We’ve never been able to develop ‘brand India’ for manufacturing: Pawan Goenka

India has never been able to develop a brand for itself when it comes to manufacturing and this has been one of the disablers when it comes to becoming atmanirbhar , or self-reliant, said Pawan Goenka, Chairman, CII Mission on Atmanirbhar Bharat, and MD ad CEO of Mahindra & Mahindra. He was speaking at the 18th edition of the Confederation of Indian Industry (CII) Manufacturing Summit 2020 held virtually on Tuesday.

“How many products get sold outside India... because they are made in India? Not one. The only reason they get sold is because they are lower cost,” said Goenka.

He pointed out that Korea is known for its value-for-money aspect, just as Germany is known for its engineering and China is known for being inexpensive. “What is the narrative that India has? For manufacturing, if India is to be known for something, what is it that it should be known for?”

Define India

Similar to other countries, India also needs to define what its manufacturing stands for and build its manufacturing brand on this basis, he stressed.

“We are not going to become a $1-trillion manufacturing economy simply based on the domestic market. The domestic market will take us somewhere, but we need to have exports. Our export market is right now a pittance... There is a resistance in buying from India, not because of cost, but because we have no manufacturing brand…” he explained.

Some of the other disablers standing in the way of India’s atmanirbhar manufacturing story includes the high factor cost such as that of land, power and capital, the cost of growing, the 8-10 per cent disadvantage of making anything in India when compared with China, the infrastructure efficiency, logistics cost and an “underdeveloped” MSME sector — as the MSME sector is the “backbone of the manufacturing industry,” he said.

Then there is also the factor of the ease of doing business in India, as well as the low investment in R&D and technology by the private sector. “Our private sector investment in R&D is only about 0.3 per cent of the GDP, whereas in a country like Korea, it is 2.5 per cent.”

However, he also pointed out the various advantages that India does have in terms of being atmanirbhar — like the large size of its domestic market and its manufacturing sector, raw material availability, high level of skill, unskilled people who can be skilled, and the low labour cost. “How many countries in the world can offer that?”

“When Tata launched the Nano, I felt very proud because that was an engineering marvel coming out of India. It is unfortunate that it didn’t succeed commercially. But it was an engineering marvel coming out of India, and whenever I went outside India, I talked about it as if I had done it. So that feeling has to come, and in a sense, if I could connect this to atmanirbhar Bharat, that’s what Atmanirbhar Bharat means — the starting point.

“If every company in India starts thinking that what is good for India is good for me, Atmanirbhar Bharat will happen. You don’t need anything (else). You just need to have that approach,” he emphasised.

Thinking long-term

India imports a lot because it’s cheaper to do so than to get it made in India, he said. “What if we took a view that I will not import, that I will develop the Indian ancillary industry even though it is going to cost me 2-3 per cent more in the beginning — but in the long run, that’s what is going to pay off.”

He concluded by saying that while the government needs to be a facilitator, the task of making India atmanirbhar is on the industry, not on the government. “My only request from the government is that we need speed. Whatever has to be done, let’s do it immediately.

“We have a window right now, if we let that window pass, it’s probably never going to come back again. The industry has to understand that we have a short window — of maybe 1-3 years; the government (also) has to understand that we have a short window, and we must do it,” he said.

There is a potential to develop sunrise industries such as electric vehicles, drones and CCTVs, he pointed out. “We cannot let the opportunity of these three slip out of our hands and go somewhere else. These are going to be big industries in 10 years. Somehow, the industry and the government must make a very strong partnership and it has to be almost like a mission mode project for India.”

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