The Confederation of Indian Industry (CII) annual business summit 2024 held in Delhi from 17 to 18 May, gathered industry leaders and policymakers to discuss India’s burgeoning opportunities across various sectors. Key takeaways highlighted the nation’s strides in financial services, manufacturing, technology, and more while emphasising the need for strategic investment and innovative solutions to drive future growth.
The primary takeaways from the CII Annual Business Summit 2024 are significant. The Finance Minister identified a USD 390 billion opportunity in the financial services sector, prompting the critical question of whether India is prepared to seize it. Capgemini’s latest report positions India as the top investment destination, with China’s dependence reducing substantially. Of the 760 executives interviewed, 75 per cent expressed a desire to invest in India, raising the question of whether Invest India is ready for this influx. In the telecom sector, 60 per cent import substitution has been achieved, with the cellphone sector expected to reach 99 per cent self-sufficiency by 2024. Additionally, India hosts 50 per cent of the world’s Global Capability Centres in the services sector, underscoring the need for private sector involvement to meet these ambitious targets.
ITC’s CEO emphasised the social responsibility of businesses in contributing to societal growth and advocated leveraging new-age technologies to enhance manufacturing efficiency and effectiveness. In the session on new-age technologies, Vijay Kumar Saraswat of Niti Aayog highlighted India’s status as the third largest destination for startups and the third largest country globally in terms of PhDs and paper publications.
The highlights stated that the blue economy provides enormous opportunities for fish, oil and minerals in the Indian Ocean, including research and technological innovation and hence the deep ocean mission has been formulated by the government. Its timelines for implementation must be made clear & monitored quarterly.
The Indian Ocean is a strategic location for enhancing global trade and easy connectivity. The space sector opened up for private participation to harness space technology, for the welfare of society and for achieving a leading position. Proper demand estimation studies are needed to capitalise on utilising Isro’s full potential.
The Digital Infrastructure of Knowledge Sharing (Diksha) offers 21,000 courses in 31 Indian languages, containing content to the tune of two lakh pages, from nearly 12,000 contributors across 60 educational boards of the country.
Under the Ministry of Education, Diksha has a spatial reach of nearly 180 million students and seven million teachers. It claims to have completed 141 million courses so far. A regular audit of its efficacy is imperative to ensure its quality is maintained.
India is engaging with Germany, the EU and other countries in mega science projects for the advancement of scientific knowledge. In six large projects, cooperation is advancing at a satisfactory pace. Performing yearly cost-benefit analyses of such projects increases their chances of success.
With 50 per cent of the population being under the age of 25, the Department of Biotechnology (DBT) has supported nine Bio-tech Parks and 60 Bio-Incubators in the life science clusters, across the country. Its full utilisation needs to be explored by the DBT.
India has also allowed for 100 per cent FDI under the automatic route, for greenfield projects in the pharmaceutical sector and manufacturing of medical devices. Significant R&D investment is required from the private sector and needs to be reviewed by DPIIT every month.
Technology strategies are also required for the environment. These include efficient utilisation of local coal availability, reducing carbon emissions in the industrial and energy sectors and promoting natural and hydrogen gas as clean fuel opportunities. Additionally, the use of methanol, ethanol and ammonia as alternative fuels for clean combustion, small modular nuclear reactors to curtail emissions and encouragement for EVs and charging stations are essential. Finally, tapping into wind, solar, ocean, biomass and other technologies to maximise renewable energy in our overall power supply is crucial. Who will be responsible for monitoring all of this is the million-dollar question.
Digital payments through UPI have shown the highest growth, with the total value of transactions touching Rs 20 lakh crores by April 2024. Will cash in circulation now reduce substantially, now that the elections are over?
India achieved a staggering figure of delivering 2.15 billion vaccines in two years through the Co-Win platform. Further, national tele-medicine through e-Sanjeevini, had 243 million people covered and 33 crore health records created under Ayushman Bharat. These figures are exemplary but if any quality-related issues come up, it will lead to a sharp decline.
The 20 technology trends that will elucidate the nature of decadal growth in India are commendable, requiring commensurate support from the government. These trends include AI and machine learning, wearables and augmented reality, intelligent spaces and smart places, cloud edge computing, digital twins and voice interface. Additionally, they encompass robots and cobots, 5G, the Internet of Things, drones and UAVs, quantum computing and mass personalisation. Other notable trends are nanotechnology, big data and augmented analytics, blockchain, digitally extended realities, facial recognition technology, autonomous vehicles, genomics, digital platforms, cybersecurity and 3D, 4D printing and additive manufacturing.
