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“India Is No Longer a Back Office; It Is a True Innovation Centre,” says BV Naidu
From Software Powerhouse to Semiconductor Leader: BV Naidu on India’s $110 Billion Opportunity
Bengaluru, 16 March 2026: As India sets its sights on becoming a $110 billion semiconductor market by 2030, the nation’s technological identity has begun to shift from primarily software services to high-end hardware manufacture. BV Naidu, Chairman, Karnataka Digital Economy Mission (KDEM), and Founder and Managing Partner, StartupXseed Ventures, joined media entrepreneur Shutapa Paul on the “What India Needs!” podcast to discuss the infrastructure, policy, and talent needed to support India’s long-term sustainable growth.
Building on a Design Legacy
India has entered the semiconductor space and is already home to the world’s second-largest chip design cluster in Bengaluru, with over 350 design houses. Paul took note of India’s entry into manufacturing, saying, “From being more assembly-driven, we’re now becoming more and more manufacturing-focused, which has been on our agenda.”
Naidu agreed. “Manufacturing has been a challenge because of logistics and the capital intensity, but the good news is that things are changing with the government’s proactive stance, committing ₹76,000 crore to the Semicon India programme and ₹40,000 crore to component manufacturing facilities,” he said.
The “Beyond Bengaluru” Mission
A key theme that emerged during the conversation is the need to decentralise the tech economy—a strategy aimed at easing the strain on major metros while supporting more equitable economic growth across regional clusters. As Paul put it, “If we move away from these and create new clusters like in KDEM’s vision, then the resources can be better managed as well.”
Naidu highlighted the strategic mission to take the tech economy “Beyond Bengaluru”, noting that 85 to 90 per cent of Karnataka’s total tech industry contribution comes largely from the capital. He illustrated this vision through the example of Mangaluru, describing it as a “15-minute city” where the proximity of work to home allows professionals to maintain a high quality of life without severing their cultural ties. “We wanted industry to go wherever there is talent. Our goal is to make sure talent is continuously available in those clusters,” Naidu said.
From 1980s Gateways to 2026 Innovation
Looking back on a long and prolific career, Naidu recalled sending India’s first-ever email in 1987. Paul noted that for the younger generation, this is a reminder of the foundational work that established India’s tech presence. “When you were sending that email in 1987, did you imagine 2026 would look like this? Much of our audience may not realise that the industry was built from the ground up with proactive state involvement,” she remarked.
Naidu also spoke about his tenure as Director of Software Technology Parks of India (STPI), a government agency established to provide the high-speed communication infrastructure and regulatory support early tech firms needed to compete globally. In that role, he helped grow Bengaluru’s software exports from less than $8 million in 1991 to more than $12 billion in 2007, setting in motion a trajectory that continues today.
“The idea of the back office has disappeared. There are now more than 1,500 global capability centres in the country, and India has moved beyond that role into one of the leading centres of innovation in the world. For many of the largest companies in the world, Indian operations are now the primary or secondary hub for global technology,” Naidu said.
Advice for the Next Generation
As the Founder of StartupXseed Ventures, a pioneering B2B deeptech venture capital firm specialising in early-stage investments in sectors such as cybersecurity, drones, and space-tech, Naidu offered practical guidance for an ecosystem that has seen more than $80 billion in capital flow into Bengaluru-based startups over the past eight years.
During the conversation, Paul asked how Naidu maintains such high levels of motivation after a career spanning over four decades, particularly his willingness to mentor early-stage founders. Naidu explained that his “fire in the belly” stems from a lifelong commitment to national progress, viewing money-making as incidental to the larger cause of building India’s technological firsts.
Drawing on his experience, Naidu shared some essential advice for deeptech builders, emphasising that founders need integrity, focus, and an unwavering belief in their vision. Moreover, he added that while conviction is necessary, founders must be agile enough to pivot if needed. “Don’t become too passionate about the technology. Most technical founders become so immersed in it that they go deeper and deeper without balancing it with commercial realisation,” he warned, urging entrepreneurs to remain practical in their pursuit of innovation.
As India moves towards its 2030 semiconductor goals, the conversation between Paul and Naidu underscored the need to marry the nation’s established design legacy with a robust and sustainable manufacturing framework. By decentralising the tech economy and fostering a new generation of agile, deeptech founders, India is well-positioned to lead the global shift towards hardware innovation.
Watch Link:
YouTube: https://youtu.be/8MZiZ0arC4I?si=rzwZqyvNd7iYWBXy
Spotify: https://open.spotify.com/episode/1Ytx1r6pdNI0GFHhNkRi03
