Simone Cicero 

Hello everybody and welcome back to the Boundaryless Conversations Podcast. On this podcast we meet with pioneers, thinkers and doers and we talk about the future of business models, organizations, markets and society in this rapidly changing world that we live. Today I’m joined by my regular co-host, my colleague at Boundaryless, Shruthi Prakash, who is joining from Jakarta. Hi Shruthi!

 

Shruthi Prakash

Hi everyone.

 

Simone Cicero

Thank you so much for being with us today. And today with us, we also have an extraordinary guest, the one that is sitting amongst those that are at the forefront of one of the most impressive adventures in digitally transforming public infrastructure, that of India. Welcome to the co-founder and head of Digital India Foundation and member of the board of directors and advisory of Open National Digital Commerce Platform, Arvind Gupta. I hope I said it well.

 

Arvind Gupta 

No, thank you Simone and Shruthi for having me. Yes, you called my name correct. It’s Arvind. But in a boundaryless world, I think every pronunciation is acceptable as long as it meets the certain syllables of the name. So.

 

Simone Cicero

Thank you so much. As an Italian, I hear you because nobody pronounces my name well when I speak with English people. Thank you so much. So Arvind, it’s great to have you and we’re really thankful for having your point of view today because you really played a tremendous role in envisioning and executing as well digital policy in India, which is one of the hotspots of digital innovation globally at the moment. You also previously served as a CEO of India’s MyGov platform for digital inclusion, and you also have experiences as venture investors, so you have a broad set of experiences for India, fund for startups.

 

And so you also have been teaching as an adjunct professor at IIT-BHU, which is one of India’s leading educational institution, very famous worldwide. And you also been a member of the World Economic Forum Global Futures Council. So you really have this rich perspective that we hope that we can, let’s say, convey today in the conversation. 

 

So as a first question,as an opening one, let’s say. We would really love you to maybe, for our listeners, to paint a general picture of what’s happening in India, why these convergence between the public, the private, and the open sector, as we know it, as we call it, sorry, it’s really important, and how it’s playing out in kind of redefining the way you do digital policy and not only policy, but you also do digital public infrastructure. So maybe just a framing would be really helpful as a start.

 

Arvind Gupta 

So. India had a very ambitious digital India vision, which was coined in 2014 by the new Prime Minister that was elected that year in one of the largest elections that ever happened, a democratic process, in 2014 when Prime Minister Narendra Modi took charge of India. And at that time, he coined the term that India, I see an India which will be digitize – From its villages to its cities to its colleges to its hospitals to its, you know, and the future was way back in 2014 to see how India can build its own digital future. 

 

We were at that point in time and still are the leading outsourcing destination in the world. So we, India produces more computer engineers than the rest of the world combined. And we had a prominent, and still do what is called the business process outsourcing, IT outsourcing, technology services industry. It’s almost 200 billion dollars a year. You know, we house in India about 1500 overseas development centers. So it’s a very sizable industry.

 

But what we realized is that in 2014, when the Prime Minister gave this clarion call was that can we now use technology for our internal modernization, for helping empower the poorest of the poor. And when you ask me this question, what is different about India? India’s digital model is inherently built with that theme, that it has to serve the bottom of the pyramid and the bottom of the pyramid way back in 2014 had certain demographic features. They were mostly unconnected. Their income levels were very, very low. A lot of them didn’t have very high level of literacy and a lot of them were senior citizens. So now given this, the traditional models.

 

And I will comment on the traditional models of digitization which is top-down and having worked in Silicon Valley and been an entrepreneur in Silicon Valley for many years, I can comment on that. In fact, I was at the forefront of the internet revolution when it started in the early 90s. So you know, the model of the internet was democratizing access to the world. But unfortunately, over the years, what we saw is that a few platforms monopolized it.

 

Few platforms, you know, probably the nine, 10 biggest platforms in the world control 95% of the internet traffic. It’s advertising led model. It really does not. It assumes a person has internet connectivity before it starts, you know, giving you some benefits or delivering some empowerment to you. The Indian model was a fresh thinking. Can we now not look at these existing technologies or platforms only, but build our own? Which will then serve the four sections of the society that really need empowerment. The people at large, bottom of the pyramid, the government to be able to connect directly and talk more effectively and deliver services more effectively to the citizens. Three, the existing big businesses, telcos, banks, how can we, you know, revolutionize banking or, you know, offer even low-cost internet to everybody and fourth was this whole theme of startups.

