A rising dilemma over Bengaluru’s mounting trash,” Deccan Herald,
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61 “Out of Order: The State of the World’s Toilets 2017,” WaterAid, November 2017,
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62 Dev, Aditya, “63% of sewage flows into rivers untreated every day: Central Pollution
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63 Wilkes, Tommy and Aditya Kalra, “Exclusive–India’s Ganges
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exclusive-indias-ganges-clean-up-in-a-shambles-modi-intervenes-idUSKBN1780ZC.
64 Scarr, Simon et al., “The race to save the river Ganges,” Reuters, January 18, 2019,
https://graphics.reuters.com/INDIA-RIVER/010081TW39P/index.html.
65 D’Cunha, Suparna Dutt, “This Startup is Making India’s Garbage Its Business,”
Forbes, June 21, 2017, https://www.forbes.com/sites/suparnadutt/2017/06/21/
this-startup-is-making-indias-garbage-its-business/#29964df65512
66 Pradhan, Bibhudatta, “Here’s one city turning India’s mountain of trash into cash,”
Bloomberg published by Los Angeles Times, January 3, 2018, https://www.latimes.
com/business/la-fi-india-trash-20180103-story.html.
67 Agarwal, Richa, “A waste management model for small towns,”
DownToEarth, October 3, 2017, https://www.downtoearth.org.in/news/
waste/a-waste-management-model-for-small-towns-58771.
68 Interview with Vishal Wanchoo, CEO, GE South Asia, fall 2018.
69 Chand, Abhigyan, “LinkedIn Top Companies 2018: Where India wants to
work now,” LinkedIn, March 21, 2018, https://www.linkedin.com/pulse/
linkedin-top-companies-2018-where-india-wants-work-now-abhigyan-chand.
70 Sengupta, Applied Solar Technologies raises $40 million,” Live Mint, June 8, 2015,
https://www.livemint.com/Companies/TOVP4QvpyKbNN99Pr6oqHI/Applied-Solar-
Technologies-raises-40-mn.html.
71 Chanchani, Madhav A., “D.Light Raises $5.5 Mn Series A Round,” VCCircle,
November 6, 2008.
72 Abrar, Peerzada, “Gram Power: Yashraj Khaitan’s ‘smart microgrid’ produces,
stores renewable energy on location,” ET Rise, The Economic Times, July 6, 2012,
https://economictimes.indiatimes.com/small-biz/entrepreneurship/gram-power-
yashraj-khaitans-smart-microgrid-produces-stores-renewable-energy-on-location/
articleshow/14704235.cms.
73 “Bechtel in India,” Bechtel, accessed June 11, 2019, https://www.bechtel.com/
about-us/offices/india/.
74 “India,” International Energy Studies Group, Berkeley Lab, accessed June 11, 2019,
https://ies.lbl.gov/region/india.
75 Abhyankar, Nikit et al., “Techno-Economic Assessment of Deep Electrivication of
Passenger Vehicles in India,” Berkeley Lab, May 2017, http://eta-publications.lbl.gov/
sites/default/files/lbnl-1007121_presentation_1.pdf.
76 “U.S.-India Partnership to Advance Clean Energy (PACE): A Progress Report,”
US Department of Energy, June 2012, https://www.energy.gov/sites/prod/files/
PACEProgressReport_Final.pdf.
77 Chao, Julie, “Berkeley Lab to Lead a US-India Clean Energy
Research Center,” Lawrence Berkeley National Laboratory news
release, April 13, 2012, https://newscenter.lbl.gov/2012/04/13/
berkeley-lab-to-lead-a-u-s-india-clean-energy-research-center/.
78 “Ahmedabad Heat Action Plan: 2019 Update,” Ahmedabad Municipat Corporation,
2019, https://www.nrdc.org/sites/default/files/ahmedabad-heat-action-plan-2018.pdf.
79 “Expanding Heat Resilience Across India,” National Resources Defense Council, May
2019, https://www.nrdc.org/sites/default/files/india-heat-resilient-cities-ib.pdf.
