Quantum computing is the next frontier in tech, and nations are scrambling for a podium finish. India is in the running too, thanks to government focus boosting a growing ecosystem of start-ups and interest from private equity and venture capital (PE/VC). But the country will need supportive regulations to further its quantum ambitions.
Impetus from the government
When the National Mission for Quantum Technologies and Applications was launched in 2020, India became only the seventh country to have a specialised quantum mission. Today, the Mission has an allocation of USD 722.78 million. Over the next eight years, it must drive research and development (R&D) as well as create an inventive environment for quantum tech.
The Mission is just one of several government initiatives. In 2018, Quantum-Enabled Science & Technology was launched with USD 9.63 million in funding to expedite research. October 2021 saw the unveiling of C-DOT’s Quantum Communication Lab and an indigenously developed Quantum Key Distribution solution. Another initiative, the Quantum Computing Applications Lab, has the Ministry of Electronics and Information Technology collaborating with Amazon Web Services to facilitate R&D and promote scientific advances.
The India potential
Quantum technology could contribute nearly USD 310 billion to the Indian economy by 2030. The National Quantum Mission is likely to lead the surge in quantum applications across healthcare, diagnostics, defence, space, energy, and data security. This would align with national objectives like Digital India, Make in India, and Start-up India.
The National Association of Software Companies has predicted a 45% increase in quantum technology adoption, especially in the manufacturing, banking, defence, and high-tech sectors. The ecosystem is already growing, with 15 government agencies, 20+ service providers, 15-20 start-ups, and nearly 50 academic institutions operating in the space. Improvements to quantum infrastructure over the next five years will further accelerate growth.
There’s action in the private sector as well. Global giants Google, Microsoft, and IBM are running specialised programmes on quantum computing and its potential applications. Domestic player TCS is offering a quantum computing internship in partnership with IIT Tirupati, and Mphasis and IIT Madras have partnered up to fund and develop talent. Home-grown start-ups like QuNu Labs, BosonQ, and Qulabs are hitting their stride as well.
India could emerge as a hub for quantum R&D, software creation, and components and equipment manufacture. The country is on track to developing a 50-qubit quantum computer by 2026; smaller devices like simulators and sensors should become available sooner.
Vital role of PE/VC firms
Quantum computing start-ups need funding as well as strategic partnerships with PE/VC firms. Mentorship and insights from industry experts come in handy, as does the opportunity to leverage a VC’s resources, market reach, and networks. When a firm is ready to commercialise, it can lean into the distribution channels, customer base, and brand recognition of its VC partner.
PE/VC connections can also facilitate technology transfer and collaboration. Say, a start-up uses quantum tech to augment the technology of Motorola, Qualcomm, Infosys or Wipro. Such a collaboration expands the scope of quantum technology through new products and solutions.
Other impact areas are sponsoring research, collaborating with academia, establishing centres for innovation, and helping with patents and intellectual property. Support for incubators, accelerators, and industry associations connecting start-ups, investors, and scientists is also welcome.
Recommendations for a policy framework
Currently the third-largest private investment destination based on deal value, India also has a vibrant exit market, with the average exit value growing four-fold in the last nine years. That’s an opportunity worth seizing. Regulations to facilitate private financing will reduce pressure on the government and empower innovators to research and grow.
Meanwhile, enabling ease in patent applications will encourage researchers to apply for patents in India, retaining R&D investments in the country. Much clarity is required around technology patents at present, which is why multinationals often take R&D from India, develop it abroad, and apply for patents there.
While indigenous development is important, regulatory support for international collaboration is necessary too. Working with global players is key for India to make rapid gains in a fast-moving sector. Engagement with subject matter experts from overseas will enable founders to connect with analysts in international resource centres who understand the quantum industry, giving Indian start-ups an edge over local and global competitors.
Learnings from US and China
India has a large tech workforce but a small pool of quantum researchers and practitioners. To catch up with the US and China, we need more and better education and research. That’s because research investment and industry growth are closely connected. The US, current leader in quantum computing, had the most quantum computing publications between 2011 and 2020. Other success factors include its established and well-funded ecosystem, and a strong track record in researching and commercialising new tech.
Meanwhile, China has focused on a well-funded and tightly coordinated quantum programme involving academia, government, and industry. The result? A cohesive strategy that could enable China to surpass the US. India would benefit from a similar approach. Should we focus on near-term or long-term applications, for example? A targeted plan combined with research investment and an interconnected ecosystem could hold our key to success.
The article has been written by Rajat Tandon, President, IVCA