 

And that’s where we changed the paradigm. We said we can’t just build more blocks on top of existing technology. We need to build our own technology. We need to build it for the purpose of having one use case, which is, and that is the interesting part. The first use case the government thought was how we can use identity to solve for its own problem of seeding a unique identity in databases so we can remove duplicates, fakes, ghosts who were availing services of the government and you know there was a huge leakage in the government services to fix that proble. 

 

Certainly when we were doing that we realized that you know this has a lot of potential to do other things and that’s where the first extension happened and that’s where the platformization of what is now called India stack happened when we started building these interoperable layers of technology which is identity, EKYC which is paperless, and then the payments layer and then the data layer. So this is what is called India Stack. It’s built with the approach bottom up. Now why bottom up? Because we gave digital identity to everybody. It’s a biometrically verifiable digital identity which every Indian has. It’s 1.3 plus billion Indians have identity and that is really the tool of empowerment because using that you can now do EKYC.

 

What is EKYC? It’s electronic know your customer. Who uses it? All banks use it.

 

The first use case that got developed using that was we gave a banking access to 480 now about 500 million people who never had a bank account before now This is really using digital technology for empowerment. No other no other platform could do that Because they were only serving the connected we were served. We started with how we you give a bank account to somebody who’s probably not even connected to the internet using assisted modes and banking correspondence and many other technologies. But the base was identity. You used EKYC to give them access to low-cost banking. You used EKYC to give them access to the lowest cost internet in the world. And suddenly what happens, Simone and Shruthi, is that we have from 140 million internet users in India in 2014, today we have 900 million internet users.

 

We have the lowest cost of data in the world. From $4 a GB in 2014, it’s less than 10 cents a GB today. From being 155th in the cost of internet, today we are the lowest, means first, as the lowest cost of internet in the world. So long answer to your question but the motivation was start with the bottom, empower them and build, you know, use technology as the first use case because first it has to have a use case which was for government, you know, services, welfare and once that was done we opened the technology up for banks, telcos to use them. People to use them for self-servicing and I’ll explain that. And lastly, suddenly we also opened it up, open APIs that now start-ups could use it.

 

What we were giving access to banks and telecom companies, we also made startups build on top of it. So it became the essential rails to build your startup on top of it. And that is why it completely changed the model. It’s not a model which is shifted in your, as you asked the question, just the private to the public. It’s a model that has built public infrastructure, a road where everybody can build, including the government can build on top of it, their applications, startups can build, banks can build, telecom companies can build and that’s why it’s a super success open case. The road does not make any money by itself or just makes enough money to sustain itself but the whole ecosystem makes value, creates value, both in terms of serving a lot of people, saving money to the government. The government itself has saved, they’ve spent probably $2 billion in building this infrastructure, and the government has saved more than $35 billion already in plugging the leakages. There’s upwards of $400 billion of market value creation in terms of the startups, in terms of the banks that have got developed around it. So and this is the reason that this is a story for the world, because this is a story not of building few, one powerful platform. This is a story of how you can use open technology, which was the original promise of the internet, to empower every section of the society.

 

Simone Cicero 

Can I summarize this? At least this is the impression I got. In India, with the Digital India initiative, the government said there is a role we have to play, which is that of creating these enabling commons. And like for example, identity or EKYC, why we should leave it to the private sector to build?

 

It’s a responsibility of the government to build because it’s a commodity, it needs to be open, it needs to be very well governed, it needs to be open to everybody, it doesn’t need to have biases or that kind of stuff. And so it looks like, for me at least, the impression I get is that in India, we have one of the few governments that took the courage to develop infrastructure, digital infrastructure, which is notoriously you know, to build this, you not only need skills, understanding, you need capabilities and so on. That maybe some of the Western governments, you know, if I think about Italy, for example, even if there are similar experiments coming up, but you know, probably in any place we have seen such a complete approach because, you know, you started from identity, then you move into payments and then KYC and so on.

 

And that enabled, as you said, a financial infrastructure to be built, a telco infrastructure to be built. And now, if I understand well, you are moving, for example, with initiatives like ONDC, which you can maybe describe a little bit, you are moving upper in the value chain. Right now, ONDC is about e-commerce. So maybe you can tell us a bit more of how you’re moving upwards in the value chain, now into e-commerce, and what’s also coming up in other vertical sectors as I’m sure that you see the road map from your position.

 

Arvind Gupta 

So let me absolutely summarize it well, but the key thing you have to understand is that you know, initially, originally and globally, the why India’s model is being talked about today, nine years when it started, is because globally, all the governments were involved in one common thing and we have to give credit, it was the access.

