Govt ownership in semiconductor companies may slow innovation, says Tejas Networks EVP

New Delhi [India], November 14 (ANI): In an exclusive interview with ANI, Parag Naik, CEO of Saankhya Labs and Executive Vice President at Tejas Networks, was not in favour of government taking an equity stake in semiconductor companies.

However, he noted the issue is complex and needs careful consideration of both its advantages and drawbacks. The US government recently picked up an approximately 10% stake in Intel as part of its strategic semiconductor push

Naik said that while government participation can provide stability and support, it also raises concerns about control and bureaucracy. "I don't know. It's the times that we're living in. It's good and bad, right? There are pros and cons of the government taking equity and pushing stuff," he told ANI.

He compared the approach to the Chinese model, where the state plays an active role in backing industries. "Frankly, that's the China model, right? More or less. The government backs and backs. But you know, there are pros and cons. It's not that it's one way or the other," he said. In India, government equity could lead to a company being treated like a public sector enterprise, which brings additional compliance challenges.

Naik said his personal view is that the government should focus on building clear rules that protect Indian interests without directly owning stakes. "They [Indian Government] should ensure that there are enough guardrails so that technology doesn't end up in foreign hands, it is used for sovereign purposes and it stays in India. The benefits should go to an Indian customer and Indian ecosystem," he said.

He explained that private investment could be crowded out if the government starts taking equity, as companies may then face rigid procedures in procurement and operations. "If the government does take equity, for the company that actually gets involved, which the government is an investor, does it have to follow GFR [General Finance Rules] for its procurement? Because most of the procurement that we do as startups is all discretionary, right? Then you get into all those compliance issues and all of that. So that might slow down the companies," he said.

Naik added that while scrutiny is necessary, excessive compliance can limit a startup's flexibility. (ANI).

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