Make in India for Indians

If there is one big bone I have to pick with Make in India and related work, it is this. We have to Make in India for Indians first before we invite competition from outside which we may not survive. Think. When 1.3 billion Indians start consuming goods and services, water, food, electricity, health care and education, we will not be able to meet the demand. The entire business and commercial world abroad is looking to India as a potential market for goods, services and more. In the many visits that Prime Minister Narendra Modi has made to foreign countries and his counterparts who have visited New Delhi, trade and commerce – bilateral and multilateral - have got top billing. The day Indians start consuming world-class goods and services and demand quality products right down the line, we’re talking. The days Indian service providers across the spectrum understand that service is not servility our understanding of what is our right and what is bullying (domestic and international) will reach a new level. The day we in India tell the major powers we do not want only assembly-line investments and jobs Indians would have arrived. The last thing Indians deserve is to become the industrialised world’s dumping ground.

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India is slated to be among the world’s top three economies over the next decade. Our GDP is expected to grow 7.3 per cent in 2018 – 2019. The country remains in the top three for the number of start-ups and according to data from the Reserve Bank, the country’s foreign exchange reserves stood at US$ 400.49 billion in mid-September 2018. According to India Brand Equity Foundation (IBEF) and initiative of the Ministry of Commerce, the investment climate in the country is positive. “The M&A activity in India increased 53.3 per cent to US$ 77.6 billion in 2017 while private equity (PE) deals reached US$ 24.4 billion.”

Some other successes listed by IBEF (and I pick a clutch and quote verbatim) are:

• Exports from India increased 20.7 per cent year – on – year (yoy) to US$ 221.83 billion in April – August 2018-11-11
• Income tax collection in the country reached US$ 137.75 billion (Rs. 21,000 crore) in 2017 – 2018
• India’s Foreign Direct Investment (FDI) equity inflows reached US$ 389.60 billion between April 2000 and June 2018 with maximum contribution from services, computer software and hardware, telecommunications, construction, trading and automobiles.
• Some 10.8 million jobs were created in the country in 2017.
• India has improved its ranking in the World Bank’s Ease of Business Doing Reports by 23 spots over its 2018 ranking and is ranked 77 among 190 countries in the 2019 edition of the report.
• The World Bank has stated that private investments in India is expected to grow by 8.8 per cent in financial year (FY) 2018 – 2019 to overtake private consumption growth of 7.4 per cent and thereby drive growth in India’s gross domestic product (GDP) in FY 2018 – 2019.
• India’s Index of Industrial Production (IIP) rose 5.4 per cent yoy in April – July 2018

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A small group of Indian businesspeople are also shopping abroad and they are picking up best – in – league companies. My favourite show-India-off moment came when Anand Mahindra bought Pininfarina, the god of car and coach making (they design the Ferrari) in Italy. Other highs have been when the Tata Group and Bharat Forge (BF)* make superb acquisitions abroad. There’s no car in the world that does not have a BF component. I began this piece by stating that Indians deserve quality products and not everything Made in India is up to the mark. There’s a reason for this and I’ll come to that in a minute.

Eleven million jobs in 2017 is a dismal number. Enabling an atmosphere that is conducive to job creation is the government’s business. It has to do this without being heavy-handed. That is unfortunately not the case and while data on ease of doing business in the country says otherwise, speak to people outside of the India Inc. league and Indian Inc. off the record and the story is quite different. While most acknowledge that the direction is right, the systems that can bring about a nuts and bolts transformation are sluggish and even stuck. Just one number will show how ineffective ways can lead to indifference. Let us take the skill development sector that was a flagship project of this government. It has trained some 41.3 lakh people in the past three years and only a little over six lakh people have been placed. Why are jobs not being created?

An interesting fact that jumps out is just how little money is pumped into the health and education sector. What is the logic of having more IITs and super speciality hospitals when people cannot spell and write one coherent sentence and we have stock-outs of life-saving medicines? Why is there no ambition when it comes to wanting the best of health and education? Both have an impact on our daily lives and we make-do or ensure we are fine while millions are ignored.

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We don’t take pride in our work. We are either arrogant or subservient. We are happy with jugaad - fix it so it works. Electricians, plumbers, carpenters, masons, to name a few, are largely unskilled but employed. Hiring skilled labour is expensive so builders make-do. Hiring trained road layers is non-existent so get untrained people to lay roads, which result in potholes before the tar dries. Our roads are bad, You can fix a lamp in the house with a jugaad, but no nation can be built on that rickety convenience. In fact, no big country has seen a decent economic take off without a manufacturing sector to boot. We in India do not respect small and medium enterprises (SMEs). When I tell people that over 90% of companies in Switzerland (ten global brands for some eight million people) are SMEs, there is disbelief. The same applies to Germany, Europe’s industrial powerhouse. We in India need at least 15 million new jobs year-on-year (yoy) if we have to set sail. This is what will lead to Making in India for Indians upon which we can build our export and trade policies. In the absence of a strong foundation, no structure is sustainable.

I will write about the battles that wait for us as the World Trade Organisation (WTO), the world’s free trade police in another post. For now, let us not compare ourselves to China or the United States (US) as we try and grow our economy. They are economic and military giants and when one sneezes the other one gets a cold. Let us also not compare ourselves to Singapore or Switzerland – one is a dictatorship and the other has a work - ethic that we don’t. Let us work towards Making in India for Indians. That means not chasing miracles and working steadily and slowly towards achievable goals across sectors that make the country function and citizenry engaged. Let us do it with a sense of ownership and pride, in that order. The rest will follow.

*Subramaniam has worked for Tata Consultancy Services (TCS) and Bharat Forge in Europe.