Critical and emerging technologies new frontier of India-US cooperation, says former Obama admin official

Economic Times

Silicon Valley, Critical and emerging technologies are the new frontier for India-US cooperation as technologies have gained strategic significance, a former Obama administration official from the Silicon Valley has said ahead of Prime Minister Narendra Modi’s visit to the US later this month.

Arun M Kumar, former assistant secretary of commerce for global markets and director general of the US and foreign commercial service, said India has emerged as a very strong and trusted location with a deep capability to be able to take up a number of areas that have formally been concentrated in China.
“A key area that is emerging as a focus of cooperation is technology. In fact, in the past, issues relating to strategic and trade often held centrestage. Now, we have technology that startles all of that. It startles trade, it startles strategic considerations,” said Kumar.

These areas include semiconductors, space-related applications, and emerging communication standards. In all these areas, there’s plenty of opportunity for the US and India to collaborate, and this needs to be supported by an ecosystem that will drive innovation, he said. “We are seeing plenty of that in India, along the lines of what we’ve seen in the US for several years.”

Kumar, currently the Managing Partner with Celesta Capital, the Chair of the Wadhwani Institute of Technology and Policy, and a member of the Council on Foreign Relations, said when he was serving in the Department of Commerce, the administration had the sense that strategic, commercial, and economic issues should work hand in hand. “At that point in the Obama administration, we had essentially set up a two-principal dialogue called the Strategic and Economic Dialogue. The idea of that was pretty much that strategic issues should be discussed alongside commercial economic issues,” he said. “In fact, that is what is coming to be with this focus on critical and emerging technologies. It’s interesting that the NSAS are driving it from both sides. That points to the strategic considerations of technologies, increasing importance of technology in terms of strategic considerations. That’s in my view, what’s driving. If, in fact, if you look at the discussions in forums like Foreign Affairs, you would find that over the last year and a half, technology has become much more central to the discourse,” he said.

The critical and emerging technologies initiative was launched by India and the US in May last year and is being run by the National Security Councils of both countries. He said currently China occupies a very central role in the world ecosystem of technology and manufacturing as there’s a lot of overdependence on it in certain areas for a number of manufacturing and supply chain reasons. The COVID-19 certainly brought to bear the fact that overdependence on one source is a problem. Then there have been various other reasons why corporations, and countries want to diversify their source of technological and other products, he said, The focus on diversifying away from China, or as it’s called China Plus one, means that companies and countries need to find other sources, other locations, Kumar said. “India emerges as a very strong, trusted location with the deep capability to be able to take on a number of the areas that have formally been concentrated in China,” Kumar said. “I think India is making a lot of progress in the manufacturing area. We’ve seen what Apple is doing in India. We’ve seen what Samsung has done in India in terms of mobile phones. But those are just two examples,” he said. He said there are many areas where India is progressing in terms of advanced manufacturing. Not only that, a number of Indian entrepreneurs are looking at ways to produce solutions that improve manufacturing, whether it’s the application of robotics into manufacturing or other technologies to improve the manufacturing process itself, Kumar said. “In some sense, this follows what China has done. China has had a lot of innovation coming out of their focus on manufacturing, and I think we are seeing the early stages of that happening in India as well,” Kumar said in response to a question. Kumar agreed the India-US collaboration in this sector would help reduce their dependency on China. “Very much so. That is a main major motivation for the US and India to work together will be to reduce the dependence on China. That is gonna help a lot of other countries that are similarly dependent on China, but that do not have big enough economies to support creating alternative sources within themselves,” he said. So, absolutely a major driver today for increased focus of manufacturing and innovation in India is going to be the US-India mutual need to have to have a supply chain that is not so dependent on China,” he said. Kumar said he was excited to see the growth of Indian startup sector which has been accelerating in terms of innovation, company creation, and products that are being developed in India for markets that will be really global. “So, for example, in the deep technology space, that’s one of our primary areas of focus in my firm, Celestia Capital. Now, we believe that fabulous semiconductor products from India will be a major place where there will be a lot of innovation,” he said. “We also think manufacturing is going to be a big source of value creation in India. There’s not been the case for a while, but in the last few years we’ve seen some very good examples of manufacturing becoming a source of top-class companies coming out of India,” he said. According to Kumar, the whole digitization push in India is a major factor for its progress in multiple ways. For example, the direct payments to beneficiaries is a very transformative factor, he said.