 

Let’s build fiber optic, let’s put cities, give free internet, and you know, that was the aim, and India has also done that. We have something called the Bharatnet, which is digitizing and making sure that the internet reaches 650,000 villages of India, and every village has access to low-cost internet, free internet, you know, in their societies, and their communities, and their villages. But along with that, so that was, that is something the governments across the world have done, the World Bank has supported a lot of these projects and you know this is being done by government SIPPROs. 

 

The innovativeness in India’s approach was to build the application layer or this digital public infrastructure which was beyond just the connectivity to actually open up other forms of tools and interoperable APIs, which then can be used for many other things. And it started with a small success. But as you have asked the question, where did we go from there? We suddenly realized that we need our own – We are building, we are, you know, Indians are going digitalize, as I said, 900 million Indians on the internet today. Two, they are becoming, you know, we are building digital infrastructure at scale, at population scale, and I’ll talk about what we are doing. But the largest thing that we realize, that we are producing, we are the data capital of the world.

 

We are actually building and producing diverse data in languages, at income levels, gender. So if you take the diversity map. And look at the data diversity that we are producing and the data exhausts we are producing. It’s huge. Now, suddenly we realized that, you know, when people were coining the terms data is the new oil or data is whatever else, we said how we can now use data for empowerment.

 

So to answer your question, we of course put some controls on the kind of data that platforms can seek from consumers to protect their own privacy and their own you know, provide them empowerment of their own data. But beyond that, we realize that this data can be used for credit, health, for multiple things. And that is the next thing that we have done, for example. We have built on top of these three things that we talked about, identity, KYC, and payments. And I’ll talk about payments also. We have built what is called the DEPA layer. It’s called the Data Empowerment and Protection Architecture.

 

Now, what this does is, the first manifestation of this technology is the – We have built the next DPI. It’s called account aggregator. So now suppose you have multiple accounts, credit, debit, bank accounts. You can combine all of them and give a single view to a bank about what monies you are receiving, what monies you are spending, how is money coming in, how it’s going out, using the DAPA architecture. And through another OCEN through a marketplace model called open credit enablement network, you can actually say I’m looking for a credit for $300 overnight working capital credit, small traders. So far they would get a very expensive credit. Now they can use their data to announce to the world that they’re looking for credit and then people who are interested can actually use the data and can give you instant credit. And that is how it’s empowering people. 

 

So one stack is the India stack that we talked about. On top of the India stack, we’ve also built the data layer. So it’s a complete stack now. A parallel stack using this is now called the account aggregator or the open credit enablement network. That’s the second stack that is available. And we believe that in India, we will be able to democratize credit to 20 times more than what we do today.

 

Can you imagine? And micro credit, credit which is, as I said, $200, $300. Otherwise, the cost of fulfillment of that credit, acquiring the customer and then fulfilling that credit is so high that nobody gives such a low amount of credit. But with this, you can give instantaneous credit and then monitor it, receive it back, and then do a credit rating and everything else. And credit is big, my friends. Let me tell you, globally it’s a very big problem to credit to the small enterprises, to small businessmen and women, to small traders is a big challenge and the cost of credit is so high for them that you cannot imagine. One story I missed out that I think needs a mention is India’s payments network. It’s called UPI, the Unified Payments Interface. Now this is another story. It did about 10 billion transactions last month.

 

300 million Indians participate in making a digital payment. You can pay as little as 10 cents, I mean, actually lower than that, at zero cost. Now why this is a story? Because this has really empowered people, cashless, less cash society. It’s aided by right policies. And today, this is the talk of the world. You can have the German digital minister coming into India, scanning a barcode, and not worried about which app they have or not. It’s completely interoperable. They’re able to make a 10 cent payment and the other person is actually more happy to receive it because of the credit that I talked about because they’re leaving a digital footprint and they want, they know that digital footprint has a value in the future in giving them credit. So, you know, I have been enlightened so much when we talk to some of these small consumer, small traders and small, really mom and pop shops – Oh, you don’t have UPI? You’re going to pay me in cash? You seem to be an intelligent person, you seem to be an educated person. Why are you not using UPI to pay money? When people tell you on the road you feel proud.

