The Next $1 Trillion Energy Boom: Solar, Wind, & Green Hydrogen | Sumant Sinha | FO568 Raj Shamani

28:38I would say that 25 years ago, China saw this issue and they realized that they didn't want to be dependent on the countries that export oil. And so they started working on electrifying their economy as fast as possible. And within that, also developing the supply chain. And over time, they moved the majority of the world's clean tech supply chain into their own country, either in terms of critical minerals or refining of the critical minerals or manufacturing of the solar, Solar, let's say, polysilicon or wafers or cells that are required to make solar panels or batteries or now electric vehicles.

29:21So they've now got a lock on this whole thing. Now, for a country like India, that's not a great situation. Yeah. Right? Because at least in oil, you can import oil from 10 different countries. You can't import all your solar equipment from just one country. That too, you know, we all know the geopolitical issues. Yeah. Not so friendly. Yeah. So therefore, that's a real problem for India. So we have to develop a supply chain in the country. That's the second inflection point. And the third inflection point is that we talked about the fact that electricity is a small part of energy, right? Only 20%.

29:57What do you do about the balance 80 %? You have to address those areas as well. And we now have solutions becoming available that you can start addressing those areas. But you also need to address the user industries like electric cars, for example. How do you address those? So you need massive changes on the downstream side of industries that actually use energy. So a lot of changes have to happen there. So these three, four inflection points that we are now sort of at, we've got to as a country. So I would say phase one of our growth of renewable energy is done. We are now entering phase two, which requires a much broader growth in our entire energy system across multiple areas.

30:42And it also requires very different governance mindset on the part of our policymakers. So that's really where we are. So it's very interesting where we are at this point. And I, frankly, I haven't in my 15 years of, actually now if I add, Susan, 17, 18 years of journey or time in this sector, I have not seen us stand on the brink of so much change as I'm seeing that we're at right now. And it's an interesting, imagine like an emerging market and a country is not able to produce cheap electricity. What happens to them in the next 20 years? Very tough. I think we're going to see a shakeout happening in the world.

31:23Countries that continue to be energy dependent and countries that somehow find a way of becoming energy independent. And those that are energy dependent are always going to be at a slightly inferior position. So it's incredibly important for India as a country to get to that point of having full control over our energy supply chain. I think it's going to be one of the most important things that we as a country have to achieve over the next several years, because everything else depends on that. Your AI data centers, your ability to export energy in the form of green hydrogen or green ammonia, ability to also export compute capacity, your ability to export any product is based on cheap electricity.

32:09True. So many products are. So we have to get to that point. We can't always be dependent on the rest of the world. And for the longest time, it has been the Achilles heel of India's economy that we've had to import 150 to 200 billion dollars worth of fossil fuels every year. And every time oil prices go up, the rupee goes down, inflation goes up. I mean, it's just not a very good situation. Highly energy dependent. Yeah, yeah. It's not a good situation. So we have to find a way of escaping from that situation, which I think this government is doing their best on finding solutions. and that's why we made the progress that we already have.

32:45But are we close? Will we be able, forget actually, will we be able to do it or not? We will be, right? What's the biggest challenge that you see today? What is stopping us to reach a point where we are fully independent or probably slightly more independent the way China is today? You know, let's talk about China for a second, okay? And I can't claim that I know their story that well but I've seen them as an outside observer in this space. I think about 25 years ago, maybe perhaps even longer, they realized that they have this dependence and they wanted to get away from that, right? So what do they do?

33:25You know, on the oil side, for example, they build a massive strategic buffer, which, you know, they're drawing down right now, which is helping them, which is actually helping stabilize global oil prices also, which is very good. But I think beyond that, what they've also done is they've really as I said built this clean tech industry and really been able to indigenize it and you know over time what they see what happened is technology in the beginning was developed in the western world they tried to use or they decided to use China as a manufacturing location for the end product China said fine please welcome come in we'll give you some subsidy we'll give you you know to set up your business whatever whatever right so all these western countries, you know, in their naivety a little bit, I would say, you know, thought, oh, wow, this is great.

34:16So they all went and made big investments there. I think what happened is that there was a technology transfer that happened willingly or unwillingly. And then over time, I think what China was able to do was not just set up the downstream side of the business, but they also started looking at manufacturing the capital equipment, which is used to make that downstream equipment. So for example, you know, take the case of a solar panel or a solar cell. Now, to make the solar cell, so you can either buy the solar cell from China, right? But you have to get equipment that is used to make the solar cell.

34:54Now, who makes that equipment? China. Now China. But in the beginning, it was the developed countries. So over time, China took that industry also and indigenized that. Then the question was, who upgrades this equipment, this capital equipment? And who figures out what is the next generation of it? That was happening. All that research was being done in the Western world. That also has now moved to China. So you see, there are three, four different layers of it. First thing is you start manufacturing the end product. Then you start making the equipment to make the end product. Then you start doing the research to make the equipment to make the end product.

35:28Okay. There's a lot of work that you have to do. And then you economically colonize countries which actually give you raw materials. Exactly. That's the next step. And exactly. And then you realize that, you know, if I need, if I'm making batteries, for example, and I need lithium to make the batteries, where is the lithium found? Where is the cobalt found? If it's found in the Congo, then let me go and start investing in the Congo, right? Make them part of my bricks, of my Belt and Road Initiative, right? Give them money to start extracting. And then don't build a refining plant there. Build a refining plant at home so that all that comes here.

36:06And then slowly, slowly, because of all the subsidies that I gave and because of manufacturing capability that I have, I'll start making sure that all of my industries are so low cost that whatever little capacity that existed in the rest of the world goes out of business. Okay, so anything that existed in the Western world in terms of refining capacities or elsewhere is gone. So even now, if I as a country, let's say as India decides to go into some of these places to get that mineral capacity, we don't have the refining capacity. So we have to get the minerals, build the refining capacity, and then build the research R &D base, then build the capital equipment manufacturing setup, and then start building the downstream equipment.

36:55We are starting right now only from the downstream side. And to again give you an example, today in solar, to make a solar panel, there's a four-part value chain. You start from polysilicon, may take quartz, which is fortunately found abundantly in India, convert that into polysilicon, which is like a material from that polysilicon, which is like a hard material. From that, you then make wafers, which is just the blank slate kind of a small thing that you see inside a panel. Then from that wafer, you make the cell, which has a lot of these striations to capture the sunlight better, a lot of ridges and so on.

37:36lot of chemical layering on that surface. And then you put in place the wiring that sort of takes the energy out. And that is still a small, small sort of square. And then you go into the last part, which is making the module, where you essentially take a number of these cells, arrange them on a panel, and then put a glass cover on it, put an aluminum frame around it, put some wires, and that becomes a solar panel. Okay, that's how the whole thing is made. In India today, we started with making panels in India. We opened up the whole sector. I mean, not opened up, anybody could make it. But we stopped imports of the equipment from China.

