Indias Deep Tech Startups To Grow Fivefold Vish Sahasranamam Theprint

TITLE: ‘India’s deep-tech startups to grow fivefold from the current 25,000’ CHANNEL: ThePrint DATE: 2026-04-11

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Hello and welcome to The Print. I’m Deepika Mirapuri. Joining me for a conversation today from Coimbatore. The election season is here, but we are having a conversation on innovation and industrial advancement. And my guest today is Mr. Vish Sahasranamam, co-founder and CEO of Forge Innovation and Ventures. Thank you so much and welcome to The Print.

Real pleasure to be associated and thank you for the opportunity.

Our pleasure. So, where do we start? Forge has the Forge Factory, it has the academy and the accelerators. Why don’t you tell us what you do here and in the seven other locations that you’re present in Tamil Nadu trying to get incubators, companies and all up and going?

Sure. So, Forge Innovation and Ventures, we think of ourselves as over a decade and more since 2015 when we started, in over a decade and more, we’ve now emerged as India’s largest open innovation network for what we call phygital startups. So, these are hardware first, digital plus startups. And we do everything in the life cycle of these phygital startups all the way from activating these ideas into startups, into products, technologies into products, providing them the facilities, the innovation labs where they actually can rapidly prototype, go from proof of concepts to production-ready prototypes of these hardware phygital solutions, and also provide them with the market access. Because the whole concept of open innovation is about bringing the buyer, the user, the consumer, and the innovator together as early on in the game as possible. Because if you take that risk out of the equation, which means you are now closer to the end goal of building the right product as defined between the user, the buyer, and the innovator, then the chances that the product will fail is much less. So, that’s what open innovation ultimately is about. Now, in our case, what we’ve focused exclusively is in connecting industrial public sectors and the industrial corporate sectors with startups as their technology partners, innovation partners, and growth partners.

So, innovation 10 years ago, say maybe 12 years ago in 2014, looked very, very different. We were at the lower end and the lower segments of innovation. We had a lot of premier educational institutions that were looking at innovation very, very differently. It was more like a plug-and-play system than real stack and innovation per se. But that’s changing today. AI is forcing us to look at innovation very, very differently. Now, in this reimagined landscape, where do you see India changing its thought completely? And from the government side, if I may add, we have the Atmanirbhar Bharat, Viksit Bharat, and Make in India, some of those mission statements that have asked all industrialists and entrepreneurs to look at innovation differently.

So, if you look at say 40, 50 years of India’s IT services, I think information technology, the very word technology going into information technology is about 50 years old. But we looked at it purely from a services standpoint. Today we’re worth somewhere between 200 to 250 billion dollars of annual revenue coming out of the IT services sector.

You look at the post-Flipkart era from 2008 onwards, we’ve seen consumer digital internet services again riding on the wave of IT. So, you had an IT backbone, you had mobility, connectivity, you had information technology and e-commerce built on it. So, there was innovation in the business model of retail, you had the ride-hailing apps, you had the Olas and then the Ubers came in, you had fintech. We were population scale when it came to banking, insurance, and payments. Now, how did that happen? That didn’t happen because the RBI pulled the top five banks and said, “I need population scale financials digital services in the next five years.” It was startups. So, the PhonePe’s and the PayTM’s and the Google Pay’s of the world, they got it done.

So, there we looked at technology used for a certain purpose of bringing financial services into the hands of anybody that owned a mobile phone, whether it’s a banking service, a payment service, or an insurance service. So, essentially in the last 40, 50 years of IT services, fintech, consumer tech services, we’ve largely been about consuming, using, applying technology for providing certain consumer market services or enterprise market services. Chennai is a SaaS hotbed. And we’re giving the likes of Salesforce a run for its money. Zoho can operate out of Tenkasi and do a billion dollar worth of annual profits. Goes to show that the tech world is flat. But interestingly, what’s happened in the last say seven, eight years is that we’ve gone from being a user developer of technology at the very top end to actually building science and technology from the very fundamental core. So, we’re seeing a lot more of scientific discoveries.

So, you’re basically saying the first wave was about digitization, digitalization, and then you’re actually talking about building, getting into science and technology core tech.