 

And that is what has changed completely in India. It’s unlike any other country in the world, any other society in the world we have seen because everywhere else either those are closed networks. So if you have a wallet from X, you can only make payment on X or you have to have very high expensive POS machines or devices or NFC. This requires nothing and you can pay, you can pay on voice, you can pay on just a smartphone, you can pay on a not smart phone on, it has enabled for everything and that is what has completely changed the payments story globally. Everybody is looking out for it, the big companies are threatened by it because you know their business model has been disrupted of rent-seeking. So this is the complete story of India’s stack – that how from providing access to applications, to startups, to government disruption, to payments disruption, how it has cost them. And linking it with credit into the future. 

 

Now, let’s talk even more future. You talked about ONDC, which is what is a work in progress right now. We are building it as we go. As we are talking, it’s about a year ago that we did our first real-time transaction, and almost 380 days into the platform, we are doing almost 100 and what about 4 million transactions a month now and that’s a lot to say but in India the aspiration is not 4 million the aspiration is you know 40 million in the next six months and then go to 400 million like the way we have done 10 billion in UPI. 

 

So we want to scale up but what this ONDC does is it disintermediates e-commerce three ways – seller, buyer, logistics provider, all three different. You don’t need to be on the same platform to buy and sell. So as a seller, I can announce that I have these hundred things to sell. And as a buyer, can come on a messenger or WhatsApp or any other payment system and say, I’m looking for something. So the payment app is not worried about building a seller network. The seller network is not worried about customer acquisition and they can exist in different systems but can talk to each other, again the promise of the internet, and actually do this transaction. And the third party, which is a logistics partner, comes in, picks it up from the seller and delivers it to the buyer. Now, this is the simple disintermediation that ONDC is doing. But what does it do? It actually creates so much of value because you’re not taking the 25-30% commission from the seller to service a buyer. Now you can service the same transaction at 5-6%, and still the buyer can make, the buyer side can make money because they already have the buyers. The sellers are focused on just sellers. 

 

They’re not focused on acquiring customers because customers exist somewhere else. The customer, wherever the customers exist, they monetize their customers by giving them more options. The sellers focus on sellers and everybody is happy because you know, overall cost, it’s not 30% to the platform. It’s probably 5%. So it’s a 20-25% overall saving to the whole ecosystem, both the consumer is happy, probably gets better pricing. My colleague Akash and me, we have done some studies on that and you know we found that in the initial days ONDC is at most points in time cheaper without any subsidy. It’s just cheaper by natively. 

 

Arvind Gupta 

So basically it is empowering the whole consumer base, the seller base, the traders, the small businessmen and you know it’s bringing more people who have never sold online, digital first sellers online because they now are not afraid to say hey you know it’s what we had heard we are going to end up paying 20-30 percent commissions to these platforms and we don’t need to do that.

 

A lot of restaurants and all these cloud kitchens, which were actually technically just monopolized by some of the food delivery platforms are coming on board. So, ONDC is the effort to really democratize the commerce, decouple the three components of it and actually set up a new thinking. It is also because of success of the past that we are very confident that we can do this. It’s more complex. 

 

But the last bit I want to explain to you, this is very exciting. With the payments that I explained to you, 10 billion payment transactions that we do, we get payment level information. With ONDC now, we’ll get SKU level information. What does SKU means? Now what has that, not how much you are selling, but exactly what you are selling.

 

So you see now the data play will become even more interesting. You will actually get a much more richer data and that will have even more value in predicting many things, doing a lot of data analytics and credit and other things. So I’ll pause there.

 

Simone Cicero 

Yeah, I mean, just maybe you can jump in with your question and then I will touch it from another angle.

 

Shruthi Prakash 

Sure, yeah. So I think the points you’ve mentioned, right? Some of these words that stood out to me, obviously India being a diverse data capital and the whole shift towards maybe open networks, right? Like we have the ONDC, OCEN and so on. So with all of this shift happening, how does the open governance come into play? So how do you ensure that all of the citizens are openly participating in such initiatives? And to ensure that at the end of the day, let’s say the ownership of this data and what it means is to empower back the citizens, right? So how do you ensure that people come in, participate, and all of this data that’s been collected, how does that trickle back into every citizen in India?

 

Arvind Gupta 

Shruthi, you have asked three questions and I must tell you that some of your questions are wrong. Because you are mixing three issues. Number one is you are talking about governance from how the government uses technology to do governance. That’s one aspect. Two is how do we govern these networks? How do we govern these technologies that we are building? There are two different aspects. Number one, let me start with the second.

 

Most of these, and this is another lesson in you said you traverse your podcast, traverses business and your podcast traverses businesses and society. Another lesson is remember in life not technology succeeds, digital succeeds, but you also need the right organizational design to succeed. Right? And I am also, you know, a business graduate, so I have to tell you that.

