Figures released this month indicate that India’s average economic growth rate was 7.5 per cent in 2015. India grew at a greater rate than China in 2015 as the International Monetary Fund had predicted it would.
Today, India is known for its pro-business administration and for its Prime Minister who is keen to bring leaders of great, developed economies into the fold.
It is a country acting like an established power on the world stage and so it should.
The openness to international collaboration is the measure of a great business nation and the groundwork has been laid with Finance Minister Arun Jaitley’s overhaul of foreign direct investment and annulment of retrospective taxes; but there is more to a modern business nation than services, which comprise 55 per cent of India’s GDP.
Analysts conversing at Davos said that we have to be ready to approach a fourth industrial revolution, ‘Industry 4.0.’
This is the age of advanced manufacturing, composite materials, quantum engineering, 3D printing and robotics – the new face of industries globally – and it is one that will disrupt established sectors, from transport to construction.
In India, PM Modi aims to harness foreign direct investment into Indian manufacturing through his ‘Make in India’ campaign, thereby increasing the sector’s contribution to Indian GDP from 16 to 25 per cent.
The question is whether the sector is capable of matching this global challenge.
Rapid developments in global manufacturing suggest that India’s manufacturing companies could easily fall behind their global counterparts. New technologies and patents are enormously beneficial, but patents from the U.S. and the UK outnumber new Indian technologies over ten to one.
The industries risk being trodden over by the stampede towards innovative new technologies.
India does not have the scale of higher education and vocational training that the U.S. and Britain enjoy despite its Institutes of Technology, alma mater of the Google CEO, Sundar Pichai. To achieve this scale, India should open up its higher education sector and allow foreign universities to open campuses there.
Does this mean that the next generation of economic capabilities in India will be foreign-owned or will Indians profit from Industry 4.0?
Looking at the influence that Tata Industries has had on the industrial landscape in Britain, it would appear that Indian firms are ready to wield enormous power in the technological innovation of the future.
Tata Steel and the Tata-owned Jaguar Land Rover have regenerated the manufacturing sector in the UK’s industrial heartlands of the Midlands and the North. They are key partners in innovation for British universities, building the bridge between the previous industrial era and the industries of tomorrow with advanced steels research and automotive innovation.
In Britain, Indian firms are our key research partners.
Indian manufacturers are without doubt capable of delivering large-scale orders and investing in the local supply chain’s R&D capabilities.
The greatest matter of urgency is developing the skills to support manufacturing growth. Policy makers must also focus on encouraging universities and industry to work together in the area of research and development in the way that is a matter of course here in the UK. For example, Jaguar Land Rover works closely with the University of Warwick’s Warwick Manufacturing Group and Rolls-Royce works closely with the University of Birmingham on advanced engineering research and development.
The world is captivated by the forthcoming developments in industrial techniques and if India’s leadership in this field continues, then its growth rates will be hard to compete with.
With manufacturing increasing in value across the globe, India’s economy is on track to surpass PM Modi’s target.
The author is Founder and Chairman, Cobra Beer and Member of Prime Minister of India’s Global Advisory Council