38:16So that allowed domestic manufacturing to get into modules. And we're doing the same thing for sales. So we're working backwards from the absolute end of the supply chain, right? Of the end product. And we're working backwards, right? But it's not just a question of then making wafers and ingots and then making polysilicon. but also the equipment to make all of these things, then the R &D to support all of that, and then the raw material that perhaps goes into all of this. So there's an enormous amount of work that we have to do. The whole ecosystem. Yeah. And you know, this is just one product in the clean tech supply chain, admittedly perhaps the most important one, but only one product.

38:53We need to replicate this across industries, batteries, automobiles, you know, so many other areas. So it's an enormous, enormous task that we face as a country. And we need to get cracking on it, frankly. But tell me, what did China figure out 20, 25 years ago to make this kind of infrastructure, this kind of ecosystem and countries like India, America or in countries in Europe, we all fail to understand this. You know, I don't want to be too critical of anybody here. I would say that the Chinese were just very prescient, very foresighted about the whole thing. And full marks with them for that.

39:36But there has to be something they must have figured out which we failed to understand. You know, I think, look, 20, 25 years ago, we weren't even thinking about clean energy. It wasn't anywhere in our mindset. We weren't even thinking of these materials and minerals and, you know, solar and wind. And it was nowhere. I mean, as I told you, in 2008, when I got into Suzlan, at that time, you know, Suzlan was so far ahead of its time in making wind turbines. Solar modules or solar was just starting at that time. But these guys figured it out 10 years ahead of all of that and, you know, came up with this whole game plan and then they implemented it.

40:14Why did other countries not do it? I think it's, you know, it's a good question. I mean, I don't have a clear answer to it. But I think that as Indians, we tend to be very inward looking. You know, we're such a giant country. We are so argumentative. We are so focused on what's happening within our borders that I think perhaps we often don't see what's happening in the world outside of us and how to best deal with the world outside of us. and how to take some of these kinds of decisions in a manner which is foresighted beyond what other countries are thinking. I think we're doing some of that now under the current government.

40:56And I give them full credit for that to try to address some of these areas now. But yeah, we should have done it 15 years earlier than that. But, you know, time gone is time gone. Other countries, I think, look, you know, taking a step back today, there are two kinds of countries in this world. There's one set of countries that have fossil fuels, one set of countries that don't have. If you divide those two types of countries by population, there's only 11 % of the world's population sitting in countries that have more fossil fuels than others. And there's 89 % of the world's population sitting in the bucket that don't have access to fossil fuels, that have to import it.

41:33It includes China and India. It includes Europe. It includes the Far East. It includes a lot of Africa, right? So many countries around the world don't have fossil fuels. Now, the countries that do have fossil fuels are happy to export it and continue to persist with an economic system that is based on fossil fuels because it's in their interest to have a market for their product. But now I think these other countries are realizing that this dependence is now very dangerous because of all the uncertainties in the world as a whole. where energy supply chains are getting weaponized. And so therefore, these other countries are realizing that they've got to do something about it.

42:17India, fortunately, has made progress. And we have the tools at our disposal in the context of a large-sized economy, an energy market that is already pretty large and growing substantially. We have, therefore, the economies of scale. We have, I would say, relatively enlightened leadership, which understands some of these issues. We've already made a lot of good progress over the last 12 years in some of these areas. And so we have a lot of elements within the country right now, which gives us a good platform to be at least a second country that starts making the transition from being an energy fossil fuel importer to becoming an electrostate.

43:00Okay, that's the journey that we have to do very, very fast now. because there is you know when China did it there wasn't really a gun to the head yeah now there is a gun to every country's head so we just have to move very fast but as I said we have some of the ingredients that allow us to make that transition quickly so I have two questions on this okay probably India was always focusing on our problem we were inward looking country we're still inward looking we're focusing on our problem there what was the problem of like let's say Europe and America why were they unable to see this because they're developed they're rich they understood this game much better they've been economic superpowers of the world so they also understand that creating an ecosystem gives you some kind of edge why did they do it i think there is a difference in the approach of both europe and the u.s uh the u.s really has a lot of fossil fuels and today it's the largest fossil fuel exporting country in the world which is you know an eye opener for most people who think that maybe it's Saudi Arabia or Iran or you know Russia or something like that but the US has really invested in developing its oil and gas and today US exports more than Saudi Arabia?

44:14Yes and that is why and under the current administration the US has taken a very strong turn or a very definite turn towards doubling down on fossil fuels where they're saying that all this renewable energy is hogwash I don't really care for it I don't even care about climate change which is why they've pulled out of the COP agreements and they are saying you know what fossil fuel is the story of the future and that is why we want to invest in developing more and more fossil fuels and we want to export more and more of it And so a lot of this disruption that is happening globally and oil prices are going up and down is actually creating export markets for them.

45:01So they are actually able to export their gas production to Europe and other parts of the world in a very big way. So I would say the U.S. is actually quite comfortable with fossil fuels. It is quite economically a little benefit from fossil fuel prices going up. Consumers within the U.S. may not because, you know, the price that they pay at the pump is linked to global prices. So consumers individually may be impacted, but companies within the U.S. will benefit substantially. And as a country, you know, on a net basis, the country, the U.S. will end up gaining. So they are very happy and they've really doubled down on becoming a fossil fuel country.

45:45Yeah. But also that changes from administration to administration. Under the Biden administration, it is all about renewable energy and they came up with this massive incentive plan for renewables. So it's a little confused. They sort of go from one extreme to the other, depending on whether there's a democratic administration or a republican administration. So it's hard to say what is the U.S.'s consistent view. Okay, today it's fossil fuels. That's the path that they've gone down. Europe, on the other hand, I think was a little bit naive in the way they approached the whole situation. First of all, as I said, they exported a lot of their manufacturing base to China.

46:32And now China is really eating their lunch as far as manufacturing is concerned. So that's really not good for Europe. Number two, they let themselves be dependent on cheap Russian gas for the longest time. and then when the Russia-Ukraine war happened and Russia showed up on Europe's doorstep from a security standpoint, suddenly Europe woke up to that danger and said, oh, this is really not good for us and they tried to cut off Russian gas. But then the question was, where else would they get their gas supplies from? So then they turned to the US, which was obviously their NATO ally, but under the current administration, their relationship is going up and down.

47:13And so suddenly Europe is very exposed right now on energy supplies. They really don't know what to do. Meanwhile, their energy prices are very high. And therefore, their manufacturing industries are becoming uncomparative. But one credit to Europe is that they are sticking to their views on the whole issue of climate change. And that's why they are saying that, you know what, anything that now enters Europe, We want to assess how much carbon there is in that product, and we want to price that. And if you have too much carbon in it, you'll have to pay what is called this carbon border adjustment mechanism tax.

47:52So their whole economy is going to be a little bit isolated from the rest of the world, and it's going to be a higher cost economy. And what that is leading to in the long run is a widening or a diverging economic gap between them and the US. So if you look at per capita incomes in Europe and the US, which 20 years ago was more or less the same, the US is now 30%, 40 % higher on a per capita income basis than Europe is. So I don't know how Europe is going to find their solutions, but they have to, you know, think through this very, very carefully. Is it going to be worse for Europe as an economy?

