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· Make in India, but export to the world, says Amitabh Kant, head of NITI – is key to job creation
· Dedicated freight corridors opening end of 2018 will drive efficiencies in manufacturing
· Indian industry must create world-class brands by embracing technology and innovation
· Indian states have critical role to bring reforms in land and labour to drive manufacturing
· For more information about the India Economic Summit, visit http://wef.ch/ies16
New Delhi, India, 7 October 2016 – Indian manufacturers must think big and use the domestic market as a springboard for exports, said Amitabh Kant, Chief Executive Officer of NITI Aayog. He stressed that only manufacturing can deliver the jobs and growth that India so urgently needs to service the 250 million young people joining the job market in the next decade. “You can’t do job creation without manufacturing; you can’t do it on the back of services sector growth, which India’s been doing for years,” said Kant.
However, the world has changed, and global growth has slowed, noted Johan Aurik, Chairman of A.T. Kearney. The global market is volatile, agreed Baba Kalyani, Chairman of Bharat Forge. “The real challenge for us is how to substitute imports in India with Indian products,” he said – not least in defence manufacturing. For manufacturing to get anywhere near the government’s target of 25% GDP by 2025 will require a surge in infrastructure connectivity, reforms of land and labour laws, much greater investment in innovation and an energetic grasp of new technologies.
By the end of 2018, dedicated freight corridors between Delhi and Mumbai, and Chennai and Amritsar will propel efficiencies in manufacturing. But India lags behind in innovation and design. “Only 22% of the patents being registered in India have been done by Indian companies,” said Kant. And Indian tech firms need to bump up their investment in R&D, which accounts for only a small proportion of their revenues. Embracing new technologies such as robotics and artificial intelligence – which are having an enormous impact on manufacturing – is equally vital.
“It’s not an easy task,” said Aurik, because every part of the manufacturing system – including planning, designing, making and delivering – has to work well. If it can happen anywhere, it can happen in India, declared Sanjeev Sharma, Chief Executive Officer and Managing Director of ABB, India. “We have high-end software development connecting manufacturing processes; we have cutting-edge supply of R&D to global corporations. Put it together with the demographic dividend and we have a robust ecosystem,” he said.
To succeed on the global stage, India needs to create globally recognized brands. Would a person on a Chicago street be able to name a single Indian brand, other than yoga and spices? It will take the combined effort of industry and government to build brands that can be trusted, because the brand of a product follows the brand of the country.
Kant’s final rallying cry was to India’s state governments: “It’s important that states become champions of manufacturing – 12 states driving manufacturing in a big way, unleashing power by bringing in reforms on land and labour, will enable India to become a great manufacturing nation,” he said.
Notes to Editors:
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