Image courtesy – jhumritelaiyacity.com
I am fed up by this “Make in India/Made in India/ X in India” brouhaha. It’s nonsense. Its proponents seem to be living in medieval world, trying to preach Stone Age concepts.
First my favorite question:
WHY is Make in India important? Is it to attract capital investments? Is it to generate employment? Is it to help balance or payments? Is it all of the above?
Each WHY has a unique treatment. But first, let’s start with the basics:
Consumers don’t care
I have been using an iPhone for the past 5 years and I’m really not bothered about where it is made. It could have been made in Jhumri Telaiya for all I care (The place really exists).
Let me ask you – did you NOT buy your Nike or Adidas or Reebok because they were made in a country that you did not approve of? Oh, or do you wear only Kolhapuri Chappals to work and conferences because they are “Made in India”?
For the record – the past 7 pairs of Nike shoes I have worn (over 20 years), have been made across 7 different countries.
I am writing this article on a MacBook Air. I have no clue (or interest) in where it is made. The same goes for my Levis Jeans, Gap T-Shirts & Tommy Hilfiger Shirts.
Consumers ONLY care about Brands. As an article in the Financial Times (FT) revealed a few years ago, “Brands are the new Gods”. Brands fulfill consumers’ aspirations. Where they are made is not important.
Business does care!
Doing business in a country matters. The fact that China has become the world’s backyard for manufacturing all things has immensely helped that Country’s GDP and growth.
So how did China achieve this?
First let’s examine Japan:
If you have really old grandparents, ask them what “Made in Japan” meant just after World War II. They will tell you that it meant ‘junk’. Japan had one of the world’s worst reputations of producing things. Today, we absolutely love things Japanese (made in Japan or not).
How did Japan achieve this amazing transformation?
It worked on its processes, its manufacturing practices, its people’s skill sets, etc. I don’t want to dive into the business of Kaizen and all things that are legendary about Japan. Did Japan go out and play the tabla to “Make in Japan”? No. They did not. They quietly transformed THEMSELVES, made products that delighted the world (Walkman, Sony TVs) and lo and behold, Japan became the Gold Standard of “Make in/Made in.”
China’s approach was different. It used its brute labour force and almost hard Nazi like Government rules to force discipline and competiveness. If Nike and iPhone often get reprimanded for ‘Labour Abuse’ in their contractor factories, you can imagine what the other lesser known brands must be doing. I recently read a report of an electronics assembly factory in China that employed young girls for their perfect eyesight – the girls were fed food, made to stay in very cramped dormitories and given sub optimal wages. The day they developed a “number” (eyesight defect), they were kicked out of their jobs.
So, what’s the point?
China, Japan and all other industrialised nations leveraged their inner strengths and proved themselves in the world by their goods, services, costs. Then the world came rushing in.
If we have such an ambition for India, then let’s actually work on a manufactured, globally relevant and scaled product and invite companies in that DOMAIN to come rushing in. What is that one product we manufacture in the world better than anybody else? Can someone tell me?
For a moment, consider countries that approached the problem alternatively.
Do you know that more tourists visit the Louvre Museum in a year that the number of tourists that COME TO INDIA??!!
Isn’t the Taj Mahal “Made in India”? Don’t you personally think it’s more attractive than the artificially made Eiffel Tower? Then why does this “Wonder of the World” not receive any traction of tourists that would do justice to its beauty?
There is a yet another level of leverage of “Made in X”.
Consider the Middle East. They own oil. It’s their inheritance. So, while most of the Arab Countries have happily let the Global Oil Majors come and exploit their natural reserves (one can safely say ‘Crude Oil in Barrels’ is made in the ME), a country like Dubai goes beyond that.
Dubai allows hassle-free imports and exports, zero income tax and an environment of trade and commerce that is unparalled in the world other than, probably Singapore. What does Dubai offer? A “Make your Business Life EASY in Dubai” proposition.
We own amazing heritage and legacy in terms of what drives tourists crazy. Why don’t we make that a business 100x bigger than software? Or is it NOT SEXY to say, “I am here to promote that Jaisalmer Fort. It’s prettier than a silly shipwreck-turned-museum in Stockholm and you should come to India to see it?”
Back to India.
Rather than going out and spraying and praying, we should first introspect.
Big Mighty and Professional Ratan Tata could not set up his Nano factory in Bengal (‘Kicked out of Bengal’ is the tagline) so we should be really cautious about making promises that we cannot keep to the outside world.
Software in the early ‘80s was Body Shopping. That was “Made by an Indian”. As Infy and the rest began to scale, we created humungous success in keeping people at home and writing software. That is “Make in India”. Now, we have software as products, services companies like Cognizant that get paid in ROI of their clients, etc and the Internet Mobile boom. This is really the “Created by an Indian” theme.
In all his flying trips, did NaMo promote Tourism? Did he tell Facebook to have their next Townhall in Jaipur? Why can’t Sundar Pichai come and do his next All Hands Google Meet in Mahabalipuram? Why are we ignoring the “EXISTS in India” theme?
Finally, it’s about the mind. It’s about “Thought in India”. We have to change the way we think and that is only by exposure. NaMo must NOT take selfie-junkies with him on his next trip abroad – he must take the 3rd and 4th tier of Babus and Govt. officials to really SEE what the world outside is up to. Sometimes it’s just the exposure that matters.
A colleague told me that in a small town near London, the local Municipality was very upset that the flowers laid out in the Town Square were all similar colours and that was not delightful enough for its town residents. They promised to plant new flowers the next season. How I wish someone from the BMC in Mumbai could be taken to this town. That is the job of our politicians and bureaucrats.