Vrinda Kapoor, Co-founder and CEO of 3rdiTech, wondered why India has remained a software-dominant country and ventured into embedded software only since 2020, leaving India 20 years behind in hardware innovation. We have to catch up here and usher in a technological renaissance. Geopolitics today will not allow us the freedom to import hardware freely. Countries like USA have invested billions of dollars in making chips, incentivising the domestic industry and India needs to create urgent value addition through investment in semiconductors. Her punchline was that we need a mindset for India from India.
Milind Pimprikar, Chairman of CANEUS International, dwelt upon the Bio/Nano/Info triangle. "Davos of new technology" was his punchline. IPR and funding issues need to be resolved in the country quickly if we are to reap the benefits of the new technological age.
Ashmita Sethi, President and Country Head of Pratt and Whitney extolled the huge engineering capability and digital training centers created that cater to 60 airlines. There is a need for highly fuel-efficient marvels in aerodynamics. AI has huge potential for creating digital twins in engine manufacturing and requisite capabilities need to be built timely.
Ipsita Dasgupta, Senior VP and Managing Director of HP India focused on skilling, since only 19 per cent of PC penetration has happened in India and the rest is yet to be achieved. AI-enabled PC is the future for India, as it can help make MSMEs more productive and enable personalised education and skilling.
S Jaishankar held sway in another plenary session, remarking on the enormous strides made by India in all spheres and the need to convert challenges into opportunities. The concept of Vasudev Kutumbakam creates India’s image as a Vishwa Bandhu. The private sector needs a relook at globalisation by finding new players, shorter supply chains and new payment mechanisms. The world was rebuilding itself and new logistics corridors and reengineering of logistics are reshaping the map of the world.
Hence, there is an enormous role of Chahabhar Port, the India-Middle East corridor which takes us to the Atlantic, the route through Myanmar which takes us to the Pacific and finally, the journey from Chennai to Vladivostok, which will again take us to the Pacific. MEA supports NRIs, enabling ease of travelling abroad and facilitating India becoming a global hub of innovation and research.
His punchline was "Make in India, Invest in India, Procure in India, Design in India, Research in India", for which credit lines and grants are necessary. Branding is important and all Indian embassies need to extend full support to achieve the objective of Amrit Kaal and Viksit Bharat.
At the AI standalone session, Memani, VP of CII, announced that India was the largest consumer and producer of data and that STEM talent needs to be created fast. The ecosystem around AI is developing swiftly and many companies are now using AI, including more than two-thirds of the top 50 unicorns. Investment in AI startups has gone up to USD 100 million in 2023-24 and the big issues now are of data privacy, data sovereignty, data access and its cost. These need to be addressed squarely by the government.
Bhasker, Director of IIMA, stated that customisation is possible through AI and the toughest jobs can be assigned to the robots.
S Krishnan, Secretary, MeitY, spoke about the transformational possibilities of AI, with the government allocating Rs 10,500 crore to create adequate capacity, partnering with the private sector. The need for data availability to develop appropriate use cases is important. Safe and trusted AI is the need of the hour and hence its regulation is imperative without tampering with innovation. AI has maximum use in all government institutions, which need to create use cases for efficiency and effectiveness in their operations. MEITY has a job cut out for the widespread adoption of AI.
Tejpreet Singh Chopra, Founder and CEO of BLP Group, is a hands-on AI expert, having used AI in a large number of applications in the wind energy sector to predict failures, as well as for cranes at ports and in the chemical and steel industry for timely maintenance issues. According to him, generative AI has a market of USD 40 billion, with a potential to reach USD 1.3 trillion by 2030. India can lead and apply AI in the sectors of health, finance, transport, banking and education.
Vinayak Dalmia, Co-Founder and Managing Director of 3rditech, was critical of the hype around AI, suggesting that media was gobbling up 70 per cent of the AI spent today. Hence, it is important that we move towards Artificial General Intelligence (AGI) rather than restrict ourselves to AI alone.
