November 01, 2015

Modi’s Visit to Silicon Valley & Digital India

Debesh Das

THE visit of Narendra Modi to the world’s leading tech hub, Silicon Valley, and his meeting with giant IT companies like Google, Microsoft, Facebook, etc, have made an extreme media hype. The corporate media campaigned in such a tune as if Modi had uplifted this country to a new level of technological advancement through his visit. There is no doubt that Indians may use more smart phones, more high tech cars and other high tech appliances in future, but that does not mean that India will be technologically advanced. The question is, how much of these high technology products (both software and hardware) will be produced in India? Answer is – almost nil. Modi’s visit to Silicon Valley did not make even a small step to change it. 

Silicon Valley, the nick name of the southern part of San Francisco of USA is home to many of the world's largest high-tech corporations. The word "silicon" originally referred to the large number of silicon chip innovators and manufacturers in the region. The place was born due to several contributing factors including the involvement of scientists from Stanford University bringing new innovations leading to products, venture capitals and also spending of US department of defense. Thousands of tech startup companies started their journey from this place bringing new innovations in the world. Most probably, it is the place of the highest concentration of high-tech workers in the world. 

Through his lecture at the Silicon Valley, it was evident that Modi always delivers his speech depending on the audience; in the gathering of techie people he never spoke of what he, his party and RSS generally said in public. For example, he did not mention what he had told previously while inaugurating the Global Healthcare Summit in Ahmedabad on January 3, 2014 as the then chief minister of Gujarat. He said,    “We worship Lord Ganesh. There must have been some plastic surgeon at that time who got an elephant’s head on the body of a human being and began the practice of plastic surgery……Mahabharat says Karna was not born from his mother’s womb. This means that genetic science was present at that time." Ridiculing the present advancement in science and technology in the world, Modi’s people are always claiming that this advancement had already been there in vedic age and also his government is funding to promote vedic science and even astrology. No, Modi did not mention these in his lecture, he did not claim that what modern science and technology is innovating today, all were already invented in vedic age. Rather, he said: “It (Silicon Valley) is here that new ideas see the first light of the day.” On the one hand, he wants to take the consciousness level of his countrymen to ancient age by glorifying vedic age, by distorting history, by claiming myths to be a reality, by communalising the people and on the other hand, he wants to talk about high technology and use it simply to communicate with the masses.



In his lecture, Modi expressed his vision to digitise India: “We want our 1.25 billion citizens to be digitally connected.” In India, 24 crores of people are using internet. Though this is very low with respect to percentage of the total population (19 percent), but in the sense of total number it is really high as India is third in internet users among all countries – after China and USA. In China, 64 crores of people use internet, which is 46 percent of the total population. In mobile usage, India is second to China among all the countries. About 96 crores of mobiles are there in the hands of 125 crores of Indians, whereas 127 crores of mobiles are there in the hands of 137 crore Chinese. If internet and mobile connections are to be provided to everybody, then what we first need is the infrastructure – the infrastructure of fibre optic network throughout the entire country and some towers to connect the mobiles.

This network is similar to that of a general transport system. In our country, we have highways, roads, lanes, etc or railway lines through which the carriers of people, say buses, cars, trucks or trains are moving from one place to other. Similarly, Google, Microsoft, Facebook are the carriers of data/information. Now, to build any highway, nobody contacts a  car or a bus company. If there are highways, the vehicles will definitely come on their own on these highways. Google, Facebook, Microsoft, Apple will definitely not build these broadband highways. Moreover, building infrastructure is not their job. Do Tata Motors, Maruti build roads? India has to build this infrastructure on its own – nobody will do it.

Almost 86 percent people of Japan and Germany use internet, but for that, the head of States of these countries had not to meet these companies. China, the first in mobile and internet users, had not to go to Google, Microsoft and Facebook to make a digital China. Not only that, China does not allow Google, Facebook, Youtube, Twitter to enter into the country. Instead of Google, they use other search engines. The main objection of China about Google was that they were sending the data related to communications of Chinese people in internet and emails to the outside of the country. And now, after the disclosures made by Snowden, we all know that yes, it is a fact that Google, Facebook, Microsoft are in agreement to send all their data to the National Security Agency (NSA) of USA for spying the people who are using the service of these companies.  China is more cautious now after the disclosures of Snowden. The question may be, how is China doing well in digital world without using Google, Facebook, Youtube, Twitter? Statistically, the performance of Chinese people is very good. In the number of social media users, Facebook, produced in USA is first (118 crores). Who is second? – QQ (83 crores). Who is third?- Qzone (63 crores). Both QQ and Qzone have been produced in China and are mainly used by Chinese people. A Boston Consulting Group study found that Chinese internet users were online for an average of 2.7 hours per day, considerably more than other developing countries and more on par with usage patterns in Japan and the United States.

Modi knew very well that he did not need these companies to build the main infrastructure for internet and mobile telephony. But his purpose was served. He got the media hype and could bluff some people that he would be building great India with the help of these great companies. He made these companies to announce something for building infrastructure. Those are only the last mile infrastructure and very meagre in comparison to total infrastructure we need to connect the whole country. Let us have a glimpse on what these companies promised. It looks like a promise, but definitely not without cost.


