Allow Indians to work on US defense projects: Indian-American VC ahead of PM Modi's Visit

Silicon Valley: Ahead of Prime Minister Narendra Modi's state visit to the US, an eminent Indian-American venture capitalist has said Indians should be allowed to work on US defense projects as it would give a big boost to the bilateral ties and reduce the cost of innovation in the US defense sector.

Prime Minister Modi, when he comes here, should ask for that, said Venkatesh Shukla, general partner, Monta Vista Capital, and former TiE Global chairperson.

Opening up of the US defense sector for Indian software companies would help reduce the security vulnerabilities of the US defense sector, would give a big boost to bilateral ties, boost the innovation ecosystem in India and reduce the cost of innovation in the US defense sector, he asserted.

"One area that is huge here. It's completely untapped by India, and that area is ..it's software for the Department of Defense and all the critical infrastructure," Shukla told PTI in an interview.

The former chairman of TiE Global said the critical infrastructure in this country is all vulnerable to cyber-attacks.

"Because they're running on COBOL, running on 30-year-old Linux systems, they're running on operating systems that have known problems. The US just does not have enough manpower," he said.

"If an Indian sitting in India could work on that project. So instead of spending USD200,000; now you spend USD30-40,000 increasing the capacity to improve the system several times.

"But Indians are not allowed to work on defense projects. Ability of Indians to work on defense projects, ability of India to work on critical infrastructure projects in the US. It's a massive opportunity. Massive opportunity. And, if I were to give one advice to Modi it is that. Ask for that," Shukla said.

"The highest levels of the intelligence community here sweat every day that rogue countries or rogue agencies from these countries could attack and paralyze the key systems here, the critical infrastructure here. It's just a matter of choosing the time and opportunity. They know it. They just don't have a solution for it. Solution is standing right in front of them," he said.

"It's not that they don't wanna do. It's that people don't know what to offer to India. India does not know what to ask for. I'm telling you this is the truth," Shukla told PTI. "Indian citizens should be allowed to work on your defense software projects." "Right now, the US is trying to sell India the armament. Instead of selling the armament, you say, we'll give you business. Now India has money to buy or whatever. The US doesn't know what to offer India. India does not know what to ask for. I'm telling you at the, at the highest level, it's a complete win-win relationship," he said.

Shukla said India is on the cusp of becoming a global hub of innovations, but for a set of necessary reforms including bureaucratic structure and cumbersome compliances.

It’' very pleasing and satisfying that India has become one of the biggest centers for startup innovation, he said. "If the policies were to become more favourable, India would be after the US, India would be the place where the innovation for the rest of the world will come from. There's a lot of things to be improved," he said.

Among the major hurdles that the Indian Startups face is compliance burden and red tape, he said.

"There are a lot of things. The burden of compliance. But the fundamental thing is there's a political will to make things easier for the startups. Why doesn't it happen? The reason it does not happen is that each agency, each department, they don't have a shared collective understanding of what the desirable outcome is. And if we don't have that, then each one optimizes what they think is best for it," he said.

“So, if you are a multinational company based in India, small startup, which has branches all over India, the reporting requirement to RBI and, and permission requirement, even for small transaction is so high that people decide that, let's just set it up in Dubai; let's just set it up in Singapore," Shukla said.

"As soon as you have operations in more than one country, the setup in India is the compliance burden and the speed of transaction is not what is needed," he said acknowledging that while the atmosphere inside the country is startup friendly, it doesn't provide enough incentives to become global.

"This is not because people don't want it to be global. It's because each agency, the Ministry of Corporate Affairs, has its own set of laws. RBI I has its own set of things. SEBi has its own income. The Income Tax department has its own. And some of these things work against each other. That's where the problem is," he said.