Correct. So, take defense for example. Defense, take life sciences for example. You come from Hyderabad and there’s a very strong bio pharma manufacturing sector, but there’s also a very advanced bio pharma research cluster in Hyderabad. But the difference in the last few years, if you’ve noticed, is we’re seeing a lot more of startups come out of those bio pharma research clusters. So, which means we’re actually seeing scientists, innovators, technologists, researchers saying, “Well, I don’t want to just put a paper out. I don’t want to put just an IP patent out. I actually want to see if I can translate that into a commercial product, a commercial solution.” So, that scientist to entrepreneur, innovator to entrepreneur translation is what is playing out, coupled with the fact that venture capital today has been flowing into these early-stage research projects translated to startup ventures a lot more. And you’re actually seeing other complementary talent come along as well. So, for every single researcher, there is either a school friend or an undergrad friend who actually went into industry, picked up skills in say marketing, product management, business development, who actually can manage the commercial side. And we’re seeing all of that coming together. So, we’re seeing researchers befriend their friends who actually have those complementary skills, they get together as co-founders, and they’re able to take a research project out into the market as a startup, a tech venture. This template is playing out across the board, whether it’s the life sciences, whether it’s biotech, whether it’s defense, aerospace, all of these sectors we’re actually seeing this template play out. So, no wonder we’ve got about 25, 30,000 deep tech, deep science startups in the country. There is enough to have at least five, 10 times more of those in the next decade or so.

What actually led to that transition? Were we waiting for a mission statement because we’re no longer waiting for drugs to go off patent and say, “Look, even if I wait for those and make generic drugs, I will still make vaccines ground up, biosimilars ground up, even if they take longer, the gestation period is much longer, but I will still make drugs.” I will still make drones and not just supply parts. What and when did this really transition take place?

I think it’s largely been the last decade or more, possibly coincidentally with the launch of the whole Startup India movement in 2016. Because what fundamentally changed is that many of the public sectors started thinking, “Why can’t we buy from these startups? Why can’t we co-innovate with these startups?” I mean, iDEX, I can speak for iDEX because I had the privilege to be part of building, architecting, building iDEX from 2018-19 onwards.

Tell us a little more about iDEX.

And today, iDEX, what it has really achieved is that it’s proven a point that you can look at Indian startups as your defense innovation technology innovation both partners as well as suppliers. Today we have close to about 600 iDEX projects which are being implemented by mostly startups and a few MSMEs as well. And in all of these projects, what we’ve essentially done is to bring the military, the tri-services, the Army, the Navy, and the Air Force, and the several allied organizations in India’s defense and national security establishments, and the DPSUs, to actually work with startups and MSMEs as their innovation partners, technology partners.

And very recently, we’ve just launched the 14th edition of the Defense India Startup Challenge, the fourth edition of the Aditi challenges, and for the first time we’ve launched what is called Drishti, which essentially is about bringing DPSUs. We’ve got 16 DPSUs, the HALs, the BELs of the world. We’ve created seven DPSUs out of the Ordnance Factory Board. So, we’ve got 16 DPSUs, and each of these DPSUs have now come up with innovation challenges where they’re inviting startups to partner with them. So, essentially what has changed, just to put that in context, is that today we’re seeing a lot more of focus on trusting our technologists, our tech entrepreneurs, our startup founders to not only do the zero to one innovation, but actually go on to being a long-term supplier in any of these advanced domains.

That has tipped to a point where we’re just seeing so many of these numbers. Just one data point, just to close on iDEX. Somewhere between 2,500 to 3,000 crores worth of orders have been approved for startups that have successfully completed and delivered on their iDEX projects, which means they’ve gone past the trials and certification milestones. And their solutions have now been approved for procurement. Already about somewhere in the ballpark of 1,200 to 1,500 crores worth of orders have already been issued. So, we definitely are putting money where not only our mouth, but also where our mind is. And I think that has tipped in the last 10 years or so. And we’re seeing that now play across other sectors as well. I spoke about the maritime public sector. Huge opportunity.

Shipbuilding, maritime. I think there’s a huge scope there even when we do defense, but I’m saying core technology where we’re talking about the Indian Ocean region being the hub of the future trade.

Absolutely. I think shipbuilding is somewhere where we need a lot of innovation. Maritime sector, trade, pure trade, merchant navy. And if we have to have some sort of a control over the Indian Ocean waters, there’s a reason why it’s called Indian Ocean and not something else. It’s the only ocean that carries the name of a country. The others don’t. Which means you’ve got to have some strategic influence, and that’s not just going to come out of how you draw up maritime international boundaries, but also because of our weight in terms of our technologies, our capabilities, and all of that. Fundamentally, that whole modernization, transformation of the maritime sector will have to bring startups, entrepreneurs, technologists in a big way. So, we’re very happy that the S2i2 program that Forge is part of, we’re the program management unit working for the Maritime India Foundation, Ministry of Ports, Shipping and Waterways. It’s a replica of the iDEX program for the maritime public sector. It’s got huge potential.

