Never mind the hiccups in the Chinese economy and its effects, the volatility in global markets and the downturn in commodity prices, the local business community is excited over the Make in India Week jamboree which begins in Mumbai on Saturday.
The event expects to attract thousands of global corporate bigwigs who will, hopefully, invest in world-class manufacturing facilities in India. It also hopes to foster the sharing of ideas that benefit the country. It is, in other words, an effort designed to take Prime Minister Narendra Modi’s ‘Make in India’ exhortation from slogan to reality.
The first of its kind in India, MiIW is organised by the Government of India’s Department of Industrial Policy and Promotion (DIPP). Unlike similar national efforts in the past, it is not happening in Delhi. A possible reason: Delhi state has no land available to create new manufacturing facilities; other states which do have the space will have to lead this. Why Maharashtra, and Mumbai? Aside from the city’s traditional role as India’s finance and business capital, Chief Minister, Devendra Fadnavis, shares a good rapport with the PM, and seems to one of the next gen politicians being groomed for the national stage.
The DIPP has invited business houses, mainly from the manufacturing sectors, as well as SMEs, to participate in the event and put up stalls at the venue. The Hindu spoke to a number of invitees: none said they felt compelled to participate, though some did admit, off the record, that they felt it would not be polite to refuse. In fact, the underlying mood was one of optimism and pride. Various business houses and industry associations have offered to do their bit for the event to ensure that it becomes a grand success and leaves a positive impression in the minds of foreign delegates and prospective investors.
“We have offered to create an India evening for the visiting CEOs. We will showcase what India is doing in terms of diamonds, gems and jewellery,” said Praveenshankar Pandya, Chairman, Gem & Jewellery Export Promotion Council. “This event will create awareness on India in terms of what we are doing and how we can deliver. There was the euphoria of getting things done in China, 20 years ago; India missed out as we did not have a cohesive policy and concerted strategy. Today with the government pushing initiatives like ‘Make in India,’ people will take notice of us and the quality of manufacturing will go up automatically to keep up to expectations.”
Asked what he thought would result, in concrete terms, Mr Pandya said, “It is too early to say. [But] when you announce things in a certain fashion, the desired objective will be achieved. The only thing is at what pace? There is no doubt that things will go in a positive direction but to give pace to the PM’s idea, other departments of the government and the states will have to do their job.”
Pawan Goenka, Executive Director, automobile major Mahindra & Mahindra Ltd feels that this event will help in building brand India and will benefit the country in the long run. He expressed cautious optimism: “You cannot draw a one-to-one correlation; brand-building is a long time affair. All these things together build a brand, so Make in India is a very important initiative and having events like this and having Indian companies showcase what they have in India, is very important. I think India will make an impression, not only in the country but outside.”
Mahindra is not going to display any products, but it will showcase the technology that has enabled it to manufacture for the global market, a sort of show-and-tell for the Make in India story. Mr Goenka will be a speaker at the event, and group chairman Anand Mahindra is also expected to speak.
Pravin Shah, president and chief executive of M&M’s automotive division, said platforms like this will help in getting stakeholders who can collaborate and co-create the future of India, which the PM has envisaged. “Such events help us in terms of sharing the ideas and thoughts. We can also discuss what we do differently to get the benefits. Indian companies will get collaboration, technology and technology partners.”
US auto major Ford India has also been making in India for nearly a decade; it exports 50 per cent of the vehicles it makes here. Its Ford Ikon was designed for the Indian market, and the compact SUV EcoSport was designed and manufactured in India for both national and global markets. Ford’s India MD & CEO, Nigel Harris, who was involved in development of the Ikon, told The Hindu, “Clearly the whole concept is creating something and adding value to manufacturing, to exports, creating wealth and economic growth for the country. It just makes sense. I think the PM has been selling the India story aggressively and working with different countries and setting up relationships. And you will see more of that. It is the right thing to do.” Like many others, Mr Harris pointed to China as an example: “If you look at Chinese economic growth, it did not start with domestic consumption; they started by providing value-for-money products and exporting all over the world. When you do that you are lifting the economic foundation of the country and people of all strata.” He added a word of advice: “I am sure as we go along we will see better trade agreements with Europe, North America, Japan, you will see more of that. But it has to be both ways. Lifting trade barriers will help India achieve higher economic growth.”
