The internet of things (IoT), once bran­ded as a futurist speculation, is now redefining the way people perform and manage their day-to-day tasks. The technology is all-pervasive and disrupting every industry, from transportation and logistics to healthcare and manufacturing. The number of internet-connected devi­ces (12.5 billion) surpassed the world population (7 billion) way back in 2011; by 2020, they are expected to reach around 26 billion globally.

India, too, is taking momentous strides in the IoT space, despite beginning its IoT journey much later than the developed eco­­nomies. According to research firm Deloitte, India is expected to have 1.9 billion IoT units by 2020, up from the current base of 0.06 billion. The Indian IoT market is expected to be worth $9 billion by 2020, a seven-fold jump from $1.3 billion in 2016. Industries such as utilities, manufacturing, automotive, transportation and logistics will see the highest adoption levels, as per Deloitte.

IoT presents opportunities for players across the value chain, including hardware and application vendors, and network and system operators. Around 60 per cent of the players in the Indian IoT ecosystem are start-ups. This is primarily because IoT is a new arena and the nimbleness of start-ups allows them to listen and react to market needs quickly. Also, since IoT is domain specific, it requires significant technology innovations, which start-ups are ideally suited for. However, a key challenge for such IoT ventures is working out a viable business model for their products and services. The lack of market confidence and readiness to invest in and purchase emerging IoT solutions is a key impediment to growth. More­­over, once a start-up commences commercial operations, scaling up to keep pace with an expected explosion in orders is a challenge. As IoT moves from a peripheral concept to the mainstream, it is prudent to address these issues.

Evolving policy landscape

The concept of IoT was first mentioned in the National Telecom Policy, 2012. The policy suggested the adoption of international best practices to address various issues related to machine-to-machine (M2M) communication, a key component of IoT. These include encryption, privacy, network security, law enforcement assistance, interoperability and preservation of cross-border data flows.

Subsequently, in May 2015, the government released the National Telecom M2M Roadmap, which defined the app­roach to M2M adoption. It sought to establish M2M communication standards in the country and lay down guidelines for service provider registration, know your customer norms for M2M, SIM transfer, etc. It also aimed to address issues related to spectrum availability and roaming requ­ire­ments for M2M, quality of service in M2M communications, and the energy footprint of M2M networks.

In another major policy move, the government released the draft IoT policy in 2015 with the aim of creating a $15 billion IoT market by 2020 and increasing the num­ber of connected devices in India ­fr­om around 200 million at present to over 2.7 billion by 2020.

The policy proposes a multidimensional implementation approach for IoT comprising five vertical pillars – demonstration centres, capacity building and incubation, research and development (R&D) and innovation, incentives and engagements, and human resource development – along with two horizontal support components, standards and the governance structure.

The draft policy aims to develop domain-specific strategies for IoT, including green buildings, smart grids, smart manufacturing, industrial monitoring, agriculture, smart cities, healthcare, connected homes and telematics. It talks of giving priority to start-ups in domains such as memories, processors, sensors, low-power devi­ces and solar electronics. It also envisages cross-border cooperation by inviting overseas experts to provide training for IoT-related programmes. Meanwhile, at the state level, the Andhra Pradesh government has approved a first-of-its-kind IoT policy that aims to make the state an IoT hub by 2020, creating 50,000 jobs in this space. The state government has proposed the setting up of 10 IoT hubs and attracting 100 IoT companies to set up operations.

Laying the groundwork

To support fledgling ventures and expand the reach of IoT across the country, some areas in which the government can en­han­ce its focus are as follows.…

Financial support for research and innovation: Given that IoT is still at a nascent stage of development and start-ups lack the financial resources to undertake large-scale R&D, public investment in research and innovation is imperative. This support needs to be wide-ranging and not targeted at certain aspects of IoT alone.

The draft IoT policy takes cognisance of this. It proposes to create resource centres and test-beds to help the IoT community experiment with various devices and applications. In this context, NASSCOM has established a centre for excellence for IoT in a joint initiative with the Ministry of Electronics and Information Techno­logy and the Education and Research Network. In addition, the policy proposes the setting up of centres of excellence for IoT, which will have IoT incubation infrastructure to support start-ups, small and medium enterprises, students and other innovators. These centres will be set up in major cities and will house hardware design tools such as 3D manufacturing fa­ci­­lities, printed circuit board (PCB) manufacturing and PCB assembly, rapid prototyping,  wireless development kits, application sensors, software tools, training on specific technologies, industry interface, etc. that would otherwise be difficult for start-ups to afford.

According to Dr Rishi Mohan Bhat­nagar, president, Aeris Communications, “R&D and capacity building have been rightly identified as thrust areas by the draft IoT policy.”

