Rajya Sabha MP and former Union minister Suresh Prabhu tells The Daily Guardian that India must be wellprepared to grab the opportunities coming out of the massive disruption caused by Covid-19. Excerpts:
Q. What do you see in the difficult time as the immediate opportunity that we should not miss?
A: An opportunity comes only when there is a disruption and hence, an opening comes only when there is something which was happening before is now about to change and it is changing for sure. One, in the context of the global supply chain. This is not just happening today but now the situation has changed so dramatically after Covid-19 that might happen sooner than later.
To take advantage of that, the Commerce Minister had set up a group and brought a lot of strategies to help India benefit from these disruptions that were likely to happen because of the global supply chain getting disturbed. They did sector-bysector analysis two years ago. We looked for opportunities in pharma, automobile, ago riculture and services. To align ourselves with the opportunities, we had to take domestic steps as well. We realised unless we work domestically, we cannot change it in global level.
Q: How do we break the cycle of the second supply chain?
A: First, we must be conscious about the fact that when we say we want to be a part of the supply chain, we either should be thinking of changing the entire chain from raw material to finished product to India or the second option will be to take part in such an element of the supply chain that leads us to competitive advantage. To put in action the first way we will have to be making everything in India starting from raw material.
Taking the example of pharmacy, we buy the bulk drugs needed to make formulations from China and others while we are specialising in formulations, we can also start selling them to the world. We must be the critical end of the supply chain where value addition is the maximum and to get the bigger pie, we must not just focus on make in India but also design in India.
Q: Should we be focusing on basic good production or focus on 3D printing or AI or do we do both?
A: We should do both but the time-frame is important. Either, we can do both immediately or start doing one by one and while we do all of it, we can focus on the complete chain. But we have got IPR issues where the product is designed by someone who makes the best of the deal. It is extremely important that we start owning the IP of the product completely in India.
To develop special IP in India, we need to pick up specific products in order to develop the entire ecosystem in India itself. We don’t realise our potential. We are really good in auto components and also in case of specialised designing, for example Godrej. They have been doing some of the precision manufacturing as they supply to ISRO, defence equipment, etc.
Q: We’ve faced a conundrum in the past. If we say we want to produce here, then some of our production in terms of aircraft have taken 30-40 years. Then the buyer says we need new equipment easily. Is the private sector involvement in competition the solution to this problem?
A: The next round of industrial revolution, the 4th industrial revolution, is bound to be given by huge technological input. The shortfall of the manufacturing of the world is going to change dramatically. Entire operations will be automated, will be monitored remotely by high technology. So, I think private sector involvement is inevitable because technology isn’t the forte of the government. They’re very good at organising—they have CSIR, which is producing good products, we have government-controlled labs. The point is the commercialisation of that research.
Q: Are you seeing it happening, sir? Is the private sector engagement happening?
A: Yes, it is happening, thanks to Prime Minister Narendra Modi, who is personally very keen on indigenising our production capabilities. We are the largest importer of defence equipment in the world, we have to ensure our defence capabilities are upgraded in a way that doesn’t help the economies of other countries by buying armaments from there. We have to select specialised companies who have the ability and a very good track record. For eg., Godrej has been there for more than a century.
Q: We’ve had a problem in the past—the tendering process which goes on and on. MyGov is holding a competition for a new video-conferencing app. The best company gets a grant from the government and a government contract. The other issue is that when we’re processing from our companies, we are waiting for the government to have a need. Can we flip this around? Can private companies approach the government and tell them that we have this idea, let’s figure out how to use it?
A: First, you must accept that we have a challenge in terms of procurement. The procurement system is broken. We need to ensure that first, for any success of a design like this, it has to be completely transparent. If it isn’t transparent it can never be sustainable, it can be abused easily. Secondly, you must have a good criterion for selecting the vendor.
Companies like Godrej, Tata, Mahindra are really good and they deliver properly. Countries like the US have a fantastic ecosystem. When their Defence Ministry, the Pentagon, needs to order something, it happens within two weeks. A company can approach the US government and tell them what can be done. Now, that company will also not share their idea with anyone else. Subsequently, if it is found that the company in question plagiarised the idea off someone else, then there are penal provisions.
Q: Take 5G, for example. We don’t have indigenous tech, it will take years to develop, which creates a huge conundrum for us. So how do we encourage indigenisation of that?
A: We can’t do everything together at 100% intensity at the same time. The entire value chain cannot be carried out simultaneously. We have to take that part of the chain which is good. 5G is a good example. We don’t have the tech for sure. We have to decide the best form of leveraging the technology but find out and start preparing for 6G now. If you do that, we will actually take a jump from where we are starting today.
There was a time when products that were made in Japan were deemed inferior, but today they’re accepted as the best quality products. Why is that? Japan also started with no advanced manufacturing, they also sourced technology from wherever possible. What they did well was develop their own IP capabilities very well. What we have to do well simultaneously is carry out a parallel exercise to invest enough into integral applications —say industrial applications. CSIR should take a lead on that. Second, upgrading our educational institutions. You can never develop IPR in India unless your educational institutions are upgraded to that level.
Q: What is the focus area? You mentioned IPR several times. So, we need to plan for the next 10 years now—for 6G, for the next global internet systems. What areas do you see for us to jump onto the bandwagon quickly so that we are futureproof?
A: We should try to take whatever comes our way. Manufacture indigenously where we can, that gives us experience and knowledge and gives us the potential to upgrade later. It will create opportunities for Indian business and Indian manufacturing to understand the business so that they can upgrade from there. I’ll give you an example. When Suzuki came to India to acquire the nailing Maruti, they tied up with Indian manufacturing companies as partners. So that gave Indian companies the ability to upgrade. IPR is a long-term issue, let us not focus on that right now. Seize what is available for now.