48:32I think so. I think so. I think so. And I don't think that they found a good solution to this whole problem. And especially in an era of leaders like Trump and Xi Jinping, who are very economically driven. Yeah. Look, I won't say that European leaders are not economically driven, but the problem is that Europe is very fragmented as a block, right? Every country has their own leader. It's 28 countries or however many countries they have in the European Union. Decision making within the European Union is very difficult as a block. Yeah. So they have some of these issues and problems that they have to sort through.

49:13But again, I'm not an expert on Europe. I just see what I see from the outside. But I can see that energy is going to be tough going for them. And unlike India, which maybe can aspire to become a manufacturing power in cleantech, they can't because the costs of manufacturing are a lot higher. So that's labor costs are higher, energy costs are higher. So it's going to be tough for them. U.S.? it's surprising not many people know this that the world is US is the largest exporter of fossil fuel in fact recently I was reading that post the Iran conflict the most amount of LPG that we get is from US earlier we used to get from Qatar and the West Asia yeah but now we get from US and post Iran war we have been dependent on US for our gas needs yeah so I'm not surprised because we can't you know a lot of the gas that we used to get from there is not coming out any longer so where's the choice there are some industries that are entirely based on gas whether it's LPG or whether it's now the fertilizer industries so you need the you know you need gas to operate those areas do you believe in this that some countries are incentivized to do wars because then they make other countries dependent on them like post Russia Europe got dependent on US post-Iran a lot of Asian countries got dependent on US including India for energy needs.

50:40Yeah I look I think maybe that is true in the short run because then you know if there is only if a lot of the world supply which is coming from the Middle East gets curtailed because of the crisis that is happening in the state of Hormuz and then the US emerges as the alternative supplier Of course, that's where people are going to go to get their supplies from. But long term people are also thinking that, you know, this disruption is not good for me. I'm paying a higher cost. It's showing to me that supply chains are inherently fragile. And therefore, the longer my supply chain and the more dependent I am on it, the more I'm exposed.

51:21And the best supply chain I can get is one that is within my borders, which I can control. And so that's what everybody then starts working on. And in the long run, you know, this dependence, people are going to work towards ending it. Yeah. But how will they work towards ending it? By going, you know, by electrifying their economies and then trying to have a domestic electric supply chain. By moving the user industries as much as possible towards electrification. So a lot of that is going to happen. So, you know, when I started in this industry, it was all about climate change. That is what drove the industry to get started.

52:01Somewhere in the middle, it became affordability because it became cheaper. So that is what drove renewable energy. Today, it's energy security. And, you know, while climate change was a little bit ephemeral, you know, high level, big picture, something futuristic, hard to understand. There's 1.5 degrees. What impact would it cause me? Is it really caused by temperature change or is it caused by some other factors? Who knows? Right. But scientifically, I understand it. But energy security is something people understand from the gut because it hits their wallet immediately. It hits their dependence on other countries immediately.

52:38It weakens your geopolitical position immediately. So this is now becoming the biggest driver of a country trying to, and especially India, saying, you know what? Why the hell should I be dependent on other countries? I'm going to be masters of my own fate and my own destiny and therefore let me make sure that I address this problem on a war footing so that's what's going to happen and that is what is going to drive our sector forward now but how far are we from becoming truly independent or let's say largely independent I would say 10 years really? just in 10 years you think we can be majority of energy will come from in-house like from just within the country See, energy will start coming from in-house even faster than that.

53:24Because all of our generation is now have, electricity first of all is within, you know, it's already now everything is coming from in-house, right? Electricity is now fully domesticated. Within the country. The supply chain for electricity is going to be fully domesticated in the next five to seven, seven years, let's say. Including batteries and all the other stuff. Electricity. Electricity. energy we will I think get rid of most of our gas imports through things like green ammonia and green hydrogen and by electrifying sectors most likely in 10 years and what else is there other than that it's just a question of then taking the supply chain further back into minerals and so on that may take a little longer but I would say in 10 years a bulk of that will get done so let me ask you a wider question in comparison for between countries so in next 20 years who who will be the leader like will it be china because they control the supply chain of the entire ecosystem will it be america because they are highly focused on fossil fuel and then actually capturing sort of the countries nearby who would generate fossil fuels or will it be India where there's growing demand, growing appetite and fast innovation?

54:49So I think that, and by the way, this is an excellent question and this goes to the heart of what's happening in our sector right now. My feeling is, China, see China is sitting with an enormous lead right now in the whole electricity area, including the entire supply chain, including going all the way back to minerals, right? And they've got a lock on certain things like rare earths, which I used to make permanent magnets which go into a lot of other things motors whether they're based on fossil fuels or not so they've really expanded their footprint that lead is going to be impossible to remove so they'll definitely be sitting right at the top of the whole energy value chain and their size and scale is so much larger than anybody else's that whatever they do is going to drive the rest of the world to a large extent so it looks like China has won the race China certainly is at a point where they are far away ahead.

55:45So I would say that, so let's put them here, right? Now, what's happening is, as I talked about earlier, there are going to be two broad buckets of countries, right? There's this fossil fuel countries and there are electric countries. In the electric countries, China is far away ahead and is going to definitely be sitting at the top. On the fossil fuel side, you have the US, which is definitely far away ahead of other people. But it's not like countries like Saudi Arabia and the other oil-rich countries are not also close behind. They also are close behind. But I think the U.S. is certainly sitting on top and moving rapidly in that direction.

56:26The question is what is going to be the interplay between these two buckets? I think over the next five to ten years, a lot of countries are going to try to remove their dependence on the fossil fuel side. and I'm going to try to migrate towards the electricity side. So I think in that sense, China, which is sitting on top of the mountain on this side, is going to have an advantage as more and more countries try to get into that space. Electrification of the nation, yeah. So I think longer term, therefore, I think the focus is going to be a little bit more on growing the electricity side. And in that sense, China is going to eventually end up winning out.

57:02The big thing that they have going for them is technology. because on the one hand, you're digging things out of the ground in fossil fuels. On the other hand, you have a lot of technology moving in your direction. And long term, I trust in the ingenuity of the human mind. And humanity is going to find cheaper ways of doing things. It's going to be smarter in the ways of doing things. And that is going to drive this whole technology bandwagon towards the electricity side. So I think between the two, it's going to be that of the electricity side. okay it may take 10 years to play out 15 years to play out but I think therefore eventually China is going to end up being in better shape so all these wars these geopolitical things that are happening where in some ways the fossil fuel world is trying to control fossil fuel supplies I think is going to at some level boomerang on them because other countries are going to say you know what if there's so much volatility in this area then do I really want to be dependent on this.

58:00Screw you, I'm going to fix myself in a different way. Exactly, right? That's what's going to happen. Now, where does India stand in all of this? I think India is going to go down the China path. We're going to go rapidly in that direction. A lot depends on how rapidly we indigenize the supply chain. At this point, all the actions of the government seem to indicate that that is an important, important priority for the government. And I'm glad that it is. So I feel that we're going to develop a domestic supply chain on the manufacturing side relatively soon. And that's why I said within 10 years, we will have a lot of that set up in India.