Incidentally, we are in Tamil Nadu where unfortunately more than 35,000 MSMEs were shut for various reasons. But what are you doing to help these MSMEs? Sometimes it’s their own intrinsic problem where they do not want to comply with certain regulations. But for them to really get over and get into the innovation because that’s where real transformation happens. What are you doing to help them? Because on the one hand, you have real entrepreneurs who want to fly off the ground. But then, what are you doing with the existing MSMEs?

Very interesting. In fact, if you look at what we’ve done in our Hosur center, I’ll just take that as an example. Hosur is just a pure industrial city. It’s possibly 80% of its economic output is manufacturing. So, you’ve got a lot of the large OEMs, the likes of TVS, Ashok Leyland, Titan, and then you have Tata Electronics. All of these biggies who are now coming up and setting up huge factories, but you have the local MSMEs, somewhere in the ballpark of maybe 1,500 to 2,000 MSMEs just in the whole Hosur region. Now, they’ve got to trade up and go up the value chain.

What does it mean? They’ve got to go from poor quality output to world-class quality. Now, that’s not just a question of better manpower. You’ve got to upgrade your systems. I’m not talking full-fledged robotics, but if you’ve got to bring the whole digitization, digitalization, you’ve got to bring digital production, maybe even automation to some extent. And today, the OEMs are demanding that. Because at the end of the day, the OEMs are also benchmarking their suppliers to their global competitors’ supply chain. So, it’s not just my product. It’s not just my car in the market competing with another global brand. It’s the output. But if my process and if my supply chain does not compare, then the car will not compare. Which means I’ve got to really go down into my supply chain and look at, okay, can we get Industry 4.0 for example. Which means you’re now talking about affordability. Unless you innovate something locally, you cannot make it affordable. Cost is intrinsic to innovation.

Absolutely. And which is why the risk of innovation goes up if the cost of innovation goes up. So, for how long are we going to import what I call the 800-lb gorilla from Germany or Japan and try to convince these guys to get all kinds of government subsidies. No, we need that 15-lb chimpanzee, but you cannot get it out of chipping and chopping the 800-lb gorilla. You’ve got to build that 15-lb chimpanzee from the ground up.

Don’t just engage in assembly, but actually build all of it up. And we’ve seen that. In fact, if you go to our Hosur center, you’ll actually see a lot of local startups in different technologies, be it sensors, robotics, be it AI used in the manufacturing shop floor, even sustainability. Again, it’s a huge opportunity. I was talking to the former India head of Volvo, and he was telling me that in the next five to seven years, if his suppliers in India, who are MSMEs by definition, if they don’t achieve the minimum net zero goals as mandated by Volvo’s headquarters, these guys will go out of business, which means Volvo has two options. One, get your suppliers in order, and get them to achieve the minimum sustainability index, or shift your supply chain to Thailand or to Indonesia. So, that’s literally the writing on the wall. Which means in the next five to seven years, how do you get these MSMEs to engage with startups? They can’t innovate. They’re not organized for innovation. They’re organized for production.

But if we can get them to work with these startups, and there’s a lot of sort of push from the government as well. There is clearly a sense of realization both at the Government of India level, as well as at the Government of Tamil Nadu level, where they’re saying, well, at the end of the day, MSMEs are the driving force. But somewhere in at least in the manufacturing sector, maybe 80 to 85% of the workforce are jobs created by the MSME sector, which means we’ve got to move them from low skill to semi-skilled to possibly even technology-oriented jobs. Now, that’s not going to happen unless technology gets into the production floor, and then the talent supply comes from the local academic institutions. And Forge is playing in that mix. Which is why we look at talent, technology, and ventures as the three areas of our focus. We call it the three factors of industrial transformation. And in all of our centers, in all of our programs, we’re effectively trying to bring these three things to play.

Offline we were talking about a very interesting catchphrase that you had. Make in India from India, for India, and maybe even for the globe. What is Forge doing here, and how many startups, incubators are you actually mentoring and holding?

