Context: Amid debates on the needs, challenges and opportunities of Indian economy decoupling with that of China's, the first thing India needs is to create a free and competitive market and a globally competitive industrial sector.
More on the news: To achieve this, India needs to get rid of entirely pointless regulations that hamper enterprise, must build a single national market and need a stable banking system and fine infrastructure.
How to build a globally competitive Indian industrial sector?
- Data on present scenario:
- Indian industrial production is significantly dependent on Chinese imports, from machinery to product components, but there is less information on the exact dependence.
- Policymakers, businessmen and entrepreneurs need this information, which can be crowd-sourced in a specified format by a government portal.
- Dissemination of these informations: The material collected - product-wise details of cheap Chinese imports, their price comparison with domestic alternatives and tax disadvantages should be widely disseminated as a stock-taking step towards building a manufacturing competitor to China.
- Creating an international trade city:
- India needs to create something like China’s Yiwu International Trade City, the world’s largest small commodities market.
- Tens of thousands of buyers place bulk orders for an endless number of made-in-China products, from apparel and rugs to toys and staplers.
- India must set up such a market or two: Preferably in underdeveloped areas (till the 1980s, Yiwu was a poor rural county) and invite, along with Indian firms, companies from Vietnam, Taiwan, South Korea, Japan to exhibit their wares there.
- India could stipulate that the foreign companies that take part must start manufacturing in India within a few years. This will greatly accelerate India’s manufacturing ability.
- Need for a massive market:
- China also has massive markets that sell almost anything one needs to build a factory - motors, switches, belt drives, and machines of all types.
- India can do the same, and follow the same model as suggested above for Yiwu.
- But we currently don’t have too many companies that make machines, at least at scale.
- Collaboration between IITs and ITIs to build machines:
- India has Industrial Training Institutes (ITI), Indian Institutes of Technology (IITs) and National Institutes of Technology (NITs).
- The students of these premier institutions are brilliant at theory and novel ideas, but few can build a physical machine. ITI students have hands-on skill sets.
- As part of their programme, IIT and NIT students can be required to team up with their ITI peers to build new machines. This can be extended to other engineering colleges.
- India needs the ability to create innovative machines, not just buy from China, Germany, South Korea or Japan, and use them to produce things.
- Begin by reverse engineering and improving on the imported machines.
- Drastically ramp up the number of CSE (Computer Science and Engineering) seats:
- At IITs, NITs, Indian Institutes of Information Technology (IIITs) and leading private colleges.
- Though India is producing hordes of CSE graduates every year from hundreds of colleges, most of them cannot even write code.
- It is essential for the Indian infotech industry to jump to the next level, and for that, it needs huge numbers of competent people.
- Also, India needs to set up new colleges for computing and artificial intelligence (AI).
- Without a strong computing and AI manpower pool, India is being left behind, and this needs urgent reversal.
- Hence, India must at least quadruple the number of CSE seats in premier colleges, and allow students of any programme to take some core computer science courses within the next two to three years.
- Implementing these ideas looks challenging, but can be overcome with the aid of technology, adequate financing and favourable policy environment that creates incentