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Boutique companies like Qualcomm or Broadcomm employ thousands of engineers in India to design products but the Intellectual Property for that is held by an overseas company, and not in India. This is something that the country needs to work on, said S Krishnan, Secretary, Ministry of Electronics and Information Technology.
For example, the Apple iPhone may cost $1000 in which the total bill of materials, including materials and labour cost, that goes in to assembling the device would cost $200 or about 20 per cent.
The remaining $800 goes to the people who hold the design at Apple’s headquarters in Cappuccino. That’s where the bulk of the profit goes.
“We don’t do that design yet in India although we have the capacity. What it requires is both skill and the ability to take an entrepreneurial decision to move together to make this happen. Clearly, that’s the huge area that the country needs to focus on,” he said at the Umagine TN 2024 IT Summit on Friday.
India is on the edge of a cusp and on the point where the inflection can happen and that can take place now, given the kind of emerging technologies that we have, and given the way the start-up ecosystem is bubbling up, he said.
Software sector
Growth of technology in India and across the world has been on a multi-stake approach. Technology is one sector where the kind of public-private-partnership; the kind of academia-industry partnership that has been dreamed about and talked about happened automatically. This is something absolutely true about India. That’s what happened with the software revolution in the 1990s with government’s intervention being minimal. The industry came up with various solutions and developed in its own way. All that the government did was perhaps stay away from taxing it too heavily, and it grew.
Annually, about $245 billion software products or services are produced in India. This is a significant part of the country’s economy with nearly $200 billion being exports. This is a growing number. Digital sector or economy as a whole - $245 billion of software and another $100 billion of electronic hardware manufactured - together is almost one third of $1-trillion. “In 3-4 years, in India, we intend to grow it to around $1 trillion,” he said.
The Centre has a vision of a $5-trillion economy by 2030, and when that happens, the technology sector should be at least one-fifth of that, he said.
This sector is important to increase welfare, which is the ultimate objective of any government programme and this is reflected in the increase in terms of jobs. The increased number of jobs that are generated and the higher quality jobs that are generated are two key elements, he said.
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