Time For India To Play The ‘Country As A Platform’ Strategy

Post-pandemic, the International Monetary Fund predicted India to be the fastest-growing economy during 2022-23 and 2023-24. Predicted K-shaped or V-shaped recovery have been far from reality. 

HSBC India CEO Hitendra Dave recently remarked, ‘Once per capita GDP in India crosses the $3,000-3500 mark, as China did 25-30 years ago, it will be a J curve for everyone.’ But how? We want to articulate how India can play ‘Country as a Platform’ to enable an actual J curve growth.

The success of Digital India initiatives, Unified Payment Interface (UPI)'s growth story with 75 billion transactions in 2022, doubling from 38 billion transactions in 2021, e-Governance, and other state-level initiatives are remarkable. 

India’s UPI and IMPS are regarded to be far more developed than similar systems in use in developed nations. However, a country-level platform approach can boost India’s growth story. The Department of Public Enterprises (DPE) wrote to the Central Ministries and Departments to get their Central Public Sector Enterprises (CPSE) registered in Government e-Marketplace (GeM). 

The presence of all CSPEs on GeM as Sellers will increase competition and help the Government buyers get a competitive price.

But these are just the tips of the iceberg of tremendous possibilities, given India’s digital literacy and a new surge of entrepreneurial momentum. Remember, India ranks third today in the global startup ecosystem, just behind US and China.

How does the Platform work? In today’s digital age, Platforms have changed the economics of exchange. Platforms like Uber and Appstore like Apple create marketplaces and communities for exchanging goods and services between providers and users without the platforms owning the goods and services.

In the traditional brick-and-mortar model, value creation takes place in a linear shape, primarily by optimizing the resources within the system, while in a platform business model, the value is created in a triangular shape by orchestrating resources outside of the system. 

Like in Airbnb, the triangle is formed by the platform owners, real estate providers, and the customers who need access. Platform owners enable value creation through proper orchestration of external resources like setting up service delivery standards, data security, various governance aspects, and IP control like Android Apps' control. 

You are free to develop apps on the Android open-source Operating System, but you need to go through the review of Google’s App store to distribute the app to the android phone ecosystem.

Now let us draw inspiration from the country as a platform program running elsewhere. China is doing it very effectively. It is building its digital infrastructure to influence the development of technical standards and build control points to influence the global digital economy. 

They envision a digital silk road to export their digital technology along the Belt and Road Initiatives (BRI). China is enabling the ‘Country as a Platform ‘strategy through this Digital silk road. Alibaba’s Electronic World Trade Platform (eWTP), the creation of Multiple Digital Free Trade Zones (DFTZ), including launching the same outside of its political boundary like Alibaba launching a DFTZ in Malaysia in 2017 and further extended the same to quite a few other countries. Creating an alternative payment infrastructure is also a part of China’s ‘Country as a Platform’ strategy, with Ant’s Alipay and Tencent’s WeChat Pay. 

China-sponsored e-Hubs in several countries are now participating in eWTP networks with the participation of small businesses globally. China-based Alibaba, Ant Group, and others will dictate international digital trade. 

While the world is usually busy watching China’s growing geo-political influence, China is silently orchestrating a China-centric digital economic order that can potentially reshape the political orders in developing countries. In a physical format, we have already seen the dragon effect in our neighboring countries, like Sri Lanka, Pakistan, Nepal, and Maldives. The impact is far overreaching in digital format, which remains invisible.

Indonesia is another example of a robust Application Process Interface (API) connecting people from various islands with more than 1300 ethnic groups speaking in 718 mother tongues, forming the single largest homogenous market in Southeast Asia and fourth globally. Various studies project Indonesia's digital economy at US$124 Billion in 2025.

Much work is taking place on Country Platforms Action Plan to address the scale of investment needed to achieve net Zero in the next three decades and create an exchange for the flow of funds from the private/ public sectors across countries into the climate projects in specific countries. 

The Country Platforms concept is the first proposal adopted for action from the G20 Eminent Persons Group report or Global Finance Governance. The World Bank has championed the idea of Country-owned and Country -led platform models since 2017. 

The commitment is subsequently reflected in the joint MDB (Multilateral Development Banks) statement issued at COP26, and the G20 Finance Ministers endorsed the framework to establish Country Platforms. Country platforms must integrate with Paris-aligned NDCs to attract capital at scale from private finance focused on achieving net zero. 

Projects consistent with long-term net-zero country strategy certified as Paris aligned are likely to attract such capital and will be less exposed to project risks. Such country platforms can address upstream and downstream investment barriers, access capital at scale, issue green MDB bonds in developing markets, and create an opportunity for everyone to participate across borders.

While the global physical GDP is evenly distributed across the continents, when it comes to Digital Economy, the US and China dominate the landscape, with the negligible presence of the Rest of the world. 

India should immediately respond to it by building its own Country Platform. Its digital advances, young population, democracy dividend, thriving entrepreneurship, availability of funds, and the G20 presidentship make the perfect setting for a Country Platform. While the Government controls the platform, governance, and the IP (just like Apple or Android), various SME players across India, its neighboring countries, and also other developing countries can participate on the multisided platform (addressing both climate change funds as well as the exchange of goods, services, and knowledge) and create exponential growth for the economy sustainably.

This country platform model can also be a way of responding to China’s BRI. Such Country Platforms can also add resilience to the economy for a quick recovery from a shock.

The Country Platform model streamlines the supply chain. The consumption-driven Indian economy, with uneven growth across sectors and states, will get more broad-based across the geopolitical boundary, involving participatory nations to stage a quick recovery from any shocks like the one we saw during the pandemic.

It’s now time for India to play the Country Platform magic!

Authors: Dr. Asit K Barma, Director, Bharathidasan Institute of Management, Trichy, and Dr. Sangita Dutta Gupta, Associate Professor and Assistant Dean, Research, BML Munjal University