India's aspiration to elbow China out and become a global manufacturing hub faces significant challenges, according to NR Narayana Murthy, co-founder of Infosys. Speaking at the ‘ELCIA Tech Summit 2024,’ Murthy expressed skepticism about India's ability to compete with China's manufacturing prowess, adding that government involvement and public governance improvements are crucial for India to make any substantial progress in this sector.
Murthy cautioned against using grandiose terms like "hub" and "global leader" prematurely. "China has already become the factory of the world. Around 90% of things in supermarkets and home depots in other countries are manufactured in China. They have six times the GDP of India. It is too audacious of us to say India will become the manufacturing hub," he stated. This stark comparison underscores the significant gap India needs to bridge to rival China's manufacturing capabilities.
The Infosys co-founder explained that while the IT sector thrives on exports, the manufacturing industry heavily relies on domestic contributions and government support. "For manufacturing, by and large, the domestic contribution is more, and the government plays a big role in the success of manufacturing. Unfortunately, the response time, transparency, accountability, speed, and excellence in public governance in a country like India still need to improve," Murthy said. He emphasized that reducing the interface between government and industry is essential for fostering manufacturing growth.
Murthy also addressed the need for entrepreneurs to better assess market conditions and leverage simple mathematical models to enhance value. "Entrepreneurs need to learn to assess the market and estimate the possible size they can capture. They must be able to produce simple mathematical models to bring higher value leverage, vis-à-vis all other ideas in the market. This knowledge and talent are mandatory for success," he explained.
Looking ahead, Murthy expressed confidence in the resilience of human creativity against the rise of AI. "AI will not replace designers and individuals implementing large-scale application systems, simply because they are too complex. There will have to be huge data dictionaries, data programs, and interconnectivity between all. The creativity and power of the human mind are superior to this system," he asserted.