Stimulating collaborations and raising market awareness: Apart from funding research and innovation, it is important for the government to support IoT in “softer” ways, such as stimulating collaborations and raising market awareness. Multi-agency collaborations, particularly partnerships with other countries, universities, industry, local governments and civil society are critical for developing and commercialising new IoT applications. The government also needs to play a pro­active role in disseminating knowledge and information across the IoT market since inadequate access to information may lead to a duplication of efforts in research and innovation.

In this context, the draft IoT policy sugg­ests formulating an International IoT Research Collaboration (IIRC) scheme. Under this, the government would collaborate and initiate treaties with other countries for joint R&D projects in IoT, on a 50 per cent contribution basis. Under the IIRC scheme, funds would be disbursed to the IoT industry in the form of loans, grants and equity for approved projects after analysing the capabilities of the bidder.

Boosting demand: IoT markets in many countries face a demand-side problem owing to the high costs of scalable products and services and the barriers to their diffusion. To address this issue, public authorities need to purchase smart technologies for the delivery of public services and infrastructure. Aside from reducing inefficiencies and costs, this could help spur market demand for IoT applications. Demand from public authorities could also help IoT ventures build ­mo­re robust use-cases and de­monstrate the impact of their products in the wider market. There is thus a potential need for an industrial policy to stimulate demand in the IoT market.

The draft IoT policy seeks to address these demand-side concerns. As per the policy, the government would set up projects using IoT and it would either reduce the customs duty or even allow full exemption on the import of the raw material required for such projects. Further, the raw material purchased in the domestic market would be entitled to excise duty reimbursements. This would be in addition to existing incentives on IoT products in the Modified Special Incentive Package Scheme policy.

The government’s Smart Cities Mis­sion and Digital India programme are also likely to fuel demand for IoT products and services. The various initiatives proposed to be taken under the Smart Cites Mission such as smart energy, intelligent transport systems, waste management, smart lighting, etc. would be based on IoT. The Digital India programme, which aims at transforming India into a digitally empowered society and a knowledge economy through the creation of a robust digital infrastructure, will provide an opportunity for start-ups to build digital solutions around IoT.

Harmonisation of IoT standards: The IoT device marketplace is very broad and diverse, and hence there is a risk that, without policy interventions, IoT standards could remain disharmonised. The lack of common standards can hinder the communication of devices and information systems in an IoT ecosystem. In addition, it can make IoT products incompatible with legacy systems. A lack of standards can take away the focus from innovation to fragmented technical solutions. Moreover, early industrial suppliers could dominate with their versions of standards or even with their proprietary communications and connectivity technologies. Har­monisation of standards is important to achieve interoperability and take advantage of the system-wide benefits offered by IoT.  Standardisation also makes it possible to start exploiting economies of scale at the formative stage of a market.

The draft IoT policy seeks to facilitate global and national participation of industry and research bodies for formalising globally acceptable IoT standards, including spectrum energy communication protocols standards, international quality/integrity standards for data creation and data traceability, and standards for energy consumption.


Over the next few years, IoT is expected to take most of the human-driven processes beyond their conventional realms by integrating advanced technologies such as analytics, cloud computing, artificial intelligence and robotics. This will help enterprises better manage their operations and offer advanced products, solutions and services to their customers. According to T.V. Ramachandran, president, Broadband In­dia Forum, “IoT will continue to be dep­loy­ed as a mainstream path to generate higher revenues, thanks largely to the rise of four key trends that reached an inflection point in the past year – data monetisation, core IoT networks and the emergence of low-power devices, platforms-as-a-service, and investment in IoT start-ups.” These, along with a sup­­portive regulatory landscape, improving network connectivity and greater em­p­hasis on security are expec­ted to speed up IoT adoption and deliver measurable results across industries and sectors, Ramachandran adds.

While India has been slow to catch up with previous waves of technology (computers, smartphones, etc.), it is moving apace to leverage the opportunities presented by IoT. The government seems to realise that to get ahead, it needs to get started. In a significant affirmation of this stance, it has expressed its intention to auction 5G spectrum this year, making an early move to initiate the roll-out of the latest communications technologies. It expects that the spectrum will be utilised for a host of new-age initiatives and services, including IoT, M2M communications, instant high-definition video transfer and downloads, and connected smart cities.

While the final IoT policy is still awaited, the intent of the government is clearly in line with industry expectations. According to Bhatnagar, “At the ground level, we need to focus on using IoT to solve urban/rural challenges with the government acting as an enabler. What is needed is for the government to bring all stakeholders together to work towards the identified vision of a secured, connected and smart IoT-based system, powering diverse initiatives. We need to also prioritise skill development as a part of the overall capacity building exercise.”

A well-connected nation is the first step towards a well-served nation and, hence, it is important for India to participate actively in proliferating IoT. To this end, there is a need for stronger collaboration and coordination between the government and the industry. There is also a need for greater societal appreciation for entrepreneurship, access to risk capital and marketability of IoT products and solutions.

Puneet Kumar Arora