The phrase that I actually told you was hardware from India, in India, for India. And in terms of numbers, today we have about a portfolio across eight sectors. We look at mobility, defense, health, medical health, accessibility solutions, assistive accessibility, energy sustainability, climate, industrial and manufacturing. Eight of these sectors. And the work that we do is to essentially make sure that they go from a proof of concept all the way to commercialization. Typically, if you look at the journey of a startup, a digital software SaaS startup, you go from innovation to commercialization. But in the case of phygital, where there is a non-trivial hardware component, you’ve got to go from innovation to production to industrialization, and then to commercialization. For example, you’re making axial flux motors. You’re a part inside a vehicle or a fan which the OE is taking to the market, which means you just can’t produce so many numbers of these motors and assume that they will get picked up. So, industrialization becomes very important. You’ve got to work ahead of time and get past those type approvals, design acceptance gates, and then be ready to get a large order because the OE now is looking at a new product which will take your axial flux motor and not someone else’s. Which means our job is to provide those pathways for those partnerships and ensure that we create a pull. So, we go out and talk to the industry and say, “Hey, here are the kind of startups, technologies, product solutions they have, and you’ve got to come and co-innovate.” That pull that we create ultimately helps these startups to get ahead and co-innovate with these industrial majors so that the production and industrialization are no longer valleys of death. And then they can scale and go into commercialization. So, that’s been sort of our very important focus area. And to ease that, in all of our labs, in all of these centers, we actually provide a lot of in-house technical manpower. In fact, our Forge Labs, one of the divisions inside Forge, has more number of employees than any of the other verticals because that’s almost 30-32 people strong now. About 70-75 full-time employees we have. That’s because we have to provide that kind of expertise to these startups. So, they can accelerate their product development, get to market, get to integration, get to trial certification, get to production. That speed or time to market, time to value is very important.

I have something to ask you about the narrative and the acceptance of Indian companies who are actually sitting and doing innovation, engaging in all of this. How do we create this level of acceptance globally that India has arrived, Indian innovation can be trusted? Though we’re in Asia, we are sharing borders with China, but we do much better work.

I think the China plus one that played out post COVID, which was largely a short-term measure to arrest some of the supply chain issues that we were going through because we just couldn’t trust China anymore for whatever reasons. I think that China plus one resulted in many international multinational companies looking at, and I can talk for example in the context of Tamil Nadu and Chennai. Maybe 250, 300 companies, big ones have actually moved or if not have completely moved their production from elsewhere to here. At least they’ve started one other factory in Tamil Nadu. And that has actually created an awareness to what more is on offer. Obviously, they’ve been very impressed by our talent supply, particularly this state. When it comes to technical workforce, manufacturing workforce, it’s abundant workforce supply. They also got a sense of the research, say the IIT Madras research park, the deep tech hub, the capital of the country. The kind of deep tech startups that we have created.

Tamil Nadu has the highest STEM graduates.

Graduates, all of that. I think the China plus one gave the global multinationals a sneak peek into what more is on offer in India and I think that created a lot of excitement and hope about what more can we depend on India for. Startups and technologies and particularly for markets where the Indian market is huge as a local domestic market, it only makes sense to design locally, manufacture locally, commercialize locally. Why would you want to import from elsewhere and then end up making it too expensive for anybody to buy.

I think a lot of those things are definitely playing out. On the specific part about what they think of India’s innovation, let’s be honest about it. When it simply came to cost of innovation, you can’t match India’s cost of innovation.

Do you think we are right there? No, because geopolitically we’ve distanced ourselves, we are not hyphenated with Pakistan anymore. But I think innovation and science and R&D we still — there’s always this comparison between India and China. Even in a sector like PC culture, China has a five-year plan and a 10-year plan for their country and they know how to really invest in talent and in technology. Have we really been able to beat them at this game?

I think the problem is there’s a lot of opacity about the innovation capability and potential of China. You have to believe what they say. But that works to our favor. India is pretty open, you can just drop wherever you want to, you can walk into wherever you want to and you can see for yourself what the real hard truth is. I think that really works in our favor because if a large corporate multinational is making a decision to create some local capacity, they would look at the full stack, not just the very top end of just, okay, can we go to market? Can we distribute? Can we commercialize? You’ve got to look at the whole stack. I think from that point of view, India scores very high. Number one. Second, if you really look at the last four, five decades, a lot of our finest engineers have obviously gone for greener shores and global shores, greener pastures. But today, thanks to the whole Startup India movement and many of these iDEX like programs and several other programs, venture capital, domestic venture capital particularly flowing in, lots of angel networks, angel investments, there’s no dearth of money to fund a good startup endeavor to put a product or a technology in the market.

Enough funds for all sectors. Right. So, that obviously has resulted in many of our what I call 10X engineers to remain in India and to work in India and to start up in India. And I think that coupled with the fact that we are now looking at India’s engineers, top engineers as innovators. And we spoke about it offline. I said, “Well, look at what we’ve done with the best of engineering technical minds that went to say an ISRO or a DRDO.” ISRO being an exception. But look at all the others, they’ve always been looked at as either technologists or as engineers, but not as innovators and as entrepreneurs. And I’ve seen many of these former who are now in their post-retired life telling me that if we had these opportunities a couple of decades ago, we wouldn’t have had to go overseas. So, a lot of that is only an attestation to the fact that things have materially changed.