58:39I think, you know, this government is moving very, very fast in that direction. And, you know, I talk to everybody in the government, you know, from chief ministers to people in the central government, across ministries, bureaucrats, ministers. And I hear a very consistent messaging from all of them. And that messaging is very clear that we want to be self-reliant, that Atmanir Bharta is not just a buzzword, it is something that has to be delivered, especially in our sector. And that Viksit Bharat comes along with energy, Atmanir Bharta as well. And that means a full supply chain. And if you look at the Prime Minister's latest 15th August speech where he talked about the Saptadar.

59:20One of those was developing the green economy and making sure that we are energy self-reliant. So that's the direction clearly of travel. And that's, I must say, I'm very, I'm glad that that is the case. But isn't it for us, wouldn't be a double-edged sword? Like today we are dependent on the fossil fuel, which is the America side. We are focused on making ourselves more electricity dependent. and then electricity we're focused more on renewable energy. Okay. But that gets us closer and more dependent on China because the supply chain they own as of now. So as more and more we get more electrified, we'll be more dependent on China.

1:00:03No, but this is where we have to play a very delicate balancing act. Today we're already dependent on the fossil fuel countries. Yeah. Right. But as I said, at least there are many of them and many of them are our close allies. Here, there's a dependence on one country. So while we move in that direction, at the same time, we have to develop the supply chain. The two have to go hand in hand. You cannot just do one or the other. They have to go together. Otherwise, it's not going to be great. We have to build our own capacity and capabilities. 100%, 100%. Of the entire supply chain that we spoke about.

1:00:38Absolutely. From research, from rare earth. 100%. Yes. We have to. There's no other choice. is it happening? as I said is it happening in the equipment and research as well that's the question not to the extent that it needs to happen but And I'm 100 % convinced that it will happen. I think the government deeply understands that as well. And look, this is not a government effort. This is not a company by itself going and doing something. This is a collaborative national effort that government and the corporate sector, and in fact, even ordinary consumers, all of us have to work on it together.

1:01:23because, you know, the consumer has to buy the electric vehicle. Yeah. And they have to say, I'm going to put up my own solar rooftop and I'm going to have my own batteries and I'm going to go in that direction because apart from energy self-sufficiency and everything else, there's also pollution in Northern India, which as we know is an endemic problem. So consumers have to make intelligent choices that take us in that direction. Corporates have to do the hard work of creating supply chains, going out there, investing a part of their profits on R &D, which Indian corporates notoriously are not good at doing.

1:01:58Okay, because of the reason why we are very here and now people. Do you invest in R &D? We try to and I've just told my people, we got to do much more of it. Okay, but I don't know that capital markets reward R &D investing. Because this is certainly it's not a future. That's the problem, right? That's the problem. the whole problem of every corporate and conglomerate including you now we don't have a culture and we need to have a much better culture of R &D investments of getting into capital equipment manufacturing we need young entrepreneurs to get into ancillary industries, service industries around the whole clean tech why don't you do it?

1:02:43you understand the need for it we are doing as much as we can We are investing almost, Renew is investing almost two to three billion dollars of capital every single year. In research? Not in research. No, no. I'm talking about across. Not infrastructure investment. I'm talking about research. No, no. So as I said, now, look, 15 years, you know, we first went through as Renew as a phase of in the first three, four years of survival to prove that we could do what we could do. Then we had to go through a competitive phase where we had to demonstrate that we could execute better than others. and we became number one in 2017 till about 2023-24 we were number one now we're number two it's a very competitive market out there boss we gotta fight every second and every step of the way it doesn't leave a lot of time for thinking really about 10-15 years later it's only now that I'm beginning to realize that you know standing where we are as a country and based on all the conversation that we just had right now I can tell you honestly not a lot of people are thinking about these issues in the country.

1:03:48Okay, not a lot of people are thinking about what should be our industrial policy, our green industrial policy, 15, 20 years out. Some folks in government are, and that's great. And I can see now a lot of steps coming into place, but not that many people are thinking about these issues. So we need more people to be doing that. And in that sense, it's great that we're doing this podcast. Hopefully it reaches more people and more people start thinking about some of these things. So therefore, we haven't been good at thinking about the future as a country, as a corporate sector. And if you don't think about the future, you're not going to invest in R &D because you're focused on the here and now.

1:04:22So we have to start doing that and start investing in R &D at the same time now. Here's a question which I'm thinking about, right? At one side, I understand your dilemma as an entrepreneur, as someone who's leading the company, that you got to do what you got to do, where you get maximum reward from the capital market right and that's why you would do things which will get you better valuation better share which will create more shareholder value and that's why you don't invest enough in R &D but as an entrepreneur you understand that 10 years 20 years from now you will not be as rewarded as you are today if you won't invest in R &D so what stops you from investing in R &D?

1:05:09Because you know, like fundamentally you spoke about it and you want to invest, but you don't. I'll tell you, see, there is a mindset issue here, which is that I have to survive today. Is that your mindset or the shareholders mindset or a board's mindset? No, I would say it's a general cultural mindset. India. There's a little India, but there's a lot of Indian capital markets. where, you know, capital markets, not just in India, but globally recognize this, you know, have this three month quarter and quarter gun of a situation. Maybe our capital markets are less matured about R &D investments than maybe capital markets in other parts of the world are, or maybe corporates are different.

1:05:51You know, I don't know. I haven't done too deep an analysis on the mindset issue here. But there's a structural problem also. The structural problem is that if you look at our research institutions, we don't actually have very deep research that is going on. Our academicians are not as very well connected into the corporate sector. So they are researching their own things, things that are of interest to them, which could be very academic in nature. There's not good cross collaboration between corporates and the academic institutions in India. And again, I'm not finding fault here. I'm just saying that's a structural lacuna that we have, which we all have to try to come together and address.

1:06:37You know, some years ago, I had gone to visit a state university in New York because there was a battery manufacturing R &D setup there. And this is one of, this is in the state of New York, and there were probably maybe 10, 15 state universities of New York. This was one of them. And that university, because of one professor who was there, who was an expert in battery technology research, had been granted by the US government something like$400 million. To do research on batteries. You know, I think that if I add up all of corporate India's R &D, it probably does not add up to$400 million. dollars.

1:07:24Okay, so as a country, we've just not invested in R &D and that is a mindset that we need to change. And I, for my part, have realized that and I am now thinking, see earlier we were appliers of technology, where we were just project execution people, equipment, land, grid, power. Now we've gone into manufacturing, where we are also making solar modules and solar cells. And we're thinking about what are the other manufacturing areas that we should get into. As we are doing that, I'm realizing that we need to start investing more and more on the R &D side as well. So we started some research on perovskites with one of the IITs.

1:08:02You know, we're trying to get more closely linked to IIT research areas. We have set up a center of renewable energy excellence at IIT Delhi about five, six years ago. And we're trying to do our bit at trying to cut the gap between academic research and what we require. It's hard going, but we're trying to sort of move in that direction. And, you know, hopefully over time, as more and more companies start doing that, this will change. But we're still very early. Who are the top five players or top six, seven players in the renewable energy space in India? I would say there's certainly us, Renew.