 

Organizational design that we have is, in all these entities, whether it is NPCIL, which governs UPI, or whether it is the account aggregator, which is governed by RBI, or whether it is the ONDC, which is a separate company, we have set up separate entities in a public-private partnership, non-profits.

 

These are called Section 8 companies in India. These are nonprofits. The government has less than 50% stake. Another 50% stake is all the stakeholders, ecosystem players in the industry. Now the board comprises of representatives of the government and all these are the participants. So when you have a governance board, which is a fairly independent industry-centric board, then you have better governance. And as it is, by design,

 

all these platforms, whether it’s UPI or whether it’s ONDC or OCEN, you know, they have a consultative approach. Everything is made open for consultations. Everybody comes together, criticizes, gives feedback and then the network is developed, technologies developed, policies are developed and codified and it is codified in design. So all the policies are also codified in the technology so that, you know, the governance is evident.

 

There is no, if I lack of a better word, hidden switches or hidden back doors. Now that was your question number two. Your question number one was, how does the government ensure that it reaches the last mile? That’s through communication. That’s through awareness. That’s through sharing the success stories. UPI today, but also you have to understand in a society like India, which is again a very diverse society, and you said you do belong to India.

 

People are smart enough to understand what is in their own benefit. They figured out that UPI, you can transfer money without an agent. From Bihar to Kerala and from Tamil Nadu to Haryana or from Punjab to Kashmir, they don’t need to spend money to give to an agent to transfer money. They figured it out themselves and they use it.

 

It was of course the startups do their own outreach and the government does its own outreach but the consumer is very smart. Once they figure out that they save money doing this, they figure it out faster than you and me do because for them saving that 100 rupees a month is more important than drinking expensive cup of coffee.

 

Right, so that is the biggest lesson. So the government does its own outreach. I’m not saying that. Government has done a lot of outreach, a lot of money has been spent by the government. Indirect question you had is how does the government ensure that its own governance and I talked about there are four or five pillars, four pillars of beneficiaries of technology. The government has benefited by using a program called the Direct Benefits Transfer – 900 million people in India avail of a benefit of the government of India. That’s where this deduplication and the direct linking of the bank account to the mobile number and the identity number, the Aadhaar number happens. And so automatically transfers happen over a two-day period to all these beneficiaries in India. People just receive an SMS saying money has been transferred to your bank account, small or big, scholarships, maternity benefits, nutrition benefits, all come down. 900 million people, three and a half, four times the population of Indonesia, three times the population of USA. That’s how much transfer.

 

Simone Cicero 

Yes, 18 times the population of the area of Italy.

 

Arvind Gupta 

So that is how much governance the government does using technology. The last question, sorry, what was that? The third point, third or the fourth point you said about, I don’t know whether you have any more questions, but I think I kind of addressed all of them.

 

Shruthi Prakash 

No, I think you touched upon all of it. And I think I’ve seen a lot of these unfold myself, right? Being in India, I’ve seen the impact that Digital India has had. And it’s been, you know, interesting. One of the other points that you mentioned, right? Like which stood out was that you said that these points sort of trickled down to the last, you know, person in India. And I was thinking about points like reverse migration, which is happening now, like tier three and four have so many you know, let’s say, citizens who are living there, more people are shifting from tier ones and twos to three and four. And yeah, it’s been very interesting to see all of this transpire.

 

Simone Cicero 

Arvind, I have a question. I think you made a very important remark that is you don’t just need the technology but you also need the organizational structure, right? And you mentioned this more specifically with regards to the governance element. One thing that I wanted to ask you is you spoke about, for example, how the government has invested a lot in communicating these.

 

which is part of the growth strategy of any initiative. So in general, my question around ONDC, which for our listeners, as Arvin said, is more like a disintermediation networks that allows e-commerce not to be centralizing to one platform, but rather have several players in the ecosystem to originate the transactions then fulfill transactions in a cross border setting. 

 

So my question for you is, you also are an entrepreneur, you have been working with startups, so you know how it works. How do you as a digital player, as a public player, overcome the typical, two typical problems that you have when you have to bring something new to the market? One is the capability side. So how do you have the talent needed to bring a product like this to the market? Also in in Conway’s low perspective. So how do you organize to actually do not just the governance, but also the go-to-market initiative, the marketing, the ecosystem development, and so on? And as a complement to this question, don’t you believe that the private, let’s say, centralized platforms still have a massive advantage in terms of how they create these revenues that you talked about and can reinvest these revenues into innovation to lure customers in and create even if not democratic at least they create these appealing alternatives to a digitally public powered or democratically owned and managed alternative.

