HTLS 2023 Day 1: Vaishnaw on India's chip manufacturing plan, high-speed rail

Vaishnaw, also minister for Railways, articulates the profound impact of high-speed rail networks, emphasizing that they transcend mere transportation infrastructure and are instrumental in shaping vibrant and interconnected economies.

“For instance, Tokyo to Osaka. When you move from Tokyo to Osaka, five cities become one large economy. It is not 1+1+1=3, it becomes 1+1+1=111. It is a multiplier effect. This effect needs to be seen at a conceptual level first.”

“So when we develop the Mumbai-Ahmedabad high-speed corridor, and in future there will be many more such corridors, what we are doing, in essence, is we are connecting Mumbai, Thane, Vapi, Baroda, Ahmedabad, Surat, Anand -- all these large economies, which are very vibrant and rapidly growing, they all become one large economy.”

Vaishnaw underscores the crucial addition to India's semiconductor plan - a commitment to nurture 80,000 talents as an integral part of the semiconductor program.

“Going forward, we will see at least two large fabs delivering world-class technology for electric vehicles, for the telecom sector, for power electronics, and for laptop and servers... In another five years from now, India will be seen as a large and major semiconductor design and manufacturing hub.”

“When we look at our strengths and capabilities, the biggest strength is design. The second strength we have is clean power, green power. The third strength is the ability to handle very complex liquids and chemicals. These are three large strengths which place us in a sweet spot, where we can become a player which is designing and manufacturing chips,” the minister says.

Vaishnaw noted that India's semiconductor policy, approved by Prime Minister Narendra Modi on January 1, 2022, has already spurred substantial progress. Within a remarkably short span of two and a half years, he said, construction has begun on the country's first chip-manufacturing plant for Micron, one of the world's top five semiconductor companies.

“Globally, the entire industry globally is about 650 billion dollars. It is going to double in the next six to seven years to more than a trillion dollars. The industry is evolving in a very interesting way,” he says.

The minister explained the core principles of DPI, illustrating its open-access and interoperable nature. He cited the Unified Payments Interface (UPI) as a prime example, where the payment core was developed using government funds through the National Payments Corporation of India (NPCI).

"We use public funds for creating a platform. This platform is open access, inter-operable, and it is available for everybody to join. Take UPI as an example. The payment core is developed using government funds by a government company called NPCI. Banks join it, payment companies join it, insurance companies join it, small and medium traders join it, and more than 40 crore users join it. Today, anybody can start a payment solution. The result is that the cost of financial transactions has dropped from 8 dollars to a few cents," he says.

Vaishnaw emphasizes the pivotal role of Digital Public Infrastructure (DPI) in India's digital transformation, shedding light on how this innovative model is revolutionizing the nation's approach to technology accessibility and the delivery of public services.

“When the Prime Minister launched Digital India, the thought process was to make an ecosystem where the public and the private sectors can collaborate in a way which opens up digital technologies to a large number of people, to open up the creative energies of people and which democratises technology,” he says.

He lauds the central government's Skill India programme. "Very recently, one SMT line was being launched for manufacturing highly complex laptop components. That line was being run by a girl trained under the Skill India programme. She is coming from Kanpur, and the confidence of that young girl is great," he said.

Vaishnaw sheds light on India's competitive standing in the electronics manufacturing sector and outlines key factors that provide the country with a distinct edge in this industry.

"First -- availability of design ecosystem, which is not there in many of the countries that are trying to compete," he says.

The IT minister heralds the astonishing turnaround of the telecom sector, describing it as an "amazingly great turnaround story." He reflects on the industry's tumultuous history, where discussions about telecom would invariably conjure images of scams and legal disputes, leading to a scenario where the sector was perceived as unattractive and bleeding.

“The industry was bleeding, there was continuous litigation. Scenario was such that nobody would like to telecom sector. Today, telecom has become a sunrise industry.”

The minister points to the importance of a stable policy regime that has provided businesses with a predictable and conducive environment for investment and growth.

“The biggest difference was a stable policy regime, a clearly defined incentive regime and a very clear focus on removing unnecessary compliances. And the results speak for themselves,” he says.

Union Minister Ashwini Vaishnaw hails India's abundant engineering talent and design expertise, underscoring the country's role as a global design hub. He outlines the tremendous potential for translating this capability into substantial growth within India's manufacturing sector, citing the remarkable progress made over the past nine years.

"Our country has so many good engineers, we are so good at design, we are designing for the world. Every large company in the world has a tech center in India. If this phenomenon can be translated into manufacturing in India, it can turn into a phenomenal growth story. And that is what has happened in the last nine years."

Union minister Ashwini Vaishnaw will be shortly in conversation with R Sukumar, editor-in-chief, Hindustan Times.