Decoded | FM Nirmala Sitharaman's outreach at Silicon Valley: Be part of India's growth story

Come, be part of the India growth story. This was Union Finance Minister Nirmala Sitharaman's message to investors in Silicon Valley, as she wrapped up her trip to the United States.

Speaking at a round table hosted by the CII and the US Chamber of Commerce’s US-India Business Council (USIBC), Nirmala Sitharaman pitched for collaboration with the US in financial services and emerging technologies.

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She said fintech represents a unique opportunity for sustainable and inclusive growth.

"India has the largest start up ecosystem...1 in 4 start-ups belong to fintech and increasingly becoming unicorns. 20 unicorns belonging to fintech in last 2-3 years. Digital adoption rate in India as of 2019 was 85% whereas globally it was 64%," said the Finance Minister.

There's a fintech revolution happening in India, and as a country that runs the largest financial inclusion programme in the world, and has highest fintech adoption rate globally, India has a lot to offer.

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India is home to one of the fastest growing fintech markets. At $31 billion in 2021, it's the 3rd largest in world, after the US and China. India's fintech market size is estimated to grow at a CAGR of 20% to reach $138 billion by 2023.

Global leaders from the fintech sector, from the USIBC and the CII member companies also feel fintech can power a free and prosperous Indo-Pacific.

Ambassador Atul Keshap, former diplomat and President of USIBC says, innovation around fintech will be a critical to reach $500 billion in annual trade between the US and India. The fintech sector also offers the chance to meet the needs of Generation Z and Millennials, who are tech-savvy in financial management across all economic categories, including insurance, loan repayment, and purchase or sale or investment of financial assets.

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Another big area of focus for the Finance Minister the US semiconductor players. Some call it the ‘brain’ of modern electronics, while others call it the ‘heart.’ Nirmala Sitharaman met representatives of the semiconductor industry in the US urging them to invest in India.

Last year, the govt also approved a $10bn production-linked incentive scheme to boost semiconductor manufacturing in the country, in a bid to position India as a global hub for hi-tech production. The move is starting to show results. The govt has received five proposals for setting up of semiconductor fabrication and display fabrication units worth Rs 1.53 lakh crore. Not just that, the semiconductor market of India is estimated to touch $63 billion by 2026, as per reports.

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With a growth forecast of almost 8% in FY 2023, India is likely to remain the world’s fastest growing major economy over the next few years. With healthy FDI inflows, and the macroeconomic outlook looking stable, the Indian economy is showing steady recovery, post the pandemic.

At a critical time for geo-strategic and geo-economic convergence, the govt hopes that the India-US trade partnership, can make the case for democracy through shared prosperity.