80 Jaiswal, Anjali, and Nehmat Kaur, “India’s 1st Online Building Efficiency Compliance
System,” National Resource Defence Council, December 20, 2017, https://www.nrdc.
org/experts/anjali-jaiswal/indias-1st-online-building-efficiency-compliance-system.
81 Interview with Anjali Jaiswal, Senior Director, International Program–India, National
Resources Defense Council (NRDC), spring 2019.
Chapter 9
Smart Cities: Order from Chaos
1 Woetzel, Jonathan et al., “Smart Cities: Digital solutions for a more livable future,”
McKinsey Global Institute, June 2018, https://www.mckinsey.com/~/media/McKinsey/
Industries/Capital%20Projects%20and%20Infrastructure/Our%20Insights/Smart%20
cities%20Digital%20solutions%20for%20a%20more%20livable%20future/MGI-Smart-
Cities-Full-Report.ashx.
2 Kak, Noshir et al., “India’s Ascent: Five opportunities for growth and transformation,”
McKinsey Global Institute, August 2016, https://www.mckinsey.com/~/media/
mckinsey/featured%20insights/employment%20and%20growth/indias%20ascent%20
five%20opportunities%20for%20growth%20and%20transformation/indias-ascent-
executive-briefing.ashx.
3 Woetzel, Jonathan, “Smart Cities: Digital solutions for a more livable future,”
McKinsey Global Institute, June 2018, https://www.mckinsey.com/~/media/McKinsey/
Industries/Capital%20Projects%20and%20Infrastructure/Our%20Insights/Smart%20
cities%20Digital%20solutions%20for%20a%20more%20livable%20future/MGI-Smart-
Cities-Full-Report.ashx.
4 Charles, Alice, “How can India make smart cities a reality?” World Economic
Forum, November 16, 2015, https://www.weforum.org/agenda/2015/11/
how-can-india-make-smart-cities-a-reality/.
5 “Smart Cities: Mission Statement & Guidelines,” Ministry of Urban Development,
Government of India, June 2015, http://smartcities.gov.in/upload/uploadfiles/files/
SmartCityGuidelines(1).pdf.
6 Meghani, Varsha, “Taking the vitals of India’s Smart Cities Mission,” Forbes,
June 1, 2018, http://www.forbesindia.com/article/sustainability-special/
taking-the-vitals-of-indias-smart-cities-mission/50353/1
7 “Annual Report 2017–18,” Ministry of Housing and Urban Affairs, Government of
India, http://mohua.gov.in/upload/uploadfiles/files/new_AR-2017-18%20(Eng)-
Website.pdf.
8 Sharma, Kiran, “Three years in, India’s smart city program has a long way to go,”
Nikkei Asian Review, July 4, 2018, https://asia.nikkei.com/Spotlight/Cover-Story/
Three-years-in-India-s-smart-city-program-has-a-long-way-to-go.
9 “Smart cities also need smart people: Puri,” The Hindu BusinessLine, February 26,
2019, https://www.thehindubusinessline.com/economy/smart-cities-also-need-smart-
people-puri/article26373756.ece
10 “Annual Report 2017–18,” Ministry of Housing and Urban Affairs, Government of
India, http://mohua.gov.in/upload/uploadfiles/files/new_AR-2017-18%20(Eng)-
Website.pdf.
11 Ramnani, Vandand, “50 smart cities integrated command and control centres to be
ready by 2019: Hardeep Singh Puri,” moneycontrol.com, November 5, 2018, https://
www.moneycontrol.com/news/business/real-estate/50-smart-cities-integrated-
command-and-control-centres-to-be-ready-by-2019-hardeep-singh-puri-3133781.
html.
108
The Bay Area-Silicon Valley and India: Convergence and Alignment in the Innovation Age
12 “Naya Raipur smart city operational, becomes 10th on list; check out facilities,
features,” Zee Business, June 15, 2018, https://www.zeebiz.com/india/news-naya-
raipur-smart-city-operational-becomes-10th-on-list-check-out-facilities-features-51319.
13 Puri, Hardeep S., “How the smart cities project is transforming India’s urban
governance,” Hindustan Times, July 4, 2018, https://www.hindustantimes.com/
analysis/india-s-urban-landscape-is-changing/story-4Q2gmRJhiGwRrdtv9ToTMN.html.