Co-creating the future responsibly was a session chaired by Dr V Anantha Nageswaran, CEA. He listed the challenges in the areas of mental health, preparing youth for AI, enhancement of agricultural productivity and issues relating to fragmentation of land holdings. Global trade was dropping, trade restrictions were increasing, leading to deglobalisation. Financial stability worldwide was at risk, as US interest payments were mounting and the dollar was losing its sheen as the global reserve currency. China was showing its hegemonistic fangs by leading global manufacturing and contributing nearly 35 per cent to world GDP. Two per cent of all industrial inputs come from China, as do all critical minerals for energy transition. Hence, it is imperative to develop alternate sources of such important minerals. His punchline was that "geopolitics has taken over geoeconomics".
The private sector has to carefully introspect on issues like food and its nutritional value, substandard pharma production which has created a trust deficit for India, decline in human values as intellectual capacity enhances, resulting in deepfakes and doubts about the social responsibilities of innovation. The private sector has to co-create the future by using CSR funds judiciously, investing in the quality of goods, responsible R&D and restorative health.
Sanjiv Bajaj, CMD of Bajaj Finserv, was keen on the disinvestment plans of the government. Nadir Godrej, CMD of Godrej Industries, found labour laws in India obstructive, real unemployment high, long-term thinking missing and Bangladesh beating India in exports of garments, etc. All such issues are a clarion call to the government to act swiftly.
T. V. Narendran, CMD of Tata Steel, was aggrieved that China was causing inflation and hence energy efficiency and productivity enhancement are imperative to compete in today’s world. Suneeta Reddy, MD of Apollo Hospitals, observed that we need to co-create genomics and AI integration to provide good preventive healthcare. Investment in R&D in India was just 0.7 per cent of GDP and this needs to expand, especially in the health sector, where the bulk of the investment is coming from the government.
In the session on Mapping India’s ascent in the Realignment of GVCs, Dr V Anantha Nageswaran raised the issue of how the private sector sees current developments and what changes they expect.
Guruprasad Mudlapur, MD of Bosch, wanted India to expand its exports substantially. Geopolitics was affecting logistics and chip wars have started. New technologies in the auto sector require the creation of new software, for which skilling and funding are both required in large measure.
Sunil Mathur, MD of Siemens, found that GVC was changing and sustainability was becoming very important. India needs to work on ease of doing business and move towards technology-driven manufacturing. Siemens has expanded its factory strength from 20 in 2015 to 32 in 2024, achieving 20 per cent exports. Large-scale digitisation is the answer to further increase in productivity. India has to resolve the land-labour challenge and tax reliability issues and grant quick approvals for businesses to expand.
Deepak Shetty, MD of JCB India, has India as its largest market out of 155 countries and hence exports to 130 countries from India. India is the 3rd largest player in the construction and equipment sector, after North America and China. MSME partners in India have achieved the distinction of providing components to 11 of their factories abroad and hence 96 per cent of the value chain is located in India for JCB. This is heartening, but how far it expands exports remains to be seen!
Banmali Agrawala, President of Infrastructure, Defense and Aerospace, Tata Sons, experienced Tata’s new businesses showing great prosperity like electronics, EVs, batteries, animation, etc. China Plus One gives a massive opportunity to India to promote its share of manufacturing. India needs to be bold and look at scale to cater to the standards of global markets. It has to be competitive in productivity, with a thinking and disciplined workforce. India can contribute significantly to an efficient GVC, global quality standards are met, sustained innovation continues, basic education and skills are imparted to the labour force and systems are regularly reformed to inject ease of doing business in every sector of the economy. DPIIT has to act soon on some of these issues.
I asked a question to the esteemed panel: Why did the total value of exports of goods and services remain stagnant at USD 766 billion between 2022-23 and 2023-24? What is the feasible rate of growth that can take us to the targeted figure of USD two trillion by 2030? There was no answer. The Managing Director of Tata Sons reiterated the huge potential that stared India in the face. But a 2.5-fold expansion in our merchandise exports and a three-fold increase in our services exports in six years is a tall order by any stretch of the imagination. Four leading export firms do not have an answer.
I hope the Chief Economic Advisor (CEA) takes the cue and prepares a comprehensive action plan to boost exports of goods and services, aiming to reach the USD one trillion mark for each by 2030. If not feasible, such stiff targets should not be jettisoned and a realistic action plan should be prepared. Action is more important than slogans!
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