It’s time for Israeli engineers to wake up in the morning and think of India and its market potential, says Aaron Mankovski, managing general partner, Pitango Venture Capital, Israel. The chairman of High Tech Industry Association spoke to Nivedita Mookerji on the significance of stepping up people-to-people and company-to-company interactions for improved industrial ties between the two countries, during his recent visit. Edited excerpts:
There aren’t too many tie-ups between Indian and Israeli technology companies. What is the reason?
We realise India and China are big markets for us. We have been involved with China for a few years before India. Now, we want to focus on India too since we believe there’s a large market for Isreali companies here, especially in terms of affordable innovation. In Israel, we have a huge amount of technological innovation, but don’t have a local market. For several years, Israeli engineers used to get up in the morning and think of the US, its cost structure, customers etc. We need to work on a way so that, at least, some of the Israeli engineers start thinking India in the morning. If India has a huge market, we should be there.
When do you see the 'think India’ movement will take off?
It’s happening already. But it is a process, you need time and, therefore, patience. Israeli government had a programme last year to promote the local companies’ participation and tie ups in India. What is important is people-to-people interaction. The focus would be on broadband, content, and a lot of technology. I understand the Indian government is going all out to step up its thrust on infrastructure and technology in the next five years, with a spend estimated at $50 billion. There’s a large window of opportunity there.
How do you plan to improve the industry ties between the two countries?
We need to increase interactions, especially with life sciences and telecom companies. We went through the same process of interactions with China. It took us 10 years to get things going with China. In India, Israel’s business is mainly in defence, right now. We need to get into civilian areas. The innovation taking place in life sciences, medical devices, biopharma, and health IT is amazing.
What is the purpose of your India visit?
We have, over a period of time, developed a strategic relationship with the industry, mainly through the Confederation of Indian Industry (CII). We are holding discussions on several events that we plan this year. In May, we have the health sciences summit in Israel. Then there’s an ICT conference in September in Israel where we expect a delegation and keynote speakers from India. In November, there’s an innovation summit in India where Israel wants to participate in a big way. We plan to bring startup companies and showcase Israeli technology here.
Is there any short term and long term goal that you have set for ties with India?
We have to realise there’s a very limited business that you can do through Facebook. If you want to do serious business, it has to be face-to-face and through interactions. There are no short cuts here. Also, the more success stories we see, the better it would get. That, in short, is our goal.
Do you think the spirit of entrepreneurship is missing in India?
I don’t think the spirit of entrepreneurship is missing, but the pace is slower than in many other countries. You do see so many Indian entrepreneurs in the US. Indian entrepreneurship is slow paced at times because they don’t want to take big risks in terms of money and other things. Venture capitalists allow you to do that, but the model is still not widespread in India.
You met Sam Pitroda, who’s known as an IT czar. Is there any partnership being planned between Israel and India?
Under the India-Israel forum, where Sam Pitroda is a key member, we are discussing bilateral funds to encourage trade between the two countries. The forum, which has members from the industry and government, is discussing specific verticals. In India, food and energy are top of the agenda. And there’s a huge investment in broadband in the country. We want to tap the opportunity. I think India has a great understanding of how technology can contribute to growth.
India is in the middle of a very ambitious project—UID or unique identification project. Will organisations and companies based in Isreal want to be a part of it?
I don’t know about this specific (UID) project. But on similar lines, Israel is into biometric ID cards, unified medical record etc. There’s a possibility of the two countries exploring partnerships in areas like these.
How do you look at the investment climate in India right now vis a vis venture capital (VC) funding?
There are quite a few funds which are active in India. At the end of the day, we will see steady growth in this sector. There’s an innovation DNA in India.
When you talk of VC funding, which are the sectors that are important?
Telecom, broadband, life sciences, food, agro business and energy are among the areas of interest.
Which are the other countries important for Israel?
The US has always been important. Europe, too, has been a major market for us. But as I said, there’s a strong shift to this region—India and China.
Is the strong shift also because of the economic slowdown in the West?
Lifestyle products and consumption levels have been the biggest drivers, but the economy has also had an influence.
What are the main challenges Israeli companies have faced in India?
Time taken by the bureaucracy is a challenge. But once you have the right partner, you could do good business. The key is to identify the right location and have patience.
Has the recent blast in India hurting an Israeli diplomat’s wife affected the sentiments and the investment climate?
I don’t think so because such incidents can happen anywhere—in Toulouse, Argentina, London and so on.
…. Also, it can happen on people of any nationality or religion.