During his stay at Silicon Valley, Google announced that it would help in some infrastructure by adopting 500 railway stations for providing Wifi. How will Google do it? Definitely Google will use Railtail, the existing fibre optic network of railways. The situation is just comparable to constructing some very short blind lanes emanating from a long highway to go to adjacent houses in some places. Moreover, Wifi technology is not at all the specialisation of Google. There are other companies in the market.  In some airports of the country, there are already some free Wifi connections given and they are running well. Wifi can be provided by many companies in India and generally nobody calls Google for building Wifi as it is not their job.   Microsoft announced that it would help in using the white spaces in TV broadcasting to reach India’s villages, as well as make more investments. This investment means business, purely sale of Microsoft products in our country with the backing of government. By using more and more proprietary software like Microsoft, we will enter into the vicious circle of spending more and more money.  Microsoft also intended to build data centres in India. As Microsoft is in agreement with the NSA, it is obvious that it will send all the data of these data centres to the NSA. Facebook also expressed desire to provide its internet. Obviously, it will be a limited internet; Facebook will decide what people should see. It is contrary to net-neutrality. None of these companies offered anything which would create any mentionable employment in the country.




By praising Modi’s visit to Silicon valley, T V Mohandas Pai, former director of Infosys said – “Microsoft, Facebook, Google and Apple, who want to own the whole world digitally, saw in Mr Modi the answer to their dreams.” He is absolutely correct. Two truths are there in this statement. One, these companies want to monopolise the whole digital world. Obviously, for that purpose they don’t want to allow others. But there are so many obstacles to fulfill their dream. First of all, China, the biggest market in the world does not allow their entry. Even in some other countries, the use of free software is increasing instead of proprietary software. After China, the second is India. Obviously, multinationals are very interested in this market.

There are many advantages for multinational IT companies for doing business in India. Firstly, proprietary based software is dominating Indian market. Practically, neither the government nor the major IT companies are giving priority to free and open source software instead of proprietary software. Secondly, the major income of big IT companies in India is coming from outsourcing. Thus, in general, they are less interested in the domestic market. Of course, the software to be built for outsourcing may not be easy in many cases – Indian software engineers have that talent to do that. But, there is not much encouragement to build new software products in the country. There is no intention of the government to replace the software being exported from outside by Indian software products. Private IT companies have not much interest to produce new products, because that may not give quick money as that obtained from outsourcing. Thirdly, though Snowden has disclosed that United States is spying the world with the help of these multinational software giants, unlike many countries Indian government seems to be not at all worried about it. Lastly, the country got such a prime minister at present, who is interested to open the Indian market for multinationals as quickly as possible and at any cost. Indian market and Indian prime minister, both are ideal for multinational IT companies. There lies the second truth in Mohan Das Pai’s statement that these companies saw in Modi an answer to their dreams. As Modi is serving the interests of US companies, it is also quite obvious that US media is happy to highlight him. And that has really happened during Modi’s visit to Silicon Valley. 

But, what else Modi could have done in his visit? Instead, he could have learnt in Silicon Valley how start-up companies are growing there with their innovations in an echo system of educational institutes, venture capitals, and concentration of talent pools.  He could know the history of Silicon Valley where he could find that a big role had been played by the US government to promote this region. He could plan – what additional role his government should play to replicate this idea of building products in his country where Indian companies are in general reluctant to innovation? Modi is doing nothing about it. On several occasions in the country, Modi spoke about ‘Make in India’. He could have learnt from Silicon Valley that many innovations are first coming from small start-up companies. For ‘Make in India’ project, he has to promote these start-up or small companies and he should think what policies his government can take to promote them.

Whatever growth we are seeing today in Indian IT industries, it has happened due to Indian government’s pro-IT industry tax policies through STPI. The policy was, an IT company registered under STPI, small or large, and irrespective of its location in India, was eligible get tax benefit if it can export. Indian IT companies got benefit from this policy and many small companies of the past have become large today (for example, TCS, Wipro, Infosys, etc). The last UPA government withdrew this tax relief. This has caused the extra burden and uneven competition for small IT companies, because those who have become large are still getting high tax-relief by relocating themselves to Special Economic Zones (SEZ), where several tax reliefs and concessions are there. Any small company has not that money to purchase such a huge land (minimum requirement is 25 acres) for an SEZ. Though some big realtors (DLF, Shapoorji Pallonji, etc) have created some rental space in SEZs, it is not possible for a small company to afford high rent demanded by them.   Is Modi going to revert back the steps taken by the last UPA government, or will he make a policy such that large and small be at par in terms of getting government benefits? No, he is not going to do that. The Congress and the BJP have the same economic policy and these small companies have no money to donate to the  election fund of the BJP. So, the question of promoting them does not arise. Modi’s ‘Make in India’ slogan is only there in his speeches, but not on ground.

Modi’s visit to Silicon Valley is clearly a give and take scheme. Modi offered these IT companies to have their business more in India with the backing from his government. They gave him high media hype. These companies will transfer all data/information to National Security Agency. In return, they will control their software in  such a manner that Modi gets large campaign through internet and social media, any other campaign that is not in Modi’s favour may be either blocked or slowed down (users tend to divert themselves from the website if they do not get what they are looking for within 8 seconds). As Indian large IT companies are interested and dependent more on outsourcing instead of Indian market, they want connection and collaboration with the foreign companies to expand their market outside India. Naturally, they will be happy with Modi’s attempt to open Indian market for multinationals, with whom they want to make connection and establish collaboration. For this, there will be no problem for Modi to get support from corporates and corporate media in India. As self-campaign is the main motto of Narendra Modi, the question of country’s real development naturally does not arise in his agenda.