14 Sankar, K N Murali,”Smart City works gain momentum in Kakinada,” The Hindu,
September 22, 2017, https://www.thehindu.com/news/national/andhra-pradesh/
smart-city-works-gain-momentum-in-kakinada/article19730848.ece.
15 Puri, Hardeep S., “How the smart cities project is transforming India’s urban
governance,” Hindustan Times, July 4, 2018, https://www.hindustantimes.com/
analysis/india-s-urban-landscape-is-changing/story-4Q2gmRJhiGwRrdtv9ToTMN.html.
16 Rao, Umamaheswara, “Municipal schools don new avatar with smart campuses,” The
Times of India, July 27, 2018, https://timesofindia.indiatimes.com/city/vijayawada/
municipal-schools-don-new-avatar-with-smart-campuses/articleshow/65170768.cms.
17 Puri, Hardeep S., “How the smart cities project is transforming India’s urban
governance,” Hindustan Times, July 4, 2018, https://www.hindustantimes.com/
analysis/india-s-urban-landscape-is-changing/story-4Q2gmRJhiGwRrdtv9ToTMN.html.
18 Stacey, Daniel, “New ‘Smart City’ Hatches Solutions to India’s Urban Chaos,”
The Wall Street Journal, October 18, 2017, https://www.wsj.com/articles/
new-smart-city-hatches-solutions-to-indias-urban-chaos-1508319004.
19 “Hyderabad best Indian city in living standards: Mercer,” The Economic Times, March
15, 2017, https://economictimes.indiatimes.com/magazines/panache/hyderabad-
best-indian-city-in-living-standards-mercer/articleshow/57653013.cms?from=mdr.
20 “Smart City Mission: Tech giants showing interest in setting up smart city centres,”
The Hindu BusinessLine, April 29, 2018, https://www.thehindubusinessline.com/info-
tech/smart-city-mission-tech-giants-showing-interest-in-setting-up-smart-city-centres/
article23719938.ece.
21 “HPE and PwC Expand Partnership to Power Future Cities,” Hewlett Packard
Enterprise News Advisory, September 12, 2017, https://www.hpe.com/us/en/
newsroom/news-advisory/2017/09/hpe-and-pwc-expand-partnership-to-power-future-
cities.html.
22 “Cisco Unveils ‘Cisco Smart City’ as Model for India; Marks Next Phase of Expansion
in India,” Cisco News Release, September 23, 2014, https://newsroom.cisco.com/
press-release-content?articleId=1492392.
23 “Cisco Announces $1 Billion Program for Smart Cities,” Cisco News Release,
November 14, 2017, https://newsroom.cisco.com/press-release-content?type=webco
ntent&articleId=1895705.
24 Sarkhel, Aritra, “NetApp signs deal with Varanasi & Karnal for their
Smart City initiatives,” ET Tech, The Economic Times, July 28, 2016,
https://tech.economictimes.indiatimes.com/news/technology/
netapp-signs-deal-with-varanasi-karnal-for-their-smart-city-initiatives/53425977.
25 “Global tech giants (IBM, Cisco & Bosch) to invest in setting up smart city centers,”
Smart Cities Council India, May 2, 2018, https://india.smartcitiescouncil.com/article/
global-tech-giants-ibm-cisco-bosch-invest-setting-smart-city-centers.
26 Ujaley, Mohd, “Cisco to help Nagpur become Smart City,” Financial
Express, October 13, 2016, https://www.financialexpress.com/economy/
cisco-to-help-nagpur-become-smart-city/416132/.
27 “Cisco and CH2M Form Global Smart City Partnership, Active Telecoms,
March 20, 2016, http://www.activetelecoms.com/index.php?option=com_
k2&view=item&id=70:cisco-ch2m-form-global-smart-city-partnership&Itemid=107.
28 Sarkhel, Aritra, “NetApp signs deal with Varanasi and Karnal for
their Smart City initiatives,” ET Tech, The Economic Times, July 28,
2016, https://tech.economictimes.indiatimes.com/news/technology/
netapp-signs-deal-with-varanasi-karnal-for-their-smart-city-initiatives/53425977.
