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 India
as a manufacturing hub? Most people would greet the thought with
derision. After all, efficient manufacturing requires, at the very
least, large capital, reliable power, first-rate roads, hard-working
labour, and no disruption. Since practically none of these exist,
how, conventional wisdom asks, can we even dream of being a manufacturing
power?
To answer this question, look at an area that
is altogether different: computer software. This is a sector in
which India has, without doubt, been very successful and is on the
verge of becoming a major global centre. This industry too needs
reliable power, besides highly-dependable telecommunications (especially
for 24X7 operations). It needs to move people in large numbers,
both locally and in and out of the country, quickly and efficiently.
It also needs equipment like PCs and telecom gear, much of which
has to be imported.
Looking at this list of essential requirements
a few years ago, most analysts would have dismissed India's ambitions
of emerging a software giant. After all, the power situation was
(then, as now) dismal, international bandwidth scarce and expensive,
local telecom links dependent on a fickle state monopoly, not to
forget the dismal mass transportation scene. To add to this, international
travel was difficult, with poor connectivity and visa issues; imports
difficult, slow and expensive; and red tape abundant.
Yet, innovative work-around methods were devised, appropriate institutions
(like the software technology parks) created and major changes effected
(particularly in telecom) through close industry-government partnership,
and this made possible the success story of Indian software.
The lessons of the software success story are
clear and eminently applicable to manufacturing. Public-private
partnership, a clear vision, excellent leadership and management,
fiscal incentives, and a cohesive, proactive industry association:
these are some of the key elements for success.
Already, there are some interesting examples
in manufacturing. A steel plant that is amongst the world's most
cost-efficient. Forgings that compete successfully in the global
marketplace. Auto components that are sourced from India because
of their price and quality. Two-wheelers that capture global markets.
These outstanding success stories are pointers to the future, and
are happening despite numerous constraints.
Imagine, then, what could happen with better
infrastructure, more supportive policies and efficient procedures.
Through the years of Nehruvian planning, in much the same way as
our educational institutions honed software expertise, the country
developed its manufacturing base and expertise. These skills now
form a reservoir that can fuel a manufacturing revolution. Even
more than software, the abilities here span the whole range: from
design of turnkey projects (system architecture) all the way down
to component manufacture by ancillaries.
The roadblocks need to be removed. We need
to address the crucial four Ps: power, procedures, policies, and
ports (both air and sea ports). While the ports have dramatically
reduced the turnaround time for shipping, a lot more needs to be
done. We must aim to be at par with Singapore, nothing less.
Since much of this depends upon computerisation,
it will indeed be a shame if the global leader in software cannot
benefit from its own expertise. Industry too can gain a great deal
from information technology, as others abroad have done. Policies
and procedures can-and must-be changed quickly, with the resulting
benefit-to-cost ratios of this being huge. While improvements in
utility-based power is a long-term matter, short-term solutions
are feasible at a cost. The solutions are largely known; it is probably
the will that is lacking. Clearly, sustained advocacy has a role
to play here.
Given its expertise and natural advantages,
India is well-positioned to be a major manufacturing base. A few
positive steps can easily turn what is yet an unrealised potential
into reality.
These are the personal views
of author and not necessarily of NASSCOM.
The author can be reached at kkarnik@nasscom.org
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