Interview. ‘A bright future for Indian manufacturers’

Suresh Krishna , 82, Chairman of Sundram Fasteners, has seen the worst and the best of manufacturing in the country. He was a pioneer in embracing quality and exporting to markets abroad even during the stifling days of the Licence Raj. In a conversation with N Madhavan , he traced the evolution of manufacturing, seeing it through the prism of the auto sector – an industry he knows the best, and gives a sense of what the future holds. Excerpts:

During the period between 1960 and 1990, manufacturing was governed by the licence raj. I am a product of that era. Very little impetus was given for private industries. We were all small players. The world never imagined that India will become a big market one day.

Yes. Growth was very slow, just 3-4 percent – that too with lot of pulls and pushes from the government. Industry needed to export to accelerate growth, but the international customer base didn’t know India at all. Whatever little they knew of India was all negative. Second, the rupee was so artificially up-valued. It was ₹13 to the US dollar officially, at a time when the black market rate was ₹60. Some of us chose to explore the global market and exported at a loss. Then came liberalisation. And the floating of the Indian rupee gave a tremendous boost to exports.

It actually started with Maruti. It brought in higher quality standards. Suppliers had to work very hard in order to get into Maruti and stay there. But, once they’d gone up to that level, it became infectious.

When other global auto makers entered India post-liberalisation, they had a whole palette of components which they could get. They started telling their procurement counterparts back home that India could give them components of high quality at a much lower rate. So, from 3 per cent in 1975, export is today 35 per cent of my sales. It is not just me; the entire automotive industry has benefited.

No! Indian industry has upgraded itself phenomenally. For instance, in 2018, 17 plants of Sundram Fasteners got the Deming Prize simultaneously.

I see a very bright future. If the government treats the industry as a wealth/job creator, there is no limit. You will create jobs only by creating wealth. And industry creates wealth.

Automation is important where you have to maintain precise quality. But if you want to win on labour arbitrage (which is still significant) against other countries, we need people. Indian labour is very proficient. We are in for a rather very exciting 25 or 30 years in manufacturing.

COMMENT NOW