How have you seen manufacturing in India change in the last couple of years? Do you think that the world now prefers ‘made in India’ over ‘made in China’?
I would not go so far as to say that the world prefers ‘Made in India’ to ‘Made in China’. You are really talking of China. Their assets are excellent and have a very efficient supply chain in place over decades. I think it would be naïve to think that we can replace that 30-40 years of supply chain excellence in a couple of years of COVID disruptions. But I agree, surely India has become more conducive to manufacturing than where we were a couple of years ago.
How much growth do you actually see in B2B ecommerce business in the next five years? What role do you think you yourself and other Indian companies can play here?
B2B ecommerce is an interesting story which is on the cusp of taking off. There has been so much money that flowed in to B2C that sometimes we forget that B2B is where the real money is. So, we are now seeing the private equity players. We see money is flowing into B2B ecommerce which we have not in two years. B2C has been flushed with money and we know all the names there.
B2B is taking off now. We are just amazed every week. I look at the numbers and I am amazed at the traction we are getting on the website. Now you expand our experience with the thousands of such B2B enterprises in the country and this is an explosion waiting to happen. So, what we saw with B2C over the last five to 10 years, you will see happening in B2B over the next five to 10 years.
What potential do you see for export contribution to increase from the current levels?
I think there is a lot of potential for exports from India. We sometimes tend to think of India as one country, but India really is 30 countries in one. There are some state governments that are very progressive and some sadly not. So, we are seeing a lot of inquiries and we are right now speaking to a number of state governments to see where we can set up new manufacturing sites. That is the context of my comment just now about some state governments are better than the others.
I met a chief minister of state about three months ago and we had to wait five weeks before a response from their office. The other state governments where we go and meet the chief minister, while we are in that meeting the file starts moving. So, it is a very different way of looking at investments and looking at manufacturing. That is the one thing that certainly needs to change throughout the country. We need to behave as one country and not as 30 countries in one because what really happens is that investment will then flow to those five or six progressive states, which is frankly not great for overall development of the country.
The other thing that we need to be careful about and be cognisant of is the infrastructure cost within the country. Our logistic spends of GDP is 14% to 15%, which is about double what any other comparable country in the world would spend; about 7% to 8%. And why is that? Because 70% of our freight movement is by road. We do not use trains well. We do not use our ports well. So, that is the stuff that needs to change for us to really be able to start manufacturing more and more in India.
The last comment I will make is on the MSME segment. That segment deserves a much better look than what we have done so far, whether it be in terms of working capital for the MSME segments, whether it be in terms of management talent to run those companies, because they need a lot of handholding; which China has done really well. Apart from infrastructure, policies, and land and labour, is the development of a very vibrant MSME structure. I do not think we have done that good a job here and I frankly do not know if the government is looking at that as seriously as it should be. Hopefully they are and I am hoping to see more of that.
