Pawan Goenka, Managing Director of Mahindra & Mahindra (M&M), said on Friday that India needs to become cost-competitive and scale up to develop its industrial sector and compete globally. The automotive industry leader also emphasized improving productivity and hampered the importance of a global value chain to enter prosperity and economic growth. While attending the BNEF summit here, Goenka said the government is making serious efforts for the first time to see the country’s manufacturing sector grow. “You can’t develop industrialization by forcing people to invest because the investment can only happen if you get a return. So what India needs to do is reduce the cost of manufacturing.” Unfortunately, Goenka said that India is not competitive in manufacturing costs for a variety of reasons.
He added that there are factors such as the time required to establish a factory and the cost of money, adding that the industry needs to combine different factors to develop the manufacturing base. “China was not built in one day, it took decades of effort focused on a specific goal. China built a scale, and India could not build a scale. Without size, the manufacturing sector cannot grow. Therefore, the industry and the government will have to work together. “He said that India should aspire to become a producer of products and then export them to other markets.
“There are many opportunities in all sectors, but there is nothing we can change and say that we are ready because we need to work hard and make a five-year plan … many companies leave China and we know very well that very few are reaching India. So we need to make manufacturing competitive in terms of cost and scope.
“Made in India or the growth of manufacturing has been a top priority for Prime Minister Narendra Modi since 2014, but unfortunately, India has not made much progress on that,” Goenka said. “For the first time, thanks to COVID-19, the government is making efforts to develop the manufacturing sector in India,” he added.
Goenka said that this whole movement towards employment is cause for concern. He said: “If every country wants to go into a cocoon and isolate itself from the rest of the world, then we will return 60 years ago, and this is not something that will bring prosperity and growth to the economy.” He admitted that recently, the trade balance went too far in favor of 3-4 countries, but this should not push the country into isolation. “There are things that any country can do better than others, and if we try to bring everything to one country, it will be very ineffective,” Goenka said. He also said: “If we are producing something like a mobile phone, a car, or a washing machine, we must have a global value chain and we must not start responding to a situation like this and say that everything must be safe.”