So, if I were to just pause you there and say for all the engineers, hardware, software, who are in the US, waiting to hear from you and say, “When is the best time to come back?” We talked about talent, tech, and ventures. Are the ventures that you’re supporting big enough for all of them to decide to start coming back?

Absolutely. And I can tell you without a doubt that the migration has already started. The numbers are few, but I think there is a trend. And people there, you know, my colleagues, my age group people, people who are a decade younger, we all have friends and they’re all watching us on LinkedIn. They’re seeing the kind of traction, they’re seeing the kind of progress we’re making. So, they’re all very tempted to say the least. I really think it’s a question of a trigger. Are they watching with caution or are they watching with curiosity?

Actually, it’s more curiosity.

Curiosity, yes, and hope is what is going to really make them pack their bags and come back home, so to say. And I’ll tell you I think all they need is just one trigger.

One delayed promotion and they’re back.

Or one delayed promotion. Or one wrong measure by Trump. Or maybe something went wrong in the personal life and you’re reconfiguring your overall outlook to life. I think it’s a trigger. It’s like COVID and Zoom. We never thought of Zoom as a substitute for airline travel. So, I think it’s just a trigger away. And we’re already seeing it. In fact, I can even go to the extent of saying about 15-20 of our startups in our portfolio —

Are they big enough because we’re talking about IT companies that handle a lakh people. So, are they big enough to actually start accommodating at least tens of thousands of people because it will have to begin this decade and now.

I think the quantity that you spoke about is possibly about a decade away in terms of just annual numbers of so many people returning. But I think in the next year or a couple of years, I’ll be surprised if we don’t see a few hundreds come back to India only to get employed or to be part of startups or to do their own startups. And we’re already seeing those numbers very much. The most recent being, I went to Perth about a year and a half ago and I met a Chennai boy who has worked in different parts of the world, has settled in Australia, is doing a climate sustainability tech startup. He’s now shifted lock, stock, and barrel to Coimbatore. Completely because he just was impressed by what’s on offer. And there again, the cost of his production and his innovation is possibly 1/5 if he were to do it here in Coimbatore or Hosur or Sriperumbudur vis-a-vis in Perth. And when I sold that logic to him, he just took the next flight.

So, Tamil Nadu is the Detroit, the Manchester, the Silicon Valley, perhaps also. If there’s one state that’s all of these three, the hardware part of Silicon Valley, then it’s this. But interestingly, in your TED Talk, you also talked about Tamil Nadu leading the Industrial Revolution 4.0. Suppose we were to move from automation to autonomy, you said Tamil Nadu is going to be the leader. Why don’t you tell us how you see this happening? And what the rest of India should do to be following?

The two reasons. One is if you purely look at it from the economics of manufacturing sectors. The manpower cost is only going up one way. The demand on quality, on precision, on efficiency is only going up one way. The demand on sustainability, like net zero goals, safety, industrial safety. So, if you look at all of these parameters, it very clearly points to the simple fact that you’ve got to bring more and more technology into manufacturing, into production. Now, coupled with the fact that we already are challenged when it came to manpower supply, and multinationals moving in, they don’t want to start with a factory which is more manually operated than less. They want to go robotics first. They want to go automation first. With cobots, AI, and all kinds of bots included in that.

What do our ITIs have to look different now? And do we have to offer different syllabi for us to be — because you can’t be retrofitting once you have —

I’ll put it in very simple terms. I look at manufacturing jobs as the next technology jobs. We’ve already gone past that. What I’m telling is a 6-month past story. Today, if I’m running a 500 workforce factory, I’m basically asking how many of those 500 workforce have what levels of competence and skills when it came to say digital production, intelligent manufacturing, can they operate automation systems, can they understand AI, can they manage or operate AI manufacturing systems? If I don’t start asking that question, I’m only looking at the barrel say a year or a couple of years down the line. Because if I’m a supplier to an OE and if I have a direct competitor whose promoter has the vision to actually look at his company not as a manufacturing company, but as a technology company, my writing is on the wall.

So, I have a question to ask you about two costs, very very important. In India, we live from 5 years. We have 5-year plans and we love them. So, 5 years ago, we didn’t really look at AI being such a big disruptor. Anybody who’s invested in technology or machinery, there’s a cost of redundancy because of AI coming in. Second, the cost of displacement. And I’m talking about people displacement here. The cost of redundancy with respect to investment in machinery. Second is displacement. How do you factor in these costs? And you simply cannot write them off. These are going to be sitting on your books. How do you deal with big machinery? How do you deal with lakhs of people?

