Opinion | A plan for us to create a globally competitive industrial sector4 min read . Updated: 12 Jul 2020, 08:02 PM IST
Five ideas that are not difficult to implement and can form part of a focused long-term strategy
Last week, I had written that India needs to work on a long-term economic plan to counter China, and that to be competitive in the world, we first need to create a free and competitive market inside India. To do this, among other things, we need to get rid of those utterly pointless regulations that hamper enterprise. We must build a single national market. We need a stable banking system and fine infrastructure.
These are all big asks. But here are some specific suggestions that could help build a globally competitive Indian industrial sector. This is a collaborative effort with my friend Chitta Baral, professor of computer science and engineering at Arizona State University.
One, our industrial production is significantly dependent on Chinese imports, from machinery to product components, but we don’t really know how much. Policymakers, businessmen and entrepreneurs need this information. This could be crowd-sourced in a specified format by a government portal. The material collected—product-wise details of cheap Chinese imports, their price comparison with domestic alternatives and tax disadvantages, if any, should be widely disseminated as a stock-taking step towards building a manufacturing competitor to China.
Two, India needs to create something like China’s Yiwu International Trade City, the world’s largest small commodities market. Tens of thousands of buyers from across the world (including India) flock to this 346-acre market to place bulk orders for an endless number of made-in-China products, from apparel and rugs to toys and staplers. About 65% of the world’s Christmas products—Santa dolls, Christmas trees, baubles—are bought at Yiwu.
Right now, Indian manufacturers cannot begin to think at such scale, but what stops India from setting up such a market or two—preferably in underdeveloped areas (till the 1980s, Yiwu was a poor rural county)—and invite, along with Indian firms, companies from Vietnam, Taiwan, South Korea, Japan and so on (not China) to exhibit their wares there? Indian firms that participate or visit can learn from them. We could stipulate that the foreign companies that take part must start manufacturing in India within a few years. This will greatly accelerate India’s manufacturing ability.
Three, China also has massive markets that sell almost anything one needs to build a factory—motors, switches, belt drives, and machines of all types that constitute a manufacturing process. India can do the same, and follow the same model as suggested above for Yiwu. But we currently don’t have too many companies that make machines, at least at scale. That brings us to step 4.
India has about 13,400 Industrial Training Institutes (ITI), 23 Indian Institutes of Technology (IITs) and 31 National Institutes of Technology (NITs). Associate IITs and NITs with nearby ITIs. Most of our IIT and NIT students are brilliant at theory and novel ideas, but few can build a physical machine. ITI students, though, have hands-on skillsets. As part of their programme, IIT and NIT students can be required to team up with their ITI peers to build new machines. This can be extended to other engineering colleges. India needs the ability to create innovative machines, not just buy from China, Germany, South Korea or Japan, and use them to produce things. Begin by reverse engineering and improving on the imported machines.
Five, drastically ramp up the number of CSE (Computer Science and Engineering) seats at IITs, NITs, Indian Institutes of Information Technology (IIITs) and leading private colleges. We are producing hordes of CSE graduates every year from hundreds of colleges, but most of them cannot even write code. It is essential for the Indian infotech industry to jump to the next level, and for that, it needs huge numbers of competent people. In 2019, IITs had 1,779 CSE and 421 dual degree computer science seats. In the US, about 2,300 undergraduate students at Massachusetts Institute of Technology (MIT) are majoring in CSE, and MIT is also setting up a new college for computing and artificial intelligence (AI). The University of Maryland has about 3,000 CSE undergraduate majors, and Arizona State University 3,500. Just these three US universities, all of them ranked higher than any IIT for CSE by Times Higher Education, equal the number of CSE students in our 23 IITs.
Without a strong computing and AI manpower pool, India is being left behind, and this needs urgent reversal. China has stated that it wants to be the world’s undisputed leader in AI by 2030. Within the next two or three years, India must at least quadruple the number of CSE seats in premier colleges, and allow students of any programme to take some core computer science courses. Or remain a laggard in the world economy for ever.
All these ideas, except the last, are straightforward to execute. The last one is a challenge, but can be overcome with technology. It is time to get out of the comfort zone of ivory-tower concepts like student-teacher ratio, and learn how to scale up from institutes abroad to fulfil the country’s needs.
We must have the imagination and will to work to a clear long-term plan. Like China did.
Sandipan Deb is a former editor of ‘Financial Express’, and founder-editor of ‘Open’ and ‘Swarajya’ magazines