India should look to China for lessons on building technological capabilities rather than continue relying on a model centred on providing software services to global companies, Zoho Co-founder and Chief Scientist Sridhar Vembu said on Tuesday.
Speaking at YourStory's TechSparks 2026 in Bengaluru, Vembu argued that China had successfully built and retained ownership of critical technologies, allowing it to capture economic value and develop globally competitive businesses. "As much as we think of China as adversaries, I actually look to them as gurus," Vembu said.
"Chinese technology landscape has many more lessons to offer us than America does today," he added.
Vembu said Zoho's own journey had drawn inspiration from East Asian economies, including Japan, Taiwan, South Korea and China, which developed sophisticated technology industries despite constraints involving resources, population density and economic development. He recalled how Chinese engineers visiting Zoho's Chennai operations around 25 years ago were perceived by their Indian counterparts as coming from a poorer country.
"Nobody would say this today," he said, pointing to China's subsequent transformation into a major technology power.
Why ownership matters
At the heart of Vembu's argument was a distinction between developing technology for others and owning the intellectual property that generates long-term economic value. India, he said, performs a significant share of the engineering work for some of the world's largest technology companies but does not capture a proportionate share of the resulting profits.
Vembu claimed that approximately 40–50% of NVIDIA's chip design work, including substantial verification work, happens in India. He also pointed to the significant software development undertaken in the country for Microsoft, Oracle and Cisco. These estimates were not independently verified.
"If you are doing 50% of the work and 50% of the value accrued here in a hypothetical world," Vembu said, Karnataka's GDP could be at least two or three times its current size.
Vembu contrasted India's experience with that of China, which invested in domestic technology platforms even when they initially lagged their international competitors. He cited Baidu, which emerged as a Chinese alternative to Google, and WeChat, which became central to China's digital ecosystem.
These platforms, he argued, helped create the technological capabilities, user bases and data ecosystems that supported subsequent innovation, including the emergence of globally competitive companies such as TikTok and advances in AI. "That foundation layer was necessary for them to build the next stage," he said. For India, the lesson was to invest in the underlying technologies rather than focus exclusively on developing the latest AI models.
Preparing for a new software economy
The push for indigenous technology capabilities also comes as Vembu anticipates significant disruption to India's traditional software industry.
During his keynote, he estimated that AI already writes better code than 60–70% of software engineers and could outperform as many as 90% within three to six months. These were his projections, not independently established benchmarks. He compared software development to the handloom industry before mechanisation, warning that AI could dramatically reduce the number of engineers required to build software. However, Vembu said Zoho was not responding to the prospect of automation by laying off employees. Instead, the company was redeploying engineers to work on other technology capabilities.
"We know we can redeploy them to build all this stuff," he said.
As AI threatens to change the economics of software development, Vembu believes India must use its engineering capabilities to build more of the underlying technology itself. China's experience, he argued, demonstrates the long-term value of that approach, even if the path requires years of investment and the willingness to develop products that may initially lag established global alternatives.
"The new tech order is: you have to learn to solve our own problems," he said.