Navroze Godrej, head of strategy and innovation, Godrej & Boyce, feels positive. “The more people enter the manufacturing sector, pursue careers in design, the better it shapes India’s future. Large companies like Godrej should be supporting it. I am sure it will have a rub-off on the approach industry takes in investing in manufacturing. The corollary to that is, the manufacturing sector will only grow and India will only become globally recognised if there is simultaneous emphasis on design.”
Mr Godrej believes that among the objectives of the event is to encourage young people to look at careers in manufacturing and engineering, to “start a movement at the grassroots level. The more young people are encouraged to enter this field, the more sustainable India’s growth will be.”
Shoe and clothing manufacturer Woodland India is contemplating stopping the sourcing of products from China and Bangladesh, Harkirat Singh, the company’s MD said. “We are now encouraged to manufacture all our required products here. We will invest in new factories and we expect the government to encourage local manufacturing," he added.
On the event, he said, “The slogan has created a buzz. Europeans who have been sourcing products from China, Bangladesh and even Africa are considering sourcing from India and are willing to invest.” He, however, also sounded a note of caution: “One should not expect quick returns, it is for the longer term. The Chinese worked very hard to convince the world that they can deliver and were very consistent with their approach [and only then] could they become the factory of the world.”
Deven Choksey, MD and CEO, KR Choksey Share and Securities, felt that the MiI initiative did not have much behind it except the slogan earlier. With the Week, he said, “Apart from big corporates, a lot of SMEs and MSMEs will participate. These small companies will get a change to know how they can contribute. The ball has started rolling. Activities will take place. The exhibitions will help one understand the subject better. A lot of international visitors will be coming and will go back after having a better understanding about India.”
Gokul Chaudhri, Leader, Direct Tax, BMR & Associates LLP, said, “This event is another platform for engagement between investors and the government. Dialogue is important regardless of the fact that these events do not yield any immediate and direct outcomes.” He said that the PM and his team must be conscious of the fact that the global visiting CEOs would be probing for progress on reforms, for which tangible steps need to be taken.
G Raj Narayan, MD and Chief Innovator of the Bengaluru-based Radel Group, which is into aerospace and electronics, feels that China’s emergence as the world’s low cost manufacturing base literally shut the lid on India’s factories which were completely unable to compete leading to many of them turning to trading rather than manufacturing. “The slogan appears to aim at encouraging product manufacturing within India instead of importing. Though this would certainly lead to establishment of modern factories in India with substantial investments by global companies, this would not contribute to long-term benefits unless Indian companies themselves create our own products of global standards. [Make in India] needs to encourage Indian intellect, design and manufacture. The correct interpretation of this slogan would be to ‘Design, Innovate and Make in India,’ he said. However, he added that ‘Make in India’ has remained a slogan and campaign so far. “There is absolutely no change on the ground as far as MSMEs [medium- and small-scale enterprises] are concerned. Considerable policy and procedural changes are required to make any difference on the ground and this would definitely take time to percolate down to operating levels of the bureaucracy. Sweeping changes must be made to the system itself to ensure a time-bound completion of tasks, and make every member of the bureaucracy accountable for this, with severe punitive measures for defaulters.”
Most people The Hindu spoke to formally and informally echoed this: it is important to develop the ecosystem. We need systems and structures to make manufacturing easier and quality benchmarks high before the world comes to India to source products and contributes to our economic growth. MiIW won’t bring the dollars and euros gushing in to India immediately, many of the experts and business people we spoke to cautioned, but they will come in eventually. The immediate value of the Week was in the networking, they said. The Hindu’s team will bring you the best from the event next week.
