“China’s Loss Should Become India’s Gain”
Given current conversations, especially after the geo-political conflict with China, what are your thoughts on how soon will ‘Make in India’ and being self-reliant be closer to a reality?
I have always been a big supporter of Make in India and the Raymond Group has always made investments within India. I should say this with all transparency that as a group, we have the option to invest anywhere in the world, including China. When we make an investment decision in India, it is after evaluating China. Because we find it is more cost-competitive to make in India. In the current scenario, we must further promote the concept of ‘Be Indian, Buy Indian’.
Every country has its concerns. Many are closing borders and thinking with an internal focus. While we are not allowing travel and tourism, India has 1.3 billion people. If each one helps one, and each spends one dollar, we can spend a lot of money. We can kickstart the economy because we are in a favourable position, where we can do the manufacturing. We already have the consumption base. Many countries do not have this advantage. In the UK recently, there were calls like please go and eat out in a restaurant and support a restaurant. Consumers are supporting their own economy.
Also, there is pent-up demand in India already and the moment we see operations resuming, we will see people spending – take the example of the massive influx of tourism within Goa as hotels opened up. Incidents such as these will grease the wheels of the economy.
The textile industry in India was long affected by imports from China of goods that were considered cheaper, substandard even. Is this changing now?
Apart from cheap and substandard products that come from China, there was wrong declaration of goods as well. They would write international brand names on the fabric and export it to India. They would say this is cashmere while it was polyester. Essentially, this is dumping, and it needs to be stopped.
We understand that in India, one would rather pay 2-5 per cent more for a product but support their own country than worry about imports. Arguably, even if we stopped import of every product, unless it is essential, for the next one year, India will come out stronger. With a ‘Be Indian, Buy Indian’ mindset, we can emerge from the economic situation we are in much faster than any other country. But we must open up and get the economy started.
How do we get companies moving out of China to set up base in India?
Eventually, it is about policies that are set. Sitting in London or New York, the world is your oyster. You look at where to get the best returns from, which boils down to the ease of doing business. The current situation where businesses and companies are finding alternatives to China is really a once-in-a-lifetime opportunity. The government needs to really gauge whether India is getting enough of the pie that is coming out of China. It should set its own target. We should ask ourselves what is stopping us from getting 90 per cent of this pie when we have such a big thrust on Make-in-India. Right now, what is China’s loss should become India’s gain.
Do you see the ease of doing business in India changing for it to become a global hub in manufacturing?
Ease of doing business has many criteria. If you look at the scorecard, it is not only one item that will make someone invest. And ‘ease’ is the operating word here. It translates into everything you have to do — whether you have to get permission, dealing with labour, infrastructure, how to get a ship to export on time, the size of the domestic market — there are many such aspects that go into ease of doing business. So far, companies have seen, and have decided that China is easier to do business in. That is why the investment went there. A change has to come at that level for India to grow and build itself.
What about at the consumer level? Do you think consumers will shell out more money to buy Indian?
The first question is why should it be more expensive to make in India? If China can make it at a certain cost, why can companies in India not make it at that or lesser cost? If the government is subsidising the Chinese product, then that is an unfair trade practice. We need to break the product up, part by part, to fully understand where the cost difference is. I am sure if a company asks five or 10 per cent more for an Indian product, consumers will understand. But if the ask is 50 per cent more, then no one will understand.
This article was first published in the print issue of (10 July - 25 July) BW Businessworld. Click Here to Subscribe to BW Businessworld magazine.