1:08:38We are the second largest in terms of, we're the largest wind IPP in the country. We're the third largest solar IPP in the country and second largest IPP in general. we are the top four or five solar manufacturing companies in the country. So we are definitely among the top. Yeah, so you are one of them. We are one of them. I would say Adani is number one as an IPP right now. NTPC is making a lot of investments on the IPP side. They are pretty far advanced. So I would say we are the top three. At some point, I would presume Reliance will enter. And I'm sure they'll do it in a big way because that's what they've said that they would do.

1:09:19And then there are several other companies in the space, the Tatars, there's another company called Greenco, and, you know, various other companies that are now trying to become bigger. So it's a pretty fragmented market in our sector. But I'd be like no large conglomerates, let's say in the energy, if you look at, let's say RPSG is one, INOX. So are these guys in the new world? They are, they are. but they're much smaller right now. In the renewables. In renewables, yes. Yes. And all of the country and all the conglomerates are now entering the renewable space? Yes. So whether it's Reliance, which I said is going to enter, Adani has already been there for many years, Tata's, Birlas, you know, the RPSG group, Jindal's, Vedanta, Mahindra's.

1:10:11Sabi are. These are the only names that we know. Yeah. large families Torrent's also entering yeah yeah no no they've already been in our sector for many years you know these are the names that come to mind offhand but you know there are many many many players and do you think that we've after all these players come in and the way the movement is happening in the renewable energy space will we completely move to renewable energy or will we still need oil, gas and nuclear and all of that It will be because, as I said, there are many applications that are based on burning fossil fuels. So coal, gas, nuclear, it will be?

1:10:51Coal counts for almost 65 % of all electricity. To get that to zero is going to take 50 years. Okay, because look, if I set up a coal thermal plant right now, that's going to run for 30-40 years. Why should I phase it out? Unless it has got to be decommissioned because it's reached its end of life. So there's no sense in decommissioning it. So it'll run for some time. Plus the grid needs also a certain kind of power with a certain kind of characteristics. So unless you're able to replace that, coal will continue. Then transportation, as I said earlier, is going to take an enormous amount of time to replace all the petrol cars or diesel cars.

1:11:34All the commercial vehicles. All the commercial transportation. Then planes, you know, making sustainable aviation fuel, all the shipping industry. All of that is going to take a lot of time because, see, a ship has to change its engine, you know, in terms of which fuel it can use. That's going to mean that you have to now start ordering ships that can run on green methanol or green ammonia instead of running only on diesel or bunker fuel, whatever ships run on right now. Now, those ships will take four or five years to get delivered. And then maybe in one year, you will change 1 % of the ships that you have.

1:12:10What about the other 99 %? A ship is going to carry on running because if somebody has already paid for it, they're not going to stop running it until you actually have to scrap it. And so a ship could run for 30, 40 years. So for the next 30, 40 years, therefore you'll need that fossil fuel for running that ship. So some of these things are, you know, there are certain things that we're locking ourselves into. So for example, steel. We're going to double our steel capacity in the next maybe five to 10 years. we can go either electric arc furnace or we can go blast furnace blast furnace runs on coal if we set up a steel plant today with blast furnaces then those are going to run for the next 30 40 years so those important decisions the faster we can start changing those the better but who's going to change those no company's going to do it you know unless there's some pressure on them or there's some reward or there's some reward so the government has to make those policies.

1:13:09So, you know, a lot of it depends on policymaking as well. So, let's say if you were... Or it becomes cheaper for them and therefore the reward is better for them. So, let's say if you were to advise the Prime Minister of India to make India the global leader in energy in next 25 years, what would be three things that you would ask him to do? Purely on your experience. And I'll tell you why it's a difficult question. Because, see, it's easy to say I want to do this. Of course. But to get it done through all the arms of the government and listen to all the corporate sector, 20 different voices and 20 different opinions that you get, it's not that easy.

1:13:55Okay. See, what happens if I'm a bureaucrat and I'm sitting, I'm not a technically well-versed guy in that sector. And I want to make a policy on something. Let's say energy related. then there'll be 30 guys, all these large conglomerates and all these old companies that have been operating in the sector, all the smart guys like me, we'll be going and talking to them and saying different things. Now, 15 of them will be doing it basis what is good for them. Maybe five guys will be saying it based on what is good for the country. But how do they make out? Now, this is where their experience comes in, obviously, right?

1:14:33but it's not that easy to sometimes you know sift through all of this so that's why policy making is never a straight line in the right direction it's always two steps forward sometimes one step back two steps sideways so it's easy to say that you should do I agree but it doesn't do it so if I were to coming back to your question if I had to like just three like bets in electricity to make India globally a leader in electricity so I would say number one focus on developing the supply chain as rapidly as possible, including all the manufacturing of solar, batteries, etc., including all the component industries.

1:15:11The entire global supply chain. Protect it from Chinese imports through whichever mechanism, whether it's PLI or ALMM, etc., but give that protection and then allow domestic industry to flourish. And between the production-linked incentive and through other mechanisms of import protection, I would favor the import protection because that allows everybody to have a level playing field in India. In a PLI scheme, some people win, some people lose. And the guys who win then have an advantage compared to the guys who don't win. Right. And therefore, it ends up being a much smaller set of people who end up in that.

1:15:47And then only it becomes an oligopoly. In some ways, yes, it does. Right. So it disincentivizes other people from getting in. And sometimes the protection you get from the PLI is not sufficient to account for the cost of imports versus the cost of domestic manufacturing. And if it's not enough, then nobody makes an investment. And because when the bidding happens, then you end up winning too aggressively because you feel it's better for me to get it. At least I'll be better off than everybody else. So let me win it. okay and sometimes that therefore you know the PLI scheme that you end up getting the benefit is too small and then our our our friends from the government end up I think the condition so much that it becomes very impossible to meet them so anyway there are various issues and then people back off and then nothing happens so I think the PLI scheme needs a fundamental re-overhaul and I would go for other import protection mechanisms that is one thing I would do which is get the right sets of policies in place, protect domestic industry and let the supply chain develop.

1:16:57Okay, this is number one. Number two, I'd really focus on the user industry side and really try to move the user industry as rapidly to either green fuels or towards electric solutions as rapidly as possible. I'd really incentivize that. I'd give more subsidies to for people to shift to electric cars. I'd focus on public transportation to see how we could electrify that as rapidly as possible. So, for example, the government has electrified a lot of the Indian railways, metro rails and all of that. So that is all good stuff that is happening. But do it at a much faster pace, incentivize people faster because the money that the government puts into that will get paid off in terms of less import dependence in the future and a whole bunch of other benefits.

1:17:44So that's the second thing I would do. The third thing I would do is I really, really put a lot of effort behind building the grid much, much, much faster. Okay, and grid management with much faster deployment of batteries and just building the lines much more, crisscrossing all across the country, I would really focus on that because that is the bedrock of faster electrification. And if you don't have that, you can't electrify fast enough. Interesting. See, the whole conversation from start to end, there's an underlying theme, which is transition. that we need to transition fast in the three bets also which you said it's largely dependent on it right and I understand also you would be incentivized to do it but why do we need transition of electricity in a very simple way as a five-year-old tell me as a common citizen why do I care why do I want to shift from any sort of energy to any sort of energy You know, I'd give you two, three reasons.