I think to some extent, the marginal profitability increase you get out of say efficiency, productivity, and quality coming out of these technology investments, I think will to some extent, if not fully, at least partially offset some of those redundancy costs or sunk cost mindsets to some extent. We have to possibly look more into specific segments of manufacturing where this will play out more powerfully. That is one part of it. The other part of it is the simple fact that the change is already happening. You cannot justify that change purely from a cost standpoint anymore. Because your OE is okay to factor that additional cost as long as your value goes up disproportionately and that’s only possible if you move from the conventional manufacturing processes to a more technology digital digitally capable digitally operated process and systems.

Now, when it comes to jobs, I think it’s not very different from how we’ve seen the impact of say IT in the banking sector. For example, banking tellers substituted by ATMs. Did we see hundreds or thousands of banking jobs get lost? I don’t think so.

But I think that level of upskilling was not as ubiquitous as AI is today. AI seems like a more menacing giant, more threatening one that’s looking at swallowing millions of jobs across India.

It is, but I think that it’s not going to be in one instant. It’s going to be a gradual process. So, I’m sure there’ll be other sectors. In fact, very recently, I was having a conversation with another friend and he was telling how you’ll possibly just have more Swiggy and Zomato delivery people who possibly lost a manufacturing job. And for all you know, that services job might be more fun and maybe slightly more remunerative also. So, I think we’ll have all of those corrections happening where you lose a job in say a factory, but you possibly have gone out of that factory and you’ve picked up a local retail services job. Which is equally in demand. Which actually I’m not even factoring any amounts of skill upgrading or specialized training. So, which means if we can just bring that into play, whether it’s the government or the industry, if we can more proactively look at hey, which are those highly high-risk jobs which will go away when automation or AI or robotics or whatever it is comes in. I think if we can start preparing for those skills already, but even in the absence of that, which I think we can’t delay for too long. I think it’s going to be just one election season away.

So, what do we do with these behemoths called the Navaratnas and the Mini Ratnas? We still have the unions and we have lakhs of people dependent on them, defense, railways, banks, all of them. Some of the biggest companies. So, if you’re one election season away, we’re literally saying India has 5 years to pull up its socks and think and talk AI every single day. We were talking about PSUs, the behemoths, and how they are going to be assimilating AI and innovation. Take it away.

See, if you really look at — I think we’ve got to ask a more fundamental question. We’ve got to ask what was the role of technology in these industrial manufacturing sectors and I think that has seen a fundamental shift.

Take a simple example. Is Amazon a retail company or is it a technology company? I think Amazon is a technology company in the retail business. Retail is just sitting on top of tech. So, basically it’s tech which has created a certain right to win for Amazon in the retail business. It’s a tech platform that enables retail sales. And possibly the very reason why Amazon will win in the retail business is because of the enduring competitive advantage that it derives from technology. So, it’s a technology first company in the retail business.

About a year and a half ago, the chairman of JP Morgan actually said “I am a banking company — I’m a technology company with a banking license.”

And that’s how we have to look at all of the PSUs as well. So, technology is no more a facilitator. In fact, that’s what I was getting to. So, if you look at how the role of technology has evolved, so back in the day maybe 30, 40 years ago when the whole IT revolution started, we were looking at technology, particularly IT, as an enabler in the business. So, we went from technology enabling the business to technology operating the business. Amazon online retail is basically operating a part of the retail business using technology. So, we went from enabling to operating. Then we actually said, well, can we look at technology to reshape the business? A third of Amazon’s profits is Amazon Web Services. 40% of Amazon’s market capitalization is Amazon Web Services. So, is Amazon a retail company in the stock market or is it a tech company in the stock market? It’s always coupled with Facebook and Google. And now we have Prime Video, it’s also into entertainment now. And so, it’s gone from enabling to operating to reshaping to actually becoming the business.

My favorite example is Tesla. Is Tesla a car company or is it a tech company? If it was a car company, I have a simple question. About a couple of years ago when Tesla stock hit its highest, the market capitalization of Tesla, a single company, was actually more than the market capitalization of the top 20 automotive conglomerates in the world put together. I think it was about 700 billion dollars. So, one company, Tesla, had 700 billion dollars market cap, whereas the next 19 or 20 all put together were about 30 billion dollars less. Now, question. Why does Tesla enjoy that price premium in the stock market if it were to be just another car company? It is not. It didn’t look at itself as an automotive company. Not at all. It’s a tech company in the car manufacturing business.

