Government of India is planning a Rs 10,000-crore electronics development fund to support ambitious startups in attaining scale. The government feels that India needs to incubate tech giants from its soil — like those emanating from the West —as the country has a fast-growing mass of internet users and possesses a rich list of highly-skilled techies. The basic groundwork for kick-starting the initiative has been completed. It is said that this is a different fund from the Rs 10,000-crore venture fund announced in the Budget for startups in micro, small and medium enterprise (MSMEs).
The government will not make the investments directly, but will rather route the money through venture capital funds that are focused on electronics hardware and IT startups.
Elaborating on the idea behind the creation of the fund, the source added, “Innovations are not happening in our country, products are not being made in our country. We are, at best, a labour market. Our highly-qualified boys and girls are doing research in Bangalore and other labs, but they are essentially creating intellectual property products for foreign companies. Why can’t we have our own products where we have our own intellectual property rights?”
The segments earmarked for funds include electronics, components and software. “The idea is to create a startup culture, a product culture, and innovation,” the source said. Both domestic and foreign venture capital funds will be targeted by the government to route its investments.