 

Arvind Gupta 

Let me comment on all of them. Capability. Let’s start with capability. Building the organization, building people. Biggest challenge, my friend. Never easy to find good people anywhere in the world. Especially when there’s a lot of money at play. We have built these organizations on a good combination of market salaries. I’m not saying above market salaries, but and that is the independence we get having separate companies, but also on a commitment around passion and building for the society and nation at large. So there is a combination of that. It’s not that we are on the higher end of salaries or even above median we’re probably median or below median when it comes to equivalent roles but finding talent is very difficult but it helps that we have done this before we’ve done UPI we have done in Aadhaar we have done KYC, Digilocker, DEPA we have done this before so it helps. But also it helps is India as I explained to you is the largest talent density of techno Enabled people so you know but finding the right set of people is always the right – It’s challenged, but we have been lucky enough to do that a lot of Individuals have seconded themselves taken sabbaticals, and they come and join the project And finally, gender neutral, you only need 30 good people to solve a large problem. You don’t need tons of… See, the ecosystem takes over. 

 

The core is probably about 30-40 good engineers. In every of our departments, we probably have 6-7 departments in, let’s say, ONDC. So about 200 people. And each of them are manned at best by 30-35 people. 

 

Arvind Gupta 

And that is how you do, but you don’t need, we also don’t believe in having an army of people to solve a problem. Technology teaches us that you don’t need thousands and thousands of people to do it. And that’s where our costs are low. That’s where we have, you hit the hammer accurately on the nail rather than just spraying and praying.But that answers your question on capability. 

 

On the marketing side, we’ve done this before. We popularized UPI post-demonetization. We popularized GST post the, you know, GST is the indirect tax in India, post GST. I think we’ve done this before. I’m not saying we have a perfect playbook, but we have a playbook. So we know how to do this. And again, in all these projects, there are some common people. And that is another lesson we have learned, is keep a few constant set of people in all these projects.

 

So we have done this before. We are repeating the same. We’re learning from the past. We’re building new learnings. But we’ve done this before. So we have a semi-cooked playbook, if you can use that word. We’re innovating on top of it, how to go to market, how do you do hackathons, how do you get the ecosystem involved, how do you get everybody excited in doing so.

 

And then lastly, you talked about centralized platforms and their power, their financial power is too strong. I only can say, yes, we need everybody to exist. I mean, I’m not saying one platform. It’s the consumer who will choose. It’s not you and me who will decide what will succeed and what will not. UPI’s success is because it’s consumer-driven. It’s people-driven.

 

people find it easy to use, people find it, shopkeepers find it easy to use and receive their money in real time and without paying the rent seeking costs, the 2% and 1% cost. So you know it finally is open market economics that will work and consumer economics will work and so finally consumer will decide.

 

Yes, but you know, a lot of these platforms have tons of money and you know, their investments are also welcome. So they can keep doing that. They’re increasing. We’re all increasing the pie. It’s not one against the other right now. This is you’re expanding the market. And a great example of that is when India had only, you know, let’s say the credit cards being issued by a few companies and a payment system being used by a few companies, we probably had a payment usage by 50 million people. Today more than 400 million people use some sort of a digital payment or the other. So you have expanded the market.

 

Some of this happened organically and some of it happened inorganically because of availability of easy technology Same thing will happen e-commerce is probably just about 80 to 100 million people use e-commerce We believe this number will go up to 300 million in the next few years So, you know the new consumer has to find it very easy to use it voice Just say something and buy it on a messenger on a chatbot. So, you know There is there’s a lot of evolution that will happen and then eventually..

 

We don’t also believe in India it’s going to be winner takes it all. We don’t think that there’s going to be one or two winners. We believe that there will be a marketplace of three or four big players, including the ONDC-led players. And that’s what we have seen in payments, that’s what we have seen in credit, and that’s what we are going to see in e-commerce also.

 

Shruthi Prakash

And how has to sort of follow that up, right? How has the private sector sort of reacted to all of this? How have they accommodated to this? Especially if we’re seeing, you know, interest coming in from private platforms and let’s say these interfaces that are being built through policy, when it’s being implemented to a certain degree where a number of people are adopting it, maybe it’s, you know, sort of enforced at some level, right? So I want to understand how does the private sector react to this.