Chapter 10
Fintech: Data Puts Money to Work
1 Carney, Mark, “The promise of FinTech—something new under the sun?” speech at
the Deutsche Bundesbank G20 Conference on Digitizing finance, financial inclusion
and financial literacy, Bank of England, January 25, 2017, https://www.bankofengland.
co.uk/-/media/boe/files/speech/2017/the-promise-of-fintech-something-new-under-
the-sun.pdf.
2 “What’s Driving India’s Fintech Boom?” Knowledge@Wharton, February 11, 2018,
https://knowledge.wharton.upenn.edu/article/whats-driving-indias-fintech-boom/.
3 Kaka, Noshir, Anu Madgavkar, Alok Kshirsagar, Rajat Gupta, James Manyika, Kushe
Bahl, and Shishir Gupta, “Digital India: Technology to transform a connected nation,”
McKinsey Global Institute, March 2019, https://www.mckinsey.com/~/media/
mckinsey/business%20functions/mckinsey%20digital/our%20insights/digital%20
india%20technology%20to%20transform%20a%20connected%20nation/digital-india-
technology-to-transform-a-connected-nation-full-report.ashx.
4 “Fintech in India: A global growth story,” KPMG and NASSCOM 10,000 Startups,
June 2016, https://assets.kpmg/content/dam/kpmg/pdf/2016/06/FinTech-new.pdf
5 Gupta, Arvind and Philip Auerswald, “The Ups and Downs of India’s Digital
Transformation,” Harvard Business Review, May 6, 2019, https://hbr.org/2019/05/
the-ups-and-downs-of-indias-digital-transformation
6 “Global FinTech Adoption Index 2019,” EY, 2019, https://assets.ey.com/content/
dam/ey-sites/ey-com/en_gl/topics/banking-and-capital-markets/ey-global-fintech-
adoption-index.pdf
7 Bhakta, Pratik, “Government likely to meet FY19 digital payments target,” The
Economic Times, December 18, 2018, https://economictimes.indiatimes.com/
industry/banking/finance/banking/government-likely-to-meet-fy19-digital-payments-
target/articleshow/67034904.cms?from=mdr.
8 “Government eyes 40 billion e-transactions in FY20,” The Times of India, May 28,
2019, https://timesofindia.indiatimes.com/business/india-business/govt-eyes-40bn-e-
transactions-in-fy20/articleshowprint/69528900.cms.
9 Bhakta, Pratik, “India’s fintech companies struggle for an alternative to Aadhaar,” ET
Rise, The Economic Times, December 21, 2018, https://economictimes.indiatimes.
com/small-biz/startups/features/indias-fintech-companies-struggle-for-an-alternative-
to-aadhaar/articleshow/67186586.cms.
10 “India Fintech Report 2019: Executive Summary,” MEDICI, March 2019, https://
mediciinnercircle.com/wp-content/uploads/2019/03/FintegrateReport_
ExecutiveSummary_Final.pdf.
11 “Fintech Trends Report: India 2017,” PwC and Startupbootcamp, 2017, https://www.
pwc.in/assets/pdfs/publications/2017/fintech-india-report-2017.pdf
12 “Investments in fintech companies in India declines in 2016: Report,” ET Rise, The
Economic Times, February 22, 2017, https://economictimes.indiatimes.com/small-
biz/policy-trends/investments-in-fintech-companies-in-india-declines-in-2016-report/
articleshow/57288807.cms.
13 “Global Venture Capital Investment in Fintech Industry Set Record in 2017, Driven
by Surge in India, US and UK, Accenture Analysis Finds,” Accenture newa release,
February 28, 2018, https://newsroom.accenture.com/news/global-venture-capital-
investment-in-fintech-industry-set-record-in-2017-driven-by-surge-in-india-us-and-uk-
accenture-analysis-finds.htm.
14 Ghosh, Durba, “If fintech in India had a crappy 2018, blame the new
regulations,” Quartz India, February 22, 2019, https://qz.com/india/1556915/
paytm-policybazaar-aside-2018-was-crappy-for-fintech-in-india/.
