Industry leaders suggest how 'Make in India' can succeed

Taking a cue from Prime Minister Narendra Modi's 'Make in India' campaign, some of the top minds in India Inc sat down to lunch at the ITC Grand Central, in Mumbai, to discuss whether the government's aim to boost manufacturing in the country is too ambitious a target.

The panel discussion on the topic "Make in India : Ambitious or is it Realistic?" was moderated by Business Today Editor Prosenjit Datta and Managing Editor Josey Puliyenthuruthel.

The panel had an eclectic mix of CEOs from manufacturing and financial services companies who candidly talked about the practicality associated with the thought and the issues that likely plague its possibilities.

The 'Make in India' initiative is aimed at facilitating investment, fostering innovation, and building best-in-class manufacturing infrastructure in India. Kicking off the discussion, Anirudh Dhoot, Director at consumer electronics company Videocon, said it is indeed good news that a large number of MNCs have already put up their factories, but he pointed out problems related to taxation.

"There have to be some changes in the duty structure and if it is made simple then electronics goods will be made in India and there will be a lot of value addition," he said.

While Arup Chauhan, Executive Director, Parle Products, said he faces no problems in manufacturing in India, most others felt that one of the issues that plague large projects in India is related to labour.

VIP Industries' Chairman Dilip Piramal said that industry hasn't developed in India much due to anti-employment policies that are being followed for the past 30 years.

"Our labour policies are so protective of the workers that any industry, any unit having more than 100 workers cannot close down under any circumstances," he said. For Piramal, who outsources most of his manufacturing to China and is setting up a new facility in Bangladesh, it is hurtful to not be able to manufacture in India because of the policies.

According to Ranjit Shahani, Vice Chairman and Managing Director, Novartis India, there are various issues such as infrastructure, power and land reforms that one should look at.

"We need to see what policies need to change and how soon," he said. "It is not just made in India, but also invented in India that needs to be looked at," he added.

Niranjan Hiranandani, Managing Director, Hiranandani Constructions, talked about the dichotomy between massive unemployment and the availability of jobs. "I am for social security… but (it) could not be such that it could disincentivises the person from going to a job which is available."

Piramal of VIP expressed displeasure on why 90 per cent of Ganesh idols, and many other smaller products are imported. To which, Kalpana Morparia, CEO, JP Morgan India, said that one should not be embarrassed about imports but instead should import if any of the items is made affordable and cheaper for the masses.

Morparia said the country must focus on a few things such as the tax regimen in India to get strategic businesses to come and make in India.

"What every player wants to know, both foreign and domestic, is the sustainability… Make it simple, make it predictable so that every time they don't run to courts to figure out what they actually mean," she says.

Adding a different dimension to the conversation, Apurva Chandra, Principal Secretary, Industry, Government of Maharashtra, indicated that in his experience companies, at least initially, do not express labour as an issue per se.

He, however, added that laws are an issue, but not just with the central government, but state governments as well. "If worked on, it can make doing business very attractive for industrialists," he says.

Ridham Desai, MD, Morgan Stanley India, said there is excess capacity in most parts of the world, coupled with a worsening demographic, and a rapidly ageing population.

"China's manufacturing boom cannot be repeated in India. Not because India is not capable of delivering world-class manufacturing, but because the world is not capable of absorbing the supply that may come with the surge in capacity," he said, adding that India needs to focus on building capacity for itself. "I think Make in India is possible. Make in India, for India is more viable," he says.

The event was sponsored by Wave Group.