 

Arvind Gupta 

It’s a tough question. There is a difference. If your question is private sector as in people who are not participants in e-commerce themselves, the current existing incumbent platforms, they react differently. Obviously, all the other 99.9% private sector which will benefit from it reacts differently, including startups and banks and telecom companies and everybody else. So the incumbents are different designed or programmed to resist it. Right, always because they don’t see, I always believe that, you know, if you don’t, incumbents need to understand innovation will disrupt them, right? The taxi drivers should have seen the Ubers coming and you know, the Ola’s and the Ubers coming and disrupting them or the Grabs or whatever else the names are across the world.

 

It’s not that their business models will get completely gone. Some of them may evaporate. I mean landline is gone today. Everybody uses a mobile, right? So there will be certain technologies that will disappear. Certain people will become coexistent in the ecosystem. And I think that’s what the incumbents need to understand, that whether they embrace innovation and become coexistent in that. That’s what the taxi guys did, by the way. They initially resisted it. They understood it. But they said this is a change that is inevitable wanted and the consumers could see the benefit of using app-based taxi services. So then what the taxi guys did, they started developing their own ecosystems. So now you can book a taxi like the way you book an Uber using an app.

 

You can use FreeNow or you can use many other, I mean I use this so I only know that but that’s what you do, right? So that’s a great example actually. And on the other hand, you know, you have a lot of big platforms, they have a lot of money, they will have to figure out whether they just exist on their own or they go work or go innovate, time will tell. I don’t have the right answer for that today but time will tell.

 

Simone Cicero 

And do you, Arvind, do you believe that in the future there may be a moment where these kind of policies, as Shruthi was saying, these kind of interfaces are actually enforced on the market? So, as I understand at the moment that this is not an enforced policy, it’s more like creating an alternative that, as you said, needs to perform great, needs to attract on the basis of the great user experience that it offers. Are you maybe thinking of in the future that the government can actually say, you know, if you are doing e-commerce in India, you have to be compliant with ONDC or if you are doing credit, you have to be compliant with OECN.

 

Arvind Gupta

Well, okay, so the government of India believes in choices. We are not a monopolistic government, we are a free economy, and we believe that there is, I mean, everybody can exist, but there, so we have Visa MasterCard also existing in India, as much as UPI is – American Express also operates. They have their own audiences, they serve that audience and they have learned to innovate. So we are not going to have a dictate anytime which says okay, you know, this is the only way to do it. But yes, where we find financial benefit both to the consumer and to the government, we will promote it.

 

Simone Cicero

That’s great. I love it, actually, that this conversation has really pushed a lot to this idea that governments have their own responsibility to contribute to the ecosystem, taking this role. Also, you said something very interesting when you said you don’t need so many people. You just need 30 great people to make great initiatives. That is a testament to the democratization of innovation that is happening at the moment all over the world. So maybe if you have to kind of look a little bit into the future, and I would like to ask you maybe a couple of nuances for this last question before we move into breadcrumbs and all. I was thinking that maybe if you can give us a little bit of an overview of what do you believe is coming up beyond commerce, of course beyond identity, payments, commerce and credit, what’s coming up?

 

And on the other hand, as a second question, how do you believe that these approaches constitute a strategic element of how India is playing its own role in the global ecosystem? So for example, how these type of infrastructures will attract business from the outside or create opportunities for cross-border collaborations and in general, augment the influence that India has worldwide thanks to its digital infrastructures.

 

Arvind Gupta 

Let me give you some haphazard answers. Means in no order. The payment system, India has already offered and is working with 22 countries.Okay, this is already in place. It’s not on paper or something. It’s actually working, operating. Singapore, Middle East, lot of neighboring countries. So you can use that. Not only that, India has offered, as part of its G20 presidency, the One Future Alliance, is to offer these technologies to all willing countries in a partnership mode. Means they will co-own it. It’s not something that we will have a back door on. We will share this technology with them they can co-develop it, go own it and run it. 

 

India has the Prime Minister’s announced India has the approach of solve for India share with the world. So, you know, and that is really the testimony that if it works in India, with the diversity, with the complexity of India, I think the rest of the world is assured that it will work in their society, their country, because I think no country can be as complex in terms of scale as well as complexity as India. So that is what I think has been the biggest outcome of the digital public infrastructure thinking over the last one year during India’s G20 presidency.