15 “India FinTech Opportunities Review, YES Bank, 2018, http://www.yesfintech.com/
data/cms/ifor-report-2018.pdf.
16 Cooper, Julie, “Visa, PayPal top largest Bay Area financial tech list,” San Francisco
Business Times, February 13, 2015, https://www.bizjournals.com/sanfrancisco/
subscriber-only/2015/02/13/financial-tech-companies.html?s=print.
17 Bose, Shritama, “Digital payments to grow to $1 trillion by 2023,” Financial
Express, February 7, 2018, https://www.financialexpress.com/industry/technology/
digital-payments-to-grow-to-1-trillion-by-2023-credit-suisse/1055252/.
18 “RBI eases rules for foreign banks’ subsidiarisation,” The Economic Times, November
27, 2013, https://yourstory.com/2016/09/india-zendesk-morten-primdahl/.
19 “Annual Report 2010,” VISA Inc., 2010, http://www.annualreports.com/HostedData/
AnnualReportArchive/v/NYSE_V_2010.pdf.
20 Basu, Sreeradha D., “Visa Inc to enter IITs with 120 offers, Rs 22 lakh pay package, The
Economic Times, November 26, 2014, https://economictimes.indiatimes.com/jobs/
visa-inc-to-enter-iits-with-120-offers-rs-22-lakh-pay-package/articleshow/45277183.
cms.
21 “Visa Opens Technology Center in Bangalore; Accelerates Digital Commerce
Globally,” Visa news release, August 5, 2015, https://investor.visa.com/news/
news-details/2015/Visa-Opens-Technology-Center-in-Bangalore-Accelerates-Digital-
Commerce-Globally/default.aspx.
22 “Narendra Modi’s UPI massive success; Mastercard, Visa Inc lose market share in
India,” Bloomberg/Financial Express, March 26, 2018, https://www.financialexpress.
com/industry/banking-finance/narendra-modis-upi-massive-success-mastercard-visa-
inc-lose-market-share-in-india/1111088/.
109
Notes
23 “Visa releases new details on India’s Bharat QR payments,” Pymnts.com,
February 27, 2017, https://www.pymnts.com/news/payment-methods/2017/
visa-releases-new-details-on-indias-bharat-qr-payments/.
24 Sarkar, Debshis, “BHIM vs UPI: This App is Modi Govt’s Paytm With One Major
Advantage,” News18.com, December 31, 2016, https://www.news18.com/news/
tech/bhim-vs-upi-this-is-narendra-modi-governments-paytm-with-one-major-
advantage-1329801.html.
25 Boden, Rian, “NPCI, Mastercard and Visa unveil standardised QR code mobile
payments for India,” NFC World, February 21, 2017, https://www.nfcworld.
com/2017/02/21/350341/government-backed-bharatqr-launches-india-take-country-
one-step-closer-mobile-payments/.
26 “Visa And BillDesk Bring Bharat QR To More Than 300M Consumers,” Pymnts.
com, September 7, 2017, https://www.pymnts.com/news/payment-methods/2017/
visa-billdesk-bharat-qr-digital-payments/.
27 Aggarwal, Varun, “PayPal launches domestic payments in India,” Hindu BusinessLine,
November 8, 2017, https://www.thehindubusinessline.com/money-and-banking/
paypal-launches-domestic-payments-in-india/article9949289.ece.
28 Ibid.
29 “PayPal makes it easier for Indian sellers and freelancers to receive payments from
abroad,” Tech2, FirstPost, April 4, 2018, https://www.firstpost.com/tech/news-
analysis/paypal-makes-it-easier-for-indian-sellers-and-freelancers-to-receive-payments-
from-abroad-4418369.html.
30 “PayPal launches innovation labs in Chennai, Bengaluru,” The Hindu Business Line,
August 2, 2017, https://www.thehindubusinessline.com/info-tech/paypal-launches-
innovation-labs-in-chennai-bengaluru/article9798089.ece.
