India can be China-plus-one

Can be Made in India disrupt the global telecom market? Where we are, what is missing, and what needs to be done? The V&D panel finds out.

By Pratima Harigunani

The trade deficit is a serious issue for the industry as seen between 2014-15 and 2019. But our production has gone up in 2018-19. What was the real value-added in the country though? The demand for electronic hardware is significant – can we capitalise on this demand from our own market? How can government help beyond concepts like the production-linked incentive (PLI) scheme?

Dr. Rajkumar Upadhyay, Executive Director and Chairman, C-DOT asked these questions while initiating the discussion at the ;">technology session of the 20th Telecom Leadership Forum organised by Voice&Data.

“The power of software in India is well-known. Why should we prevent entrepreneurs from playing our core advantage of software to come on the global map?”

Dr. Rajkumar Upadhyay

Executive Director & Chairman, C-DOT

Taking the cue, Hari Om Rai, Chairman, and MD, Lava International shared his perspective on some myths. “Let’s take off the erroneous belief that we are a large market, we are still small in terms of the global GDP. In terms of numbers, we might be large but not in terms of the overall slice. We need to understand how the world is shaping up – like geopolitical shifts. It is a great opportunity to become the China+1 destination,” he said.

Highlighting what India needs to do, Rai stressed that the country needs to effectively utilize its skill-base, IT talent, and large market base. “China’s per capita income has grown in the last few years. We are not close; just 17% of their per capita income. What is the process of growth for the country? As you acquire skills at a lower per capita income, your output becomes competitive.”

Giving an example of component part manufacturing, he noted that India needs to identify what it can do but others cannot. “We have the power of human capital. Let us utilize it. Can we compete with Korea on the chip-side, which has a better capital or material advantage? At a nascent stage of the journey of growth, we should play what we have best. Let us also make sure that the ecosystem is very large. Building skills at scale is going to be the strength, and then we should build our strength in design, and development, etc. to grow the market.”

NK Goyal, Chairman Emeritus, TEMA, President, CMAI Association of India was also part of this panel. Other issues that emerged included the level of technical competence in the country, the appetite for entrepreneurship, economies of scale in mass-scale production, the importance of the free-market economy, government duty structures, inverted duty structures, and the level of R&D expenditure in India as compared to conglomerates like Huawei, as well as other areas of competitive advantage.

If we have the prowess in Defence in India, why not apply it to the telecom innovation, Dr. Upadhyay reasoned. “What is missing from the government side? What is missing on the private sector side? We have an opportunity. How can we leverage it well? We are on a path of economic growth. Once the pandemic is over, we will be back on a good recovery path.”

Rai explained how Huawei moved from manufacturing switches to what it is today. “China utilized the women-power and everyone in the manufacturing space. The focus was on creating globally competitive firms. That’s the process that each country has followed – be it China or Germany,” he said adding that building a company is like educating children.

“The number one responsibility is that of entrepreneurs. The government has very little exposure – they are not actually doing business in the world.”

Hari Om Rai

Chairman and MD, Lava International

“After protecting and supporting their companies, once they have built their companies, they started talking about an open economy. We started following the policies of developed countries in the 1990s. That’s not where we were. That was a mistake. Also, Huawei did not make any profits for over 30 years while the government supported it. We have wandered on the path of errors. Whether it is an individual, a family, a company, or a country it all boils down to skills. Unless we grow our skills, there is nothing possible. That is the only job now. That’s when we start a virtuous cycle.”

“Now 5G has arrived. We are well set with a 4G footprint and not one or two generations behind other countries. That’s a factor for India to tap well, especially with software and hardware becoming unbundled. They are not proprietary as earlier. The power of software in India is well-known. Why should we prevent our entrepreneurs from playing our core advantage of software to come on the global map?” Dr. Upadhyay contended.

“We need to work hard. We need to go to the core and that’s when we can move mountains. We are not going to change the country by thinking from the same level of consciousness. The number one responsibility is that of entrepreneurs. The government has very little exposure – they are not actually doing business in the world. The government is hungry to do the right thing, to change. This year’s budget showed that the government wants to build global champions. It shows its hunger to do more. The entrepreneur is either focusing only on one’s own company or lacks the skills to have a wide influence. The government and industry can collaborate and create new growth. 5G is just one step on this path,” Rai quipped.

“We are at a beginning stage of designing and manufacturing our own products. But we need companies that can build products and not just services. We should learn from other countries. They have taken skills from other regions that can bring skills for products. Governments of these countries have enabled that. Investing ahead of the curve is also important here. Now the Government of India is looking for champions. We need skills that can beat other competitors and can build large enterprises. We need that direction. The process of building a nation comes from the process of building companies. We need R&D capabilities and the creation of an ecosystem. I am sure it will happen in the time to come.”

On that hope, the industry keeps stepping forward.

feedbackvnd@cybermedia.co.in