As the Covid-19 pandemic continues with its onslaught against humanity, the economies of countries around the world, especially India, are increasingly being savaged due to the impositions of lock-downs in order to curb the spread of the coronavirus.
Much has been said about the link between the most populous country in the world i.e. China with the Covid-19 pandemic which is unsurprising to say the least given the fact that the epicenter of the pandemic is located in the city of Wuhan in central China.
The Chinese Recovery
Nonetheless, China has managed to recover slightly from the economic devastation caused by the Covid-19 pandemic as it recorded a gross domestic product (GDP) growth of 3.2% for the second quarter of 2020 after having shrunk by 6.8% in the first quarter.
Across the Sino-Indian border however, things are not looking good for India with the International Monetary Fund (IMF) projecting that the country’s economy would have contracted by 4.5% come the end of 2020.
To make matters worse, the capital of Tamil Nadu state i.e. Chennai which is home to 15 million Indians have had to reimpose lock-downs in mid-July 2020 following a surge of Covid-19 infections in the city.
With the Covid-19 stranglehold over the Indian economy not looking to be loosening any time soon, the country can certainly make do with some positive developments which have taken place in the local technology sector.
Though the recent geopolitical tensions with neighboring China over a long-drawn territorial border dispute dating back to be the 1940s has somewhat thrown a spanner in the works; nonetheless, it is not all doom and gloom for as the saying goes, “every cloud has a silver lining”.
India’s Technology Sector: Rising to the Challenge
From the outset, it is notable that there has previously been friction between China and India particularly in relation to the former’s Belt and Road Initiative (BRI).
Notwithstanding the avowed goal of the BRI of promoting infrastructure development and accelerating the economic integration of countries located along the historic Silk Road, India has refused to be part of the BRI as it perceives the BRI as being part of China’s policy to unilaterally expand its power.
Following its failure to convince India to be part of its BRI, China has resorted to flooding investments into India’s technology sector. According to a report titled “Chinese Investments in India” published by India’s think tank Gateway House, China has invested an estimated US$4 billion in India’s technology startups in the five years period ending May 2020.
In terms of the net effects of the investments, 18 of India’s top 30 unicorns are Chinese-funded. Safe to say, China is no small fry in India’s technology sector. Following the military skirmish along the Sino-India border in July 2020, Indian’s Prime Minister has imposed a ban on 59 Chinese applications and issued a clarion call for the development of more home-grown applications.
In terms of its startup ecosystem, India has the world’s third largest startup ecosystem which consistently records annual Year-on-Year (YoY) growth rates ranging from 12% to 15%.
In the particular context of technology, India’s technology sector which is home to an estimated 8,900 to 9,300 tech-based startups with two to three new ones being born everyday certainly has the mettle to live up to Prime Minister Modi’s clarion call.
India’s Economic Sector: Rising from the Ashes
Further testament to the levels of global confidence in India’s technology sector is the recent announcement by Sequoia Capital India that it has managed to secure investments amounting to US$1.3 billion from limited partners (LPs) for two new funds aimed at supporting the growth of startups in India as well as those in Southeast Asia.
It is certainly no small feat to have been able to raise such a colossal amount in these dire economic times whereby this is a sure-fire sign that India’s technology sector can give its Chinese counterpart a run for its money.
The destabilizing effects of the Covid-19 has highlighted the fault lines of our capitalistic global economy. Nonetheless, if India is to rise from the ashes of economic destruction left by the Covid-19 pandemic she would have to harness the capitalist spirit of every man for himself by trusting no one but herself through being self-reliant in her quest to attain technological supremacy which would pave the way to economic recovery.
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Combining his professional experience as a corporate legal practitioner with his knowledge of blockchain, Ming Sen finds it fascinating to explore the endless possibilities of blockchain particularly in the regulatory domains of the financial services and capital markets sectors.
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