twenty-five years ago, even 10 years ago, few of us had heard of
Information Technology. Today, exports from this industry are
worth $10 billion — that is, over Rs 45,000 crore a year. That
figure is 20 per cent of our total exports.
In spite of the
fact that each of the markets to which we supply IT software and
solutions has been in the trough of recession for years, IT
exports have grown by 26 per cent this year.
Infosys had not
even been born 25 years ago. Wipro was a company selling vegetable
oil. Indeed, other than the ‘‘Tata’’ in Tata Consultancy Services,
there is scarcely a name in the IT industry that was known then.
And guess what
the average age is in the industry? Just 26 and a half! These 26/
27-year-olds have changed the world’s perception of India. It’s
not just a country of snake-charmers, it’s a country against which
protectionist walls have to be erected. Of course, we can also
And not just, to
pluck a phrase of Malcolm Muggeridge, snakes in snakes’ clothing!
26-year-olds are changing India’s perception also of itself: that
India can; that, therefore, we should face the world with
That is the
situation in activity after activity. We lament the fact that,
while we are ahead in software, we have lost out to China in IT
hardware. That is true — as of the moment. We shooed away firms
like Motorola when they approached us in the early 1990s for
facilities to set up manufacturing operations in India. China
welcomed them, it wooed them, it created every conceivable
facility for hardware firms from Japan, of course, but also from
Taiwan, a country at which 400 of its missiles are aimed. It has
thereby leapt ahead.
But the game is
hardly over. That world-class hardware can be produced in India is
evident. How many of us would have heard of Moser-Baer? Located in
unprepossessing Noida, it is the world’s third largest optical
media manufacturer, and the lowest-cost producer of CD-Recorders.
Its exports are close to Rs 1,000 crore.
The firm sells
data-storage products to seven of the world’s top 10 CD-R
producers. And it produces them so efficiently that, to shield
themselves, European competitors had to file an anti-dumping case
to stop and penalise its exports to Europe. Moser-Baer fought on
its own. And won.
A firm most of us
have not heard of. A firm that is manufacturing products at the
cutting edge of technology. A firm exporting Rs 1,000 crore of
products that require the utmost precision and technological
sophistication. A firm that European firms fear.
important — the very international fora that our ideologues shout
are instruments of exploitation hold against European firms, and
in favour of this Indian firm.
There is more.
Moser-Baer has acquired Capco Luxembourg, a firm that owns 49 per
cent of a Netherlands-based CD-R distributor. And it has set up
Glyphics Media Inc. in the United States—for markets in North and
South America. And here we are being made to shiver at the thought
that foreign firms are about to swallow us!
Heard of Tandon
Electronics? Its exports of electronic hardware are close to Rs
At a moment’s
notice, my friends Amit Mitra of FICCI and Tarun Das of CII send
me particulars of firm after firm, in sector after sector, that
has broken new ground. A sample:
* Fifteen of the
world’s major automobile manufacturers are now obtaining
components from Indian firms.
* Just last year,
exports of auto-components were $375 million. This year they are
close to $1.5 billion. Estimates indicate they will reach $15
billion within six to seven years.
* Hero Honda is
now the largest manufacturer of motorcycles in the world—with an
output of 17 lakh motorcycles a year.
* One lakh Indica
cars of the Tatas are to be marketed in Europe by Rover, one of
the United Kingdom’s most prestigious auto-manufacturers under its
— that is, Rover’s — brand name.
* Bharat Forge
has the world’s largest single-location forging facility — of 1.2
lakh tonnes per annum. Its client list includes Toyota, Honda,
Volvo, Cummins, Daimler Chrysler. It has been chosen as a supplier
of small forging parts for Toyota’s global transmission parts’
sourcing hub in Bangalore.
* Asian Paints
has production facilities in 22 countries spread across five
continents. It has recently acquired Berger International, which
gives it access to 11 countries, and SCIB Chemical SAE in Egypt.
Asian Paints is the market leader in 11 of the 22 countries in
which it is present, including India.
* Hindustan Inks
has the world’s largest single stream, fully integrated ink plant,
of 1 lakh tonnes per annum capacity, at Vapi, Gujarat. It has a
manufacturing plant and a 100 per cent subsidiary in the US. It
has another 100 per cent subsidiary in Austria.
* For two years
running, General Motors has awarded Sundaram Clayton its ‘Best
Supplier Award’; the volumes it sources out of India are growing
* Ford has
presented the ‘Gold World Excellence Award’ to Cooper Tyres.