 

And that’s the reason you and me are talking today. Because this is a new lexicon, digital public infrastructure. Who talked about it three years ago when I wrote the first Harvard paper? People didn’t know what we were talking about. Right, so today we have a consensus what is digital public infrastructure. Today the world is talking about it. Lastly, what’s the future? Now that’s a very difficult question. I can’t predict the future five, 10 years down the road. I’m not George Orwell. 

 

But I can tell you that India is gonna lead the AI, ethical and responsible AI development throughout the world. We are going to lead the inclusive AI. Let me give an example. You know, the world doesn’t speak one language which is English. We speak multiple languages. Indians only 14% of Indians understand English. 86% don’t. We need to understand voice.

 

30-40% of people in the world cannot write English or write whatever language. So they need to understand voice is going to be a big, big future. So can you do voice commands? And I know a lot of big companies are working on it, but India is developing its own voice stack. How voice can be used ethically in a correct manner, in a diverse manner to really empower citizens.

 

We’ve seen the power of voice, right? Second is ethical and responsible AI, non-weaponization of technology. This is the things that we are going to see in the future and India is leading these efforts. Things like cryptocurrency. Blockchain is for good, let’s use blockchain. Let’s not confuse cryptocurrency as these private cryptos to solve for the financial inclusion problem. But we need blockchain.

 

We need CBDC (Central bank digital currency) for interoperability in the future for cross-border payments. So there is a lot of these things that I see over the next two to three years. As I said I cannot predict ten years down the road but three years this is probably three four areas that I believe that India is going to lead and the world is going to see these developments happen and rallying around India and agile policymaking. Very very important fifth point.

 

Simone Cicero

I’m curious if you see anything coming up on the energy and mobility sectors, which are very much under the spot today, if I think about energy, for example.

 

Arvind Gupta 

You know there is a there’s a big thing about so I only talked about one of the mega trends the AI ML mega trend there is a second is a green energy mega trend which I have not talked about in this conversation and then there is a supply chain the supply chain plus the new China plus the supply chain plus the new supply chain movements resilience and movements that are happening and the fourth is human longevity. I call these 4 mega trends that are happening in the world, the AI ML mega trend, the supply chain mega trend, the green energy transition and the human longevity mega trend. So I have not talked about the other three, we kind of concentrated within the AI ML which has digital public infrastructure built into it.

 

Simone Cicero

Right. Just a little bit, a little quick question. You mentioned crypto. Do you see really the need for this third space that the crypto ledgers allow? So this idea that you can create these kind of middlewares between parties that are based on crypto technology, crypto graphic technologies to ensure that they have trust for parties really playing out.

 

Arvind Gupta 

So  let’s be very careful in the terminology. Number one, blockchain, anything that is built around blockchain using cryptography, which is better encryption, is okay, welcome. There is going to be some regulation around encryption and things like that, but you know anything that uses Fundamentally the blockchain technology. I’m not going to confuse that with cryptocurrency  Our problems are with cryptocurrency. We need a uniform and harmonization of policies around cryptocurrency and And anything that is central bank digital currencies, which are backed by central banks is going to be the future so just to give you my context, that is why I repeated that.

 

Simone Cicero 

Okay, cool. So as we close the conversation, I would like to ask you a couple of break rams for our listeners, so anything that you want to suggest to maybe get deeper in understanding what are digital public infrastructures are, why they’re important, or more generally, since you have such a broad, let’s say, experience and point of view, anything that you believe our listeners should catch up with based on your wealth of knowledge.

 

Arvind Gupta 

I think, we have to change the way we look at big tech and technology. The internet was meant to empower the common citizen of the world, the common habitat of the world. I think time has come back to change the Web 3, 4, 5, whatever it’s going to be in the future, to the power of being really decentralized to the last person. And I think there is a lot of good hope with digital public infrastructure.Governments across the world are realizing the benefits of it and I think lastly we need to ensure that technology is not weaponized but it’s used for welfare of the humankind and it’s not controlled by a few but the governance is much better than what it is today.

 

Simone Cicero

Thank you so much. So again, thank you so much also, Shruthi, for being with us today and with your questions.

 

Shruthi Prakash

Thank you. Thanks Arvind, especially for joining. It was great having you on the podcast. 

 

Simone Cicero 

Yeah, I hope you also enjoyed the conversation, Arvind.

 

Arvind Gupta

Thank you very much.

 

Simone Cicero

It was great to have you. So for our listeners, check out our website, Boundaryless.io/resources/podcast. You will find Arvind’s episode with all the notes, the links to all the fantastic technologies we discussed. And until we speak again, remember to think Boundaryless.