So, how do we think in India now going forward? So, we talked about PSUs, but not just the PSUs, all of the other corporate companies. I think this is the same thing. So, let’s say you’re Aditya Birla Group, UltraTech, and I have a very good friend of mine who’s the — yeah, it’s your cement manufacturer, you’re a coal producer. Anand’s only job is to basically ask the question, where all can I leverage tech to create not just an incremental improvement in say profitability or in productivity or in quality, but can I actually make that technology my enduring competitive advantage? Which means UltraTech does not win because it’s got those highest access to gypsum mines, but it also has access to some AI tech which can matter in some part of that cement manufacturing value chain like no other competitor can match. That enduring competitive advantage can now come from only technology. In other words, I can’t think of anything else other than technology as the real superpower, no matter which business you are in. It’s just a question of time. So, we’ve seen that play out in banking, we’ve seen that play out in retail. You’re now seeing that play out in multiple other sectors, automotive, being one. So, we have to bring that kind of a mindset.

So, my last question to you would be — I think India is thinking right and we’re creating a lot of value, Indian startups particularly are creating a lot of value for the supporting 150 plus, 175 plus of them, but we also need volume. MedTech alone, EY and BCG, the other day I was reading a report. Of course, the variance is too much, they’re talking about by 2030, one of them said they’ll be valued at 30 billion to 50 billion and said there’ll be about 4,000 MedTech health-related startups. That’s a humongous number. Even if we were to do just half of them, I’m saying volume of entrepreneurial activity in India is going up. So, to be able to beat China, to be able to beat the US, what is Forge going to do and what does India have to do to get the volumes up?

I think we’ve got to do more of what we’ve already been doing. So, again, speaking for Forge, we’ve systematically and in a very structured manner opened up these public sectors, be it the military, be it the maritime. We in fact even opened up the urban public sector, the cities, for startups. So, we created a program called the City Innovation Exchange, which creates a direct relationship between the startups and the municipalities, the corporations, the smart city special purpose vehicles, the smart city companies, to say, “Okay, can you co-innovate?” So, I think we’ve got to ask ourselves the question, am I just going to wait for a new technology to settle, to mainstream, and then am I just going to go into the market as a buyer, or am I going to go a little early, and am I going to co-innovate because I as a corporate cannot innovate at the agility, velocity, frugality, and novelty of a startup? Which means startup is unmatched as an innovation entity. So, can I just go partner with these startups as innovators, as my innovation partner, and can I then go into market with my innovations? I think that mindset has to mainstream.

We’re seeing that in pockets. I mean, if we can get defense and now space, thanks to InSpace, we’re seeing a lot of focus and trust to promote more startups in the space sector. We’re seeing that play out in a few other core sectors as well, banking and enterprises, consumer. The D2C, the direct-to-consumer, revolution that we’re going through, the likes of Britannia and Dabur are all challenged because these guys are all eating away 10 crore, 20 crore, 50 crore, 100 crore out of your market share, and I haven’t seen Dabur’s market share grow at all in the last few years, thanks to the whole D2C revolution. So, I think India across the board, be it the consumer sector, be it the tech sector, be it the industrial sector, we’ve seen enough and more evidence that trust your entrepreneurs, trust your startups, give them support, give them the openings, unleash what I call the entrepreneurial innovation, and bring venture capital — transformation is a given. So, we’ve got to be doing more of that. The state governments, I think, have to pull a lot more weight.

There’s one big brother or beast, whichever way you look at it, called the regulator. Indian regulation, given the fact that AI is going to literally sweep across every sector, how do regulators in each of these sectors really have to measure up?

I’ll give you a simple example. I cut my teeth in the whole professional sector working for the telecom sector back in between 2000 and 2008. So, I entered the sector when it was sort of just past its peak, and then I got out before it really bottomed out. It wasn’t really good timing in that sense, but what I essentially seen is that — today for example, if you were to use ChatGPT, you’re doing it on your mobile. The connectivity, the bandwidth is provided by Airtel. And even if you were to pay $19.99 for that ChatGPT monthly user license, how much of that is going to Airtel? Nothing.