31 Russell, Jon, “PayPal and Singapore’s Temasek invest $125M in Indian payment
startup Pine Labs,” TechCrunch, May 31, 2018, https://techcrunch.com/2018/05/31/
paypal-temasek-pine-labs/.
32 Bhakta, Pratik, “PayPal’s revenue jumps 12x, thanks to its India arm,” The Economic
Times, January 3, 2019, https://economictimes.indiatimes.com/small-biz/startups/
newsbuzz/paypals-revenue-jumps-12x-thanks-to-its-india-arm/articleshow/67359017.
cms.
33 Rai, Saritha, “Facebook Faces Delay to WhatsApp Payments in India,” Bloomberg,
July 19, 2018, https://www.bloomberg.com/news/articles/2018-07-20/
facebook-is-said-to-face-delay-to-whatsapp-payments-in-india.
34 Mukherjee, Sukanya, “WhatsApp Inches Closer To Full UPU Compliance, enables
Scan QR Code Feature,” Inc42, March 27, 2018, https://inc42.com/buzz/
whatsapp-payments-upi-scan-qr-code/.
35 “WhatsApp is said to hasten payments push for 200 million Indians,” ET Rise, The
Economic Times, May 30, 2018, https://economictimes.indiatimes.com/small-biz/
startups/newsbuzz/whatsapp-is-said-to-hasten-payments-push-for-200-million-indians/
articleshow/64371408.cms.
36 Bhakta, Pratik, “Here’s why WhatsApp is yet to start its payment service in
India,” Economic Times, June 28, 2018, https://economictimes.indiatimes.com/
industry/banking/finance/banking/npci-meity-still-not-in-same-whatsapp-group/
articleshow/64772196.cms.
37 “WhatsApp must have an office in India to launch its payments service says MeitY,”
FirstPost, August 1, 2018, https://www.firstpost.com/tech/news-analysis/whatsapp-
must-have-an-office-in-india-to-launch-its-payments-service-says-meity-4870391.html.
38 Anand, Nupur, “What’s preventing WhatsApp Pay’s full-fledged launch
in India?” Quartz India, March 26, 2019, https://qz.com/india/1579789/
why-whatsapp-pay-is-lagging-behind-paytm-amazon-google-in-india/.
39 Lunden, Ingrid, “Google debuts Tez, a mobile payments app for India that uses
Audio QR to transfer money,” TechCrunch, September 17, 2017. https://techcrunch.
com/2017/09/17/google-debuts-tez-a-mobile-wallet-and-payments-app-for-india/.
40 Ibid.
41 Russell, Jon, “Google is supercharging its Tez payment service in India ahead
of global expansion,” TechCrunch, August 28, 2018, https://techcrunch.
com/2018/08/28/google-is-supercharging-its-tez-payment-service/.
42 El Khoury, Rita, “Tez, aka Google Pay for India, reaches 100 million installs on the Play
Store,” Android Police, January 30, 2019, https://www.androidpolice.com/2019/01/30/
tez-aka-google-pay-for-india-reaches-100-million-installs-on-the-play-store/.
imAge Credits
Cover: North Block, Secretariat Building, New Delhi photo by Laurie Jones, ljonesimages
on Flickr
Page 9: Vega Circle Mall, Siliguri, West Bengal photo by Boudhayan Bardhan on Unsplash
Page 15: Infosys campus photo by Vasudev Bhandarkar on Flickr
Page 29: Holi Festival of Colors photo by Maxime Bhm on Unsplash
Page 45: Great India Developer Summit 2013 photo by Abhishek
Page 39: Jaipur street scene photo by Eduardo M.C. on Flickr
Page 45: Great India Developer Summit 2013 photo by Abhishek Baxi on Flickr
Page 51: Bengaluru smartphone photo by Matam Jaswanth on Unsplash
Page 69: Bangalore healthcare program photo by Trinity Care Fooundation on Flickr
Page 75: Solar energy, Rajasthan photo by CIF Action/Jitendra Parihar on Flickr
Page 85: CONNECTKaro New Delhi smart cities posters photo by WRI Ross Center for
Sustainable Cities on Flickr
Page 89: New 2,000 rupees currency photo by Vishna Nath Sharma on Flickr
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