1:18:46One definitely is pollution. Clean solutions are usually less polluting. If I don't have a coal plant in my vicinity, emitting carbon emissions and other pollutants, that's going to be much better for me and my neighboring area. Right. so that's one reason if I in places like Delhi for example a lot of the pollution in the winter months is because is vehicular in nature so if I can cut vehicles into and convert them into electric much better for me right so that would be one I think strong reason that people would have the second is affordability you know the there is the Pradhan Mantri Muft Surighar Bijali Yojana right which is that the government is giving subsidies i can bring my costs down so there's affordability by putting up my own rooftop solutions so why should i not do it same thing with electric cars as well longer term it's economically better for me to buy an electric vehicle maybe there's some short-term cost of finding charging stations and connecting to the grid and all of that so it's more convenient to buy an electric car because the pumps everywhere Right.

1:19:59But longer term economically, it's better for me to do that as well. So that's sort of the second reason why people should move towards electric solutions. So affordability, pollution, affordability. The third thing is, look, we all as Indian citizens have to worry about the life of our children and our grandchildren. And I know it's a little bit further out. I know it's not immediate, but we talked about climate change. that's something that every single individual citizen of India, actually of the world, should be worrying about. And if that informs some of the choices that we make towards more clean energy solutions, I think it's something that we should all be more alive to and more educated about.

1:20:46So I would say that's the third reason that we should think about it. And again, the question is, as a consumer or as a citizen of India, again, if my country is going to be impacted by the choices that I make, right, in terms of the country's dependence on X or Y or Z, and that's not healthy, you know, then also I should be making decisions. And sometimes, look, sometimes, Raj, what happens is, you know, there are national missions behind which everybody has to align behind. Agreed. I think this is one of those things that we all have to align behind. True. Because, you know, otherwise we are putting ourselves as a country, you know, much on a much weaker footing.

1:21:27then we need to have as a country of our stature and our future and the population demands and expects and requires. True. And I agree with the point of national mission that we should really be thinking about how do we help as an individual citizen to make a country more independent. because for us it's a double-edged sword we are right now dependent on so many other countries so every war or every little instability in the world makes me poorer yeah makes each and every one of us poorer just by rising oil prices or rising fossil fuel prices right yeah and if we change that and get to electrification on another country then we're dependent on china which is not a friendly country for us so we are going to be highly dependent as a nation and at a mercy of another nation where both the nations don't want us to grow as fast as we want to grow and as our ambitions are so we should be very focused on making choices in daily life how do we choose better in order to help our country be more independent and electrified in that manner no you are 100 % right that there's I am totally in agreement with you you know and there was another let's say let's talk about for the entrepreneurs who are watching right I was listening to Chamath you know Chamath yeah yeah right he was saying something about an energy transition and he said loosely that the next trillionaire would probably come from like will be someone from the energy transition space, whoever figures it out, will probably the next trillionaire.

1:23:17Do you agree the transition of the electricity in the world is so big? It's a massive opportunity for sure. There's no question about it. If somebody develops a brand new energy source, which is cheap, which can be deployed at scale, and where the technology is patentable, that person will certainly become a trillionaire. You know, the single biggest sector in the world in terms of total investments right now is energy. And within energy, it's now clean energy, which is in taking more investments in than the fossil fuel industries. So clearly this is the direction of the future. And so, as I said, if somebody figures it out, for sure they'll become a trillionaire like this.

1:24:06So let's make it more ground level. So this is a large philosophical view, a point of view for everyone in the energy space or in the capital markets. Someone watching this is an entrepreneur in 20s or early 30s, whatever. Wants to start a business in India in the energy space. What is an exact problem or an exact business which you think can help them make large amounts of money? Listen, if I knew the answer to that question, I would be doing it myself. You're doing it already. But I'm doing some parts of it. I think for a new, for a young entrepreneur, see a lot depends upon whether you have capital or you don't have capital.

1:24:50Okay, when I started off, I didn't have any capital of my own. And that makes a big difference because then you're dependent on getting capital from other people. It influences what kinds of things you can envisage doing. So tell me an opportunity with capital and without capital. So if you had capital, I would think that something on the manufacturing ecosystem What specifically? So I can't say you'll have to really it depends as I said on government policy to a large extent But let's say I'll give you an example I was speaking to someone in the energy sector and they said for making some parts of solar energy you need junction box That box India there's no one who's manufacturing at scale at a cheaper price as compared to China So we're highly dependent on China.

1:25:37So if a small entrepreneur can get small amounts of money and start making junction box, that's a big opportunity. Provided imports from China are stopped. Yeah. Because if you allow imports from China, that guy's never, the Indian entrepreneur is never going to be competitive. Because China is much more. Which depends therefore on government policy. So that is why I say it depends on government policy. Okay. So areas where the government decides that this is an area where we want to have a domestic supply chain, those are areas which might be interesting. Now, whether it's, you know, inverters or junction boxes or some other little component that goes into some solar panel or some battery cell, whatever it might be.

1:26:17There could be many such opportunities. But it all depends. Because right now, as we discussed at length earlier, today everything is cheaper if you buy it from China. Because they have skill and they have manufacturing efficiencies. so you're telling me there's no opportunity for an indian entrepreneur where they can compete with china if the government doesn't do anything i won't say that i won't say that but i would say that you know i am not deep enough on the manufacturing side where i can give you an answer to that question honestly speaking okay okay there may be some small area where somebody can go in and set up something and be competitive, possible.

1:26:57Right? I operate at a certain level of scale and size where, you know, the Chinese also operate. And in those sectors and those areas, it's very hard to compete with them otherwise. And not just for Indian companies, but globally, anybody in the world. And that's also because they get so much subsidy from their government and government central and state and so on that it's very hard. plus our cost of capital is higher plus our infrastructure costs are higher our efficiencies in general are a little bit lower so there are lots of issues that you have to deal with but i'm not going to say that there aren't any sectors where you can't be comparative with the chinese i'm sure there are i just don't know what they might be you know given my level of knowledge at this point on the manufacturing side i would say for entrepreneurs really something on the services side, where you're actually providing something here and now, whether it's on the asset maintenance side, whether it's on the energy efficiency side, whether it's funding some installations in some of these areas, where it's putting up charging stations or providing software to charging stations.

1:28:05You know, it could be those kinds of things, which are more installation oriented, more rooted in the here and now of having to implement something at a ground level. I would say those are things that are a little bit more amenable to people who don't have capital and who can raise capital from some private equity or venture capital type from something in the recycling space, for example. So those are the kinds of areas I would say. Any one specific opportunity which you feel may be a problem in your industry, which you feel if somebody solved it in India, it'll be great to make some money. You must be buying from so many people.

1:28:44There'll be suppliers. there'll be. Yeah. I think if somebody can help us source land better. Land better. Yeah. Or help us sort out right of way problems. Those are the things that are endemic to us. So, or somebody who just does EPC, does project construction. Lots of people who can get into those sectors and project construction is a big opportunity. I would say so because, you know, all this 50 to 70 or 80 gigawatts that has to be executed somebody has to do the execution somebody has to do its maintenance and all the different things that go into executing these projects how big the opportunity would be how big i would say it would be at least if i were to assume that solar it would be maybe one and a half to two crores per megawatt and when it would be about the same so i would say maybe a hundred thousand crore epc total business size now a number of large conglomerates and people like us we just do it in-house but if there was a good credible person who could do it professionally run professionally managed that we could depend on we could also uh you know use some of their services so right now there aren't enough companies or there isn't there are there are uh there are companies out there but i'm saying that there is a lot of demand for those kinds of things.