The world is super-competitive and super-efficient today. Let’s not say silly things that sound like 3rd world brand taglines. Instead, let’s laser target what we do well (or own) and sell that like never before.
Here is a simple live chart of other countries and their business success that would be worthwhile to study to make our Indian Dream come true:
This LIVE Chart has people contributing to it as you read. Can you please comment on the article and also add your ideas to the chart?
*****
Ajay Shah
I like your article because of the coverage on India’s strengths. Modi’s investment pitch makes me think of fishing for China’s investors. With a wealth of in house talent, why isn’t Facebook asking us to work on artificial intelligence project?
Anil Rajan
Modi is trying his best. India if it need to change it need a mass movement. There are lot of people in India who want to do things properly but we are not able to like we want to drive properly, we don’t want to bribe, we don’t want potholes. We don’t want our children to compete against each other for mark instead let them compete with the world.
I am not saying everything is right but atleast we see someone is trying, why can’t we just be patient and help him. After all which PM or CM is setting such an ambitious goals. Don’t we think he could also enjoy 5 years doing nothing and leave as if nothing is wrong with the country.
I am from Kerala and i see the pathetic govt of cong and cpm change guard every 5 year, just doing nothing. More than half of Kerala lives life outside kerala and that is the only reason Kerala is alive and most of the people never want to come back too. If jobs are created in our country its such a great to be able to live with our aging parents.
Ashish Sethiya
Hello Alok,
A sharp article indeed. I can’t agree more about tourism you spoke about – in fact I think India is perhaps the only country which has all possible varieties of tourism possible – to mention some
And the BAAP of all – we are so so cost effective as compared to other countries. Try comparing the cost of Skiing Holiday in Gulmarg with that in Swiss or French Alps – Even for Swiss or French Nationals.
I think tourism in India is waiting for it’s software moment. Infact I think tourism can be for India what OIL is for gulf countries
Now after getting it off my chest with regards to Indian Tourism Potential, let me put my thoughts on Make in India campaign. By the way Government’s Make in India website does mention Tourism as of the sectors amongst 25 sectors mentioned under Make in India.
I think campaigns like in Make in India are important from following perspectives –
Therefore I will end my response saying if Make in India is just a rhetoric, hell with it – I will not favor empty nationalistic tone over economic prudence, but if it’s intended towards employability, competitiveness and it actually materializes I think it’s a great campaign. As it has the potential of taking millions out of poverty and raise the economic stature of India.
Thanks
Ashish
Vedhas Deshpande
Yes, Mark Zuckerberg will be having a town hall in new delhi! Jeff Bezos from Amazon did visit India!… just saying we are not ignoring EXISTS in India theme…! Other than that good challenging article, especially the point about tourism!
Ashish Sethiya
An article on Make In India by the person in charge of it on https://www.moneylife.in/article/citizens-can-play-a-defining-role-in-make-in-india-effort/43305.html
Anthony Fernandes
Very true. I agree.
To add.
why will anyone manufacture in india for 12rs if they can manufacture somewhere else for 8rs.
Amit Shroff
Really nice article Alok! Yes I totally agree you build examples, you focus on your core. Once people start seeing development they would follow.
There is no support by government to Indian startup, no infrastructure, no rental policies, nothing. Additionally, what you would notice is just tax liabilities and rules.
I had a friend who was staying in Dubai, he said Dubai had such a wonderful rental policy. The landlord cannot ask him to move out because he is being offered 50% extra rent by a new tenant. Additionally if the lease expire, he is given the first preference over the new tenant. But in India, we don’t have such option, the problem is with startup and MNC both. I heard from my client Competent Automobiles that they had rented a showroom in Dwarka, but now after the lease is expired the landlord wish to increase the rent by 50% to 50% else they have to vacate the place. Since now the landlord know that it would not be difficult for him to get a new tenant, as it was rented by a Competent Automobiles earlier.
The government should work towards make life easy to do business, setup business and windup (required). I heard in china you can close a business within 48 to 72 hours. They should work towards Policies on Rent, Tax, Business Setup, Duties, Infrastructure, etc.
Mamta kicked off TATA from Bengal, now who would like to invest in Bengal and why? Who would trust her and why? Just because if some other government comes after the next election, they can kick him off.
The money that is being spend on trips and advertisement should have been spend on setting up the platform for doing business in India.
Being an Indian, what support does I have from state or central government to support my startup NIL, government is pending crores in making shit website which are not attractive and user friendly. But we cannot work for government, why, because we are not eligible. The criteria that are usually set like turnover, exp with government, min no of staff etc etc.
So before you want people to help you, YOU NEED TO HELP YOUR OWN PEOPLE. MAKE THEIR LIFE A BETTER LIFE.
Philip G Thomas
Examining the things that detract from India’s strengths, perhaps the first and foremost is the traffic.
You step out of your home or hotel room, and you wonder how on earth you can do business in a place which has such scant respect for your safety and time – so obviously displayed.
Take it or leave it, seems to be the Indian attitude to the chaos on Indian roads.
Most Indians returning to India after a spell overseas are unwilling to risk their necks driving on the roads here, and seek to rent the largest vehicle short of a Patton tank to negotiate the traffic.
In the US, the only things the government is serious about are 1. Traffic and 2. Taxes.
Enforce these two and suddenly the bad guys are weeded out and the playing field is level (or more level, perhaps).
No Indian city has a plan to manage traffic accidents that result from the chaos.
Today’s news says one person dies every minute in India from a traffic accident. And this is prime human resource.
Maybe we should fix these things first before we say “Make in India”. Because what happens much more commonly is “break in India”, and it’s most visible on the road