By Reapan Tikoo, CEO, Powai Labs
Intellectual Property (IP) generation happen in small groups of bright researchers, who choose the path of uncertainty called entrepreneurship; they are and will create the Atmanirbhar Bharat; and in Electronics too.
This entrepreneurship is different from the mushroomed Unicorn start-up portals; who are based on a successful imported business model, imported capital and are for the large Indian market; and are finally an acquisition target for the domain MNC.
The problem
Our PSU and research institutes like BEL, HAL, ECIL, DRDO, ISRO, NAL etc have successfully delivered world-class electronics systems, which is commendable and make us all proud. What is amiss then? A parallel exercise within each of these entities to build equivalent of each foreign IP/Component used.
A potential solution
· Identify key technologies e.g. indigenous Processor IP Core.
· Policy impetus e.g. electronics systems used in India are mandated to build System on Chip or ASIC using indigenous IP.
· The indigenous electronics IP available in any segment, may be classified as a must-use technology for appropriate products used in India.
· Indigenous IP can be used in the implementation of a wide array of devices such as strategic electronics systems, IRNSS/GPS receivers, network routers communications, power electronics, basic mobile phone, energy meters, avionics and all of the electronics systems.
· Enhancement of the IP, if needed, can be carried out as specific development projects whenever required by the MNC/vendor supplier with the local IP partners. This can be joint research and development exercise to meet the benchmarked requirements.
· This knowledge with MNC and Vendors will improve the indigenous IP. Today our indigenous IP is stuck in a pigeon hole with no global or domestic product incorporating it.
· The vendors having market access to India, will integrate their supply chain in such a way that indigenous IP is integrated with the Product they are offering.
· In Defence purchase it should be made mandatory to incorporate indigenous IP available in respective segments. Integration with the overall products should be funded by offsets.
· Government must ensure that validated and competitive Indian Technology solutions and IPs are guaranteed market share by mandating every electronics system to have it; both for Government procurement or other non-State procurement.
Venture Funding
Venture funding isn’t available for technology development or for scaling-up despite SIDBI, IDBI, Electronics Development Fund etc have the said mandate. Sometime back we made a presentation to a VC; never heard from them. But from newspaper, got to know they had invested thirty million dollars in a portal that was to sell lingerie online to working women.
Tax Benefits
Building a sustainable start-up in research and IP generation is one of the most difficult businesses in the world. Chances of failure are high; the first field trials of product can fail and iterative incorporation of improvement till it succeeds can be time- and fund-consuming; this needs policy support from the government. Bharat remains a market and destination for cheap labour in the absence of our own industrial research capability. None of our chronic problems will be solved by outsiders, more so in strategic sector.
In 2016 NITI Ayog, for promotion of Industrial R&D, recommended the following:
1) Renewed, reintroduction of Section 80-IB (8A) of the Income Tax Act. (Tax break to non-service and non-manufacturing; only IP generating companies)
2) 10% Income Tax on revenue to be given from date of filing of the patent (today it is from the date of granting)
3) 0% GST on selling and buying of indigenous IP.
Policy impetus is awaited by Atmanirbhar Bharat!
(The author is a tech entrepreneur & the Chief Executive of Powai Labs; who has collaborated with top research laboratories and top scientists of the Country to deliver India’s first indigenous Processor IP Core AJIT; that is designed in India, every line of HDL is written in India; and is made in India; AJIT demonstrates better performance than an equivalent global processor)