1:30:03And there's no one or two top professionally run credit bill players? Not yet. Oh, very interesting. Not yet. So that's an opportunity. I would say that's an opportunity. Again, a lot of the sector has evolved in a fairly disorganized or unorganized kind of way. So there's an opportunity for somebody to come in and be professional in this area. But these are all hard execution-oriented areas, which is not that easy for... Somebody wants to make money, there has to be something hard or else everybody would be doing it. The easy money comes easy and goes easy. True. No, no. It's certainly based on my own experience.

1:30:41That's right. Nothing comes easy. You have to work for it. There are different levels of work and different things which people find complicated. But you have to do the hard thing. True. So that's one. So EPC we were talking about. EPC, software for let's say battery management services. What do you mean by software for battery management? So, you know, batteries interface with the grid. Batteries discharge and recharge themselves. They can, you know, so when should they charge themselves? When should they discharge themselves? You have software that runs them. So that could be something that somebody could come up with.

1:31:19There are, again, companies that are doing that right now. But again, nobody very large in that space. Similarly, for running assets, wind assets or solar assets, how do you run them in the most efficient way possible and take out every last drop of kilowatt hours that you can get from them? Somebody can come up with a great software package to do that. Another thing is, how well does a solar plant run in the future, in the next 15 minutes? Or how much is a turbine going to generate depends on wind blowing or solar based on cloud conditions and other things. So forecasting the performance of these assets over the next one hour, two hours, three hours is very difficult.

1:32:02But it's very, very critical information for the grid because the grid has to, you know, if a solar plant is going to go off generation, then the grid needs to know because then they have to get something else to get ramped up. Right. Or they have to do some demand side management. So that's another big area. Then demand side management is another massive area. Today, for example, most homes don't have any demand side management systems at all. So, for example, in your home, your fridge, your microwave, your television, your dishwasher if you have one, or your clothes washer if you have one, are totally all separate from each other, right?

1:32:40And there is no energy management system within your home that says, this is the time at which to run these and this is the way to run them in the most efficient way. There's nothing that combines all of these and gets them to talk to each other. So getting them to talk to each other, right? Today also what we don't have is we don't have in the grid time of day pricing. In the Western world, you see, pricing falls when there's overgeneration happening, let's say in the middle of the day when all the solar plants are running at full tit. That's the time when pricing for energy is cheapest. That's the time when your demand should be highest as well.

1:33:18So you want to incentivize people to run all their televisions and clothes washers and fridges and everything else at that time. By making it cheap for them to do that. Interesting. Okay, so we don't have time of day pricing in India. So first of all, the grid has to move to time of day pricing. So somebody can work with the distribution utilities, the discoms, to help them move in that direction. Figure out how to price electricity. You know, and how should that be done? And then for homes that are users of that electricity. to figure out how to use their own or tier their own demand to match whenever the prices are cheapest.

1:33:55Nice. So for example, when you charge an electric vehicle is when prices are cheapest. And by the way, your battery in your car can also serve as a provider of power into the grid when battery prices are the highest. So it's those kinds of things on the demand side. There's a lot of opportunity there. Today, that is totally underexploited. And that's an area where, so making appliances that can talk to each other, that are intelligent appliances, that can be managed centrally, that allow a homeowner to do all of this efficiency maximization, then allowing discoms to run the grid in a very different way in terms of pricing.

1:34:35You know, the whole grid can work in a very, very different way. So there's lots of things to be done at that end, actually. I asked you just what's the next big billion dollar opportunity? Yeah. And you answered three, four. I love it. Good. If you were to start again, and this is 2007, eight era for you, right? What is the next emerging sector, which is small right now, but can be potentially really big, which you see at this moment? I would say one of the areas definitely is supplying power to data centers. Data centers are going to grow very rapidly, as we all know. At some point, they're all going to want to buy clean energy, not grid-based power, which is 65 % coal-based and therefore not clean.

1:35:29Supplying power to them is going to be, I think, a big opportunity in the future. so that's clearly one thing I would say a second area would be around storage and anything to do with managing the grid because as I said one of the three key things is how do you manage the grid better so I think anything that can help them to manage the grid better your storage or any grid management kind of software or services I think will be very but anything beyond energy and electricity do you feel is there some other emerging sector that you see up and coming i think again you know if you can somehow find a way to make home appliances cheaper not cheaper smarter and more energy efficient i think that is something that could also play quite well let's take the case of atomberg for example which is making these fans but they're supposed to be quite a lot more energy efficient what is a personal problem in your life which you will pay somebody to solve for you know um let me give you an example on the personal side and one on the professional side okay just to give you a diversity of answers here i think on the personal side, I would say that something related to energy is I have two electric cars right now.

1:36:55And I see the models that are coming out, you know, while the numbers of models has increased, still not really that good. And I just want an existing regular car with an electric, you know, sort of engine. True. Rather than some different kind of car with an electric engine. I don't know why people have to jazz up cars just because they're electric. Just give me the regular car and just put an electric engine into it. That is, and along with that, give me a lot of charging stations so that, you know, I don't have to charge the car overnight and then have to think about how I'm going to planning it, you know, all of that.

1:37:35Just adds a layer of complexity to an already complicated life. So somebody could really simplify that. You know, I would say not just me, but a lot of people would shift to electric vehicles much, much faster. I absolutely agree. I have an electric car. Yeah. And since the time I've given up on my, you know, petrol car. Yeah. I have, I can't even go to Ranavala because I'm scared. On the professional side, I would say that, you know, the point that you talked about, which is people, very, very, very critical. And there are no easy answers. You have to touchy-feely your way, as it were, through these issues.

1:38:18Do I need a CXO? When do I need a CXO? What kind of CXO do I need? How do I get the right guy? Or when I say guy, I mean male or female. Just meeting somebody and talking to them for an hour. Who knows whether they are somebody who gets emotional, whether they have the right attitude, whether they work hard, whether they're available at all hours of day or night, if that's the way you work, you know. Are they committed to what they do? Are they a good team builder? Impossible to find these things out without working with them for maybe at least six months to a year. So hiring people is usually a crapshoot in my experience.

1:38:58So you know what you need to do? You need to develop people in-house. That's the best way of doing it. That gives people opportunity. it allows you to get people whom you know well but it requires a long-term mindset you know what it's like it's like R &D that's what you need to do you need to invest in your people yeah that's something that we've started working what's your process of hiring an executive you know more and more I'm trying to move people internally because as you've been around for a longer time. More people have been with us for longer. And I think it's only fair that there's a vacancy in the company that they are the guys who should get first shot at it, especially if they're people we know.