I came across this meme that actually showed that they’re estimating the value of the AI economy to about $3 billion, and they’re saying the telecom companies, which are giving you the pipes through which we access that AI value prop, is only 0.03%. If I can go back in time to when I was in the telecom sector, what we absolutely ignored is this rising phenomenon called startups. We simply did not ask ourselves, how can we — we’re not going to be innovating because we’re now on the treadmill and we got to just keep the lights on of the business. But if we can just look at pockets of our corporate budgets going into directly investing into startups or into co-innovating with startups, and if we could have created and captured value with these startups across their life cycle, today we wouldn’t have come to a situation where we have absolutely nothing to do with the AI economy. And we’ve seen Airtel had a partnership with Perplexity, and they gave all the Airtel postpaid users a free access to Perplexity Pro, but those are just very small things here or there which materially won’t matter much. Intrinsically, what have you done in terms of engaging with startups? I think the writing is on the wall. So, if you were to learn from that, we obviously have to say, how can we bring a lot more focus into engaging with startups? I think all of these sectors will have to fundamentally ask that question.

Do we need a startup regulator? India’s telecom sector is either ruled or ruined by regulation, whichever way you look at it. They’ve always been a highly regulated sector. Reasons why Bharti Airtel stock has barely moved for about more than a decade or so, just did something in the last few years. Just imagine the regulator can leverage its position and influence to say, “Well, don’t just regulate, can we also incentivize, and can we instrument the behavior of the sector to be more forward-looking and to be more investing into the future of these technologies?” I think the regulator has an enormous role to play. And in sectors like for example, mining, oil and gas, power, where there’s a huge regulatory overhang, we’re just putting some numbers out and we’re saying, “Well, as long as you comply to these norms, all is hunky-dory.” But we’re not actually going down to the next level and say, “Can you get it done this way?” And if we don’t get to that level of maybe more prescriptive policies, I don’t think we’re going to have more uptake, and we’re just going to leave it to the few visionaries that may head these PSUs or any of these highly regulated sectors. So, it’s going to be far and few between in terms of who’s going to really sort of bite the bullet and say, “No, I’m going to go double down on technology.” But if the regulator can make it more mainstreamed and be top-down policy-driven, I think a lot of these regulated sectors can be structurally opened up for technological advancements and transformation.

If I were to sum this up into four Cs, regulators — their journey has transitioned, hopefully, from clamping down to ensuring there’s more compliance to now being more cooperative with the startups and the entire atmosphere to now they have to finally say, “Let’s co-create and co-build.” That’s the way we’ll have to actually journey towards regulators and say, “I’m not somebody who’s going to watch you.” The Uncle Sam or whoever it is sitting up there is not going to be watching.

In fact, if I can take the liberty to maybe add another fifth C, I would even go to the extent saying, why not regulators play the role of championing these sectors? Who else other than regulator can actually take that stand and say, here are 100 reasons why you should do these things. And maybe there is a right way of doing these things which will actually help them because maybe they’re just caught unawares and they are saying, okay, fine. You want me to do this but how do I go about it? I understand the why but then the how and the what is absolutely unclear. So, why can’t we make that into a process template, hand it out, run some sandboxes, run some pilot programs, show them how the template works out and then give them the patience and the support and the time or even the money, the incentives that’s needed to actually scale it up. So, I think the regulator can play a championing role going beyond the four stages that you talked about. I think the days of clamping things down is way behind us but if we can just get them to be a little more aspirational, maybe visionary, I think that’s the best that can happen for India.

So, Forge has Chennai plus six in Tamil Nadu. Can we see that being replicated in the other states as well? You’re in Vizag now.

Correct. So, we have a partnership with the AMTZ and that is largely limited to the medical devices hardware startups but we don’t have a physical presence there. We’re just having what you call a programmatic engagement with them but that’s something which we definitely want to look at. Pune has always been a very important pin on the map that we want to be in because it’s manufacturing, lot of MSMEs and I think we’ve got the playbook that’s worked very well in Hosur, in Coimbatore, in Chennai. So, I think to replicate that in Pune would be ideal and in fact, we have a lot of our own hardware deep tech startups in our portfolio coming from Pune, at least more than a dozen in our portfolio. So, we feel the pulse on the ground and maybe it’s just a question of time but there is an intent to move.

Hopefully, Vizag also. Maybe the port program that we are part of. In fact, I visited the Vizag port and I felt it’s important to have like an industrial innovation hub right inside the port because the port is organized with other industrial manufacturing companies, the fertilizer companies, of course there’s the petrochemical companies, refineries. Steel now with ArcelorMittal. They’re all adjacent, they’re all neighbors. So, there’s a massive industrial hub which deserves an industrial innovation studio or a hub or a center and that’s something that we should be focused on as well. Hopefully, in the next couple of years.

Great. So, even as you keep an eye on all of your incubators and startup companies we’ll keep a watch on you and all of you stay tuned for more. Thank you.

Thank you. My pleasure. Thank you.