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Indian Blockchain District Purpose And The Real Reasons For Alliance With China

29 October 2018 16:17, UTC
Indian Blockchain District Purpose And The Real Reasons For Alliance With China
By Daria Piotrovskaya

Blockchain calls Indian Prime Minister Narendra Moda, an active reformer of a revolutionary technology. Therefore, it is not surprising that an ambitious project is being implemented in the country: the construction of the blockchain quarter has begun in the capital of the Telangana state, Hyderabad. Rama Rao, IT state minister, believes that this is a reason for pride and, moreover, “India’s global step towards world leadership in the digital era.” At the same time, the authorities are negatively disposed towards digital currencies: the Supreme Court cannot decide on their legal status. Judging by what we see in India and China, this is the Asian way - to promote the blockchain, holding back the development of cryptocurrency.

At the heart of the digital ecosystem

The news was picked up by Asian media, calling the future digital hub of the country a thousand wonders claiming it as the first one in the world. Of course, this is an exaggeration. Understanding the benefits of DLT encourages many market players are to create the necessary infrastructure. Construction of blockchain hubs started in the Philippines. In Zurich, Trust Square is being expanded to become the largest blockchain center in the world with 300 workstations for startups and researchers. In the Chinese province of Hebei, DLT is used to create the city of the future Xiong'an. And recently it became known that the authorities of Seoul will allocate $108 million by 2022 for the transformation of the South Korean capital into a blockchain-city. And another $53 million for the construction of Gaepo Digital Innovation Park and Mapo Seoul Startup Hub with a capacity of 200 startups.

But India has always been at the forefront of high technologies, by the way, so Hyderabad was chosen for the experiment as one of the industrial and scientific centers, where a pool of developers, scientists, and IT developers is already working. The project of the Indian blockchain district is implemented in the form of a public-private partnership. The authorities of Telangana are responsible for creating and maintaining the infrastructure of the new district, providing political and regulatory support for blockchain startups. And breathing life into this cluster of buildings, filling it with technological solutions is the task of the Indian company Tech Mahindra.

According to the market researcher, blockchain-consultant from New Delhi Sandip SINGH, the project is unique in that it will give an opportunity for established, global players to interact with local ones, forming new partnerships in business. The district will unite a special blockchain platform based on the Eleven01 protocol. According to the state authorities, the blockchain district will help integrate new DLT projects into various sectors of the country, create jobs for city residents.

A logical step in development or a paradox?

On the one hand, the creation of a blockchain district looks logical; it fits well within the framework of the Indian government’s digital development program. Revenues of the IT sector and business process management in the fiscal year 2017–18 amounted to $154 billion. Experts expect from the economy of the Country of thousands wonders to grow by 7.4% in 2018 and 7.8% in 2019. According to the latest projections, India's digital economy is likely to cross $1 trillion by the financial year 2022. The report launched at the India Mobile Congress 2018 also forecasts that mobile data usage in the country is likely to surge five times by 2023. " India became the world's second largest telecom market in 2018 with over a billion subscribers," said the report. The total mobile subscriber base is expected to reach 1.28 billion in FY 2022 and data consumption is expected to reach 7 GB per subscriber per month.

On the other hand, the project in Hyderabad is a paradox, because India is a country with an underdeveloped infrastructure, a caste system in which 73 million people live below the poverty line. A shortage of skilled labor, a high level of corruption, and an increase in oil prices all hinder the country's economy. Annual GDP per capita remains one of the lowest - at $1,939.61 as of 2017. For example, in China, with which India is in economic partnership, this figure is $8,826.99.

It is against this background that large-scale blockchain-district projects are being created in India. According to PwC, in 2018 the United States leads in the blockchain area - 29%, China confidently holds the second place - 18%. India, from 5% to the leaders, is still far away, although experts predict its rapid growth. In their opinion, the construction of the blockchain district will seriously advance India in the DLT technology market and will open up fundamentally new opportunities in the digital world. Tina SINGH, chairman of the blockchain committee created by the government of India, said: "In order for the blockchain to bring maximum efficiency to the country's economy, it is necessary to combine the efforts of government, regulatory bodies and corporations."

Elephant clings to dragon tail

PRC Chairman Xi Jinping calls China and India two important forces that can bring prosperity to Asia and create opportunities for the whole world. The volume of bilateral trade with China in 2017 increased by 18.63% over the same period last year and reached $84.44 billion. In 2000, this figure was less than $3 billion.

Of course, the idea of ​​partnership between India and China in these countries is very popular, in recent decades they have more and more points of contact, which since 2006 have been merged into one term Chindia (China + India). But India, rather, is China's junior partner, who acts as a driver in this pair, as the numbers convincingly show.Thus, the annual GDP of the Middle Kingdom was more than $12 trillion in 2017 and more than $14 trillion in 2018, India - $2.6 trillion in 2017 and more than $2.8 trillion in the current year.

As a result of alliance of the two countries could form the largest market in the world (2.5 billion consumers). More than 40% of the population of India and about 55% of the population of China have access to the Internet and telecommunications services. Together, these figures make up 1.38 billion people, or 47% of Internet users around the world - a huge potential for the crypto industry.

Now the Indian economy is largely repeating the path of transformation, which China went ten years ago. “China is far ahead of India in terms of technology development and adaptation,” said our commentator Sandip SINGH. - One of the main reasons is the federal structure of India, which provides states with greater autonomy in decision making on the one hand. And carrying disagreement between the states, which slows down the economic development of the whole country, on the other. Therefore, for example, in Andhra Pradesh and Telangana they actively promote the blockchain, and for other states the areas of its application are still a controversial issue.”

According to the expert, the future of Asia depends on the partnership and competition between India and China - both in the economy and in other areas.

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