IT IS THE NATION’S good fortune that India’s policymakers have dumped every suggestion advising the country against foraying into large-scale manufacturing. That is the right thing to do in India’s long-term interest.

Some of the world’s best known economists, analysts and consulting firms have repeatedly advised against setting up world-scale manufacturing facilities citing the moves as anti-globalisation, pointing out that China’s manufacturing prowess can’t be challenged. Even the production-linked incentives (PLI) schemes met with cynicism with ‘India missed the bus long back’ arguments.

They are all being proven wrong and out of sync with new realities. After all, most of those arguments have been uni-dimensionally about pricing and rarely about geo-economic and strategic demands of a high-growth economy. They ignore the reality that importing the needs of a fast-growing nation with a massive consumption economy would have bankrupted the country and kept it perpetually forex decretive in addressing demand via imports.

Their assumptions being based on a peaceful and ideal world trade rather than war-torn geographies playing havoc with global supply chains. But most importantly, they are about a defeatist mindset that China can’t be beaten at its own game: Dump low priced goods to kill local manufacturing and then raise prices gradually to make super-normal gains.

But the global order is changing and so should strategies. The beauty of making in India is that the large local market and its scale prepares companies to make for the world. Here’s how it’s playing out. Despite being a small player in goods exports with under 2% global market share, India is now among the top five exporters in many products with up to 34% market share in some categories. And the number is rising.

India was among the world’s top five exporters in 169 categories selling goods worth $194.96 billion in 2014. In 2022 (the latest year for which global data is available), India is among the world’s top 5 exporters in 218 categories selling goods worth $261 billion. The country jumped from 11th to No. 1 in some precious and semi-precious stones; in aluminium (tubes, pipe fittings), from 35th to 5th and from 9th to 2nd in unwrought aluminium; in a few petroleum products, from 14th to 4th. Read Joe C. Mathew tracing this journey. Expect the trend to accelerate as India insists on the likes of Tesla to invest in manufacturing facilities in the country to access the local market.

Now, if India has to be self-reliant in manufacturing, self-reliance in software is imperative. Especially, software that will drive our future, such as AI. India is in search of homegrown AI, distinct from what may be offered by Microsoft-backed OpenAI, Google, Facebook or Amazon. Read V. Keshavdev’s account of the strides the country is making in the great race among organisations as influential as Reliance, Tata and Adani to create an indigenous AI.

To an extent, the global unrest that’s necessitating manufacturing is also what’s triggering a run on the yellow metal. Consumers always flock to buy gold as a safe haven in economic downturns or uncertainty. But they are not the ones responsible for 15 all-time highs for gold in just the first few months of 2024. Guess who is! Read Rajiv Ranjan Singh.

Also, enjoy the special package this issue: 40Under40. Those bright young leaders who are changing the course of business.

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