India must focus on building its own manufacturing base for household goods while simultaneously strengthening its industrial R&D, Sridhar Vembu, chief scientist at Zoho, said. In a social media post, Vembu stressed that India should take lessons from China’s phased approach to economic growth and adapt them to its own needs. "We must study China closely. There is a lot to learn from their experience which I categorise into two distinct phases," he wrote on X.
Explaining the two-phase approach, Vembu said the first step is for India to manufacture its own household goods instead of relying on imports. "At the entry level, India must make its own household goods (all the stuff we buy in local stores in small towns), and spread those small and mid-sized factories to every district of India. It is not that hard and it can work out cheaper to make and sell locally than to import from far away. To reach higher in the value chain, we need phase 2," he noted.
The second phase, he said, requires India to invest heavily in industrial R&D. "To scale the value chain, we need a strong strategic industrial R&D focus in essentially all areas of tech. China started with Phase 1 over 40 years ago and now has mastered Phase 2 in the past 10-15 years," he explained.
Vembu believes India can achieve this transformation despite shifting global market dynamics. "Even if global markets are not so favorable to export-driven growth anymore, India's domestic market can power our own growth and job creation. That is far more balanced growth anyway. Let's learn from China and adapt the ideas to India," he added.
His remarks were in response to Princeton researcher Kyle Chan, who shared an analysis of China’s evolving tech-industrial ecosystems. Vembu’s comments also sparked discussion, with user Ravikanth S asking if India should execute both phases sequentially or simultaneously. Vembu was firm in his response: "We have to do both phases simultaneously. India can do this. We need determined entrepreneurs who won't accept a can't be done mindset!"
The Zoho co-founder recently stepped down as CEO to focus entirely on deep R&D initiatives. In January, he announced: "It has been decided that it is best that I should focus full-time on R&D initiatives, along with pursuing my personal rural development mission. The future of our company entirely depends on how well we navigate the R&D challenge and I am looking forward to my new assignment with energy and vigor."