* Essel Propack
is the world’s largest laminated tube manufacturer. It has a
manufacturing presence in 11 countries including China, a global
manufacturing share of 25 per cent, and caters to all of P&G’s
laminated tube requirements in the US, and 40 per cent of
* Aston Martin,
one of the world’s most expensive car brands, has contracted
prototyping its latest luxury sports car to an India-based
designer. This would be the cheapest car to roll out of Aston
* Maruti has been
the preferred supplier of small cars under the Suzuki brand for
Europe. Suzuki has now decided to make India its manufacturing,
export and research hub outside Japan.
* Hyundai Motors
India is about to become the parent Hyundai Motors Corporation’s
global small car hub. In 2003, HMC will source 25,000 Santros from
HMI’s plant in India. By 2010 HMI is targeted to supply half a
million cars to HMC.
It was only in
1999 that HMI got its first outsourcing contract and already, in
2003, 20 per cent of its sales will be what it supplies as an
outsourcing hub. It is exporting cars to Indonesia, Algeria,
Morocco, Columbia, Nepal, Sri Lanka and Bangladesh.
* Ford India got
its first outsourcing contract in 2000. Within 3 years outsourcing
accounts for 35 per cent of its sales. Ford India supplies to
Mexico, Brazil and China. The parent Ford is sourcing close to $40
million worth of components from India, and plans to increase
these in the coming years.
Ford India is
already the sole manufacturing and supply base for Ikon cars and
components. These are being exported to Mexico, China and Africa.
Kirloskar Motors chose India over competitive destinations like
Philippines and China for setting up a new project to source
transmissions as this option proved more economical.
leading tractor maker, Renault, has chosen International Tractors
(ITL) as its sole global sourcing hub for 40 to 85 horsepower
Electronics India bagged its first outsourcing contract in
1998-99. So successful has it been that components and products
others have contracted from it already account for 50 per cent of
its total sales. It supplies to the parent, Tyco Europe.
* TISCO is today
the lowest cost producer of hot-rolled steel in the world.
* TVS Motor
Company has been awarded the coveted Deming Prize for Total
Quality Management. Many of the largest of organisations, even
American ones—like GE—have not managed that recognition yet!
pharmaceutical industry has come to be feared as much as its
infotech industry. It is already worth $ 6.5 billion and it has
been growing at 8-10 per cent a year. It’s the fourth largest
pharmaceutical industry in terms of volumes and 13th in value. Its
exports have crossed $2 billion, and have increased by 30 per cent
in the past five years. India is among the top five manufacturers
of bulk drugs.
Even more telling
is another figure. We are always being frightened, ‘‘Multinational
drug companies are about to takeover.’’ In 1971 the share of these
MNCs in the Indian market was 75 per cent. Today it’s 35 per cent!
feature we should bear in mind: India’s strengths are becoming
evident across the technology spectrum:
* We are among
the three countries in the world that have built supercomputers on
their own, the US and Japan being the other two: two months ago,
the fourth generation PARAM super-computer was inaugurated in
* We are among
six countries in the world that launch satellites. We launch some
of our own satellites of course; we have launched satellites for
others too, among them such countries as Germany and Belgium. We
have the largest set of remote sensing satellites. Our INSAT
system is also among the world’s largest domestic satellite
At the other end:
* India is one of
the world’s largest diamond cutting and polishing centres. CLSA
estimates nine of every 10 stones sold in the world pass through
* Trade of Indian
medicinal plants has crossed Rs 4,000 crore.
Here is proof
positive that liberalisation has indeed worked. ‘‘By opening the
economy before giving it a chance to become competitive, we have
thrown our industry to the wolves,’’ it used to be said. Quite the
contrary. The success in exports, in fields such as IT in which
competition is fierce, in which technological change is fast as
lightning, success in auto-components, in pharmaceuticals shows
that our industry has fought back, it has become competitive.
Remember all that
shouting about Chinese batteries a year ago? ‘‘Markets are closing
down, thousands are being thrown out of their meagre businesses,
factory after factory has shut down.’’ That was the shouting just
a few months ago.
Where are those
batteries from China? Yes, trade with China has grown—by 104% in
the past year. But according to figures of the Chinese Government,
in the first five months of 2003, India has amassed a surplus in
its trade with China, a surplus of close to half a billion
And China is just
an instance. Exports as a whole, and in the face of an unrelenting
recession in the West, have grown by 19 per cent in the year. In a
word, what committees upon committees with their piles of
recommendations would not have achieved, being actually exposed to
actual competition has.
exchange reserves are at an all-time high—$82 billion. We have
announced that we will not be taking aid from a string of
* We are giving
aid to 10 or 11 countries.
* We are pre-paying our debt.
*We have just ‘‘loaned’’ $300 million to the IMF!
How distant the
days when we used to wait anxiously for the announcement about
what the Aid India Club meeting in Paris had decided to give us.
But there is the
other side—equally telling. Why is it that so few among us know
even the elementary facts about these successes? Why is it that so
much of public, specifically political, discourse, when it is not
whining is just wailing?