1:39:41It's only in rare instances where there's a certain expertise, there's a certain capability that we may not have. Then only we start looking to the outside for hiring people. But as far as possible, my view is we should hire people internally. But that's for your company because you've been around for a while. Young companies like me are fast growing it's tougher it's a lot tougher and that is why in the first I would say 10-12 years of our company's evolution it's all about hiring people from outside but now over the last two three years I've really started thinking quite differently because a lot of people have been with us for longer than five years or seven years and they've grown with us they've shown commitment to the organization and I think that is something that should be encouraged and rewarded so So that's, so that I think developing the organization and you know, I tell every young entrepreneur that you're not, you're not just building your business.

1:40:33You're actually building two things. A, you're building a business, which obviously all of us know. But the second thing you're building is you're building an organization as well. Most entrepreneurs don't recognize that. And you have to invest as much time in building an organization as you do in building your business. And that really means thinking about life very differently, thinking about the people differently, thinking about internal processes and systems differently, about building a culture, about building a value system. Those are very incredibly important things. And you know, one of the things that I take the most amount of pride in is that I have built a company with the highest degree of ethics and integrity as possible.

1:41:18And I did it because that's the value system that I personally have and I could not have thought about doing it any other way that's the thing I take the most pride in actually. That's something you should be really proud of anyway you know I was watching this video this morning of Travis the uber founder where somebody asked him how do you hire executives and he said executive hiring nobody in the world has figured out you need two muscles you need somebody who can manage and scale at the same time and you need someone who's a very core builder and who's great with people so you need skills which are managing skills and scaling skills and you need someone who's at the core of the bottom of builder hustler skill and this is like left brain and right brain and getting all of them together in a single person and finding that in a conversation is impossible.

1:42:17Yeah. So let me take a minute to just talk about a couple of things. One is that somebody asked Jensen Huang a question. Who's the smartest person that you've met? And he thought about that. And he said, you know, he said, I used to think about smartness in terms of, you know, analytical skill sets or somebody who could write code very well. But he said that skill set is gone now because AI is going to replace all of that. So he said the traditional definition that I had of smartness is no longer valid in today's world. He says the people that I think are smart now are people who can see around corners, people who can anticipate the future, people who have good judgment.

1:43:00Okay, and that I totally agree with. Because as an entrepreneur, you need to be able to see what's coming next. How do I position myself for the future before other people do? So I think it's very important to have that ability to see the future and to anticipate it as best as possible. And I'll sort of link that to the fact that when you build an organization, you need to have, in some ways, the integrity and ethics of, let's say, the Tata group. Because we all know they stand for a high degree of ethics and integrity. right? You need to have the execution skill sets of some of the large Indian conglomerates, okay, who are well known for their execution.

1:43:47I don't have to name them, right? We know who they are. And you have to couple that with an entrepreneurial nature of maybe one of the young sort of startup companies, maybe in the Western world that moves fast, that hustles fast, and that is able to be very nimble and agile. I think you have to combine all of those factors. And at different points in your company's evolution, you need different parts of those to be stronger. In the beginning, you need a more entrepreneurial mindset where you can move fast, see what's coming. At some point, you need to have the ability of being able to execute those ideas.

1:44:29And then you need to eventually make sure that your organization stands for something. That allows people to come and join you happily. That attracts the best people. And therefore, you need to stand for something that is really above and beyond. So you need to be able to do all of these things. And in your own journey as an entrepreneur in the business that you are creating, you'll have to think through that. And, you know, in these things, there are no right or wrong answers. It's something that you have to understand implicitly and intrinsically from your gut. Okay. and you have to take those decisions based on whatever you think is right or wrong and nobody can come and tell you Raj do it this way or do it that way you know you have to figure it out and that's the beauty of being an entrepreneur I agree that's why I've created a whole show called Figuring Out I'm figuring out at this point right you became an entrepreneur at 45 yeah what's the personal cost that you've paid to become an entrepreneur in your 40s So I wouldn't say there's been any cost.

1:45:32I would say that if anything, there's been joy. I have really enjoyed every minute of it. I have been in love with what I do all the way through. I've had the benefit of having a very supportive wife, Vishali, who stood with me through this whole thing and who's been very supportive right from the beginning.

1:45:54I've been fortunate that I've had good partners as shareholders and stakeholders I've had a lovely board over the last five years the opportunity has continued to evolve and grow much more than I could have anticipated and I think I've just been very blessed in that sense that I've been able to go through this journey and I would not have traded this for anything else in the world there's no cost to afraid? You know, I mean, I can't think of anything. I mean, maybe I spent less time with my children. Maybe my mind was more occupied with business issues than perhaps it should have been. You know, but my family has not complained about it.

1:46:36So I'm hoping that, you know, there wasn't a cost that I've ended up paying for it. So yeah, I really can't think of anything that I would have done differently. But it's a beautiful thing that you don't think that you have paid any cost. That's a great thing. Most of the people think that they've sacrificed some part of their life and they've paid a cost for an ambition. No, you know, I think that in my case, my ambition has grown over time as the opportunity has unfolded. And as I said, I think if you enjoy what you do, then it's not work any longer, no? Then it's just you're having fun. You do what you really like doing.

1:47:19And therefore, yes, there are, of course, points of time where you feel overwhelmed, where you get into the problems that come one upon the other, that you feel you have a difficult time dealing with. They, you know, they can impact you. They test your resilience. You'll get knocked down many times. You'll rage at the unfairness of the world around you. Right. And you'll say, why me? and all of that will happen, boss. And I'm sure it's happening to you and it happens to every single entrepreneur. But that's where, you know, you find out more about yourself. You need what you're made of. You know, you find out what you're made of.

1:47:58You know that resilience ends up being one of the most underrated but most important characteristics of any human being. You know, how many times you get knocked down and that you can get up. And if you feel that you're able to do that, then that's great. Yeah. Now some people have a thick skin. Things don't bother them. I'm not like that. I don't have a thick skin. I do get bothered. But you know, if you are able to then pick yourself up and carry on, I think that's good. Were you more ambitious at the age of 21 or 61? You're 61 now. Yeah. Are you more ambitious now or when you were 21? I think I'm more ambitious now.

1:48:42I love it. Yeah. At the age of 21, look, you don't know about the world. You don't know about your place in the world. You don't know what you're made of. Right? You have less control over your life. The whole world is unknown. So it's harder to really create big ambitions because you don't know how you're going to achieve them. I think at this point I'm a little bit more mature I've gone through a lot of hard knocks I can see the future which we've talked about so extensively over the last you know couple of hours and and I think that allows me to see a little bit better as to what is doable and what is not doable and I really would like to maximize on what is doable nice thank you so much it was a pleasure having you thank you so much for having this conversation with me thank you for giving so much time no no listen this was really enjoyable Thank you so much.

1:49:38It's been one of the much more enjoyable conversations. And you gave me a chance to reflect on so many things. And while I was talking, a lot of things were coming together in my own head as well. Thank you. So thank you for that. I'm glad I could do that. Thank you so much for doing this. Thank you for watching this episode till the end. We would love to know what you liked or disliked about this episode and which guests you would like to see on the show. Let us know in the comments. your feedback help us improve and make every episode a little better. I'll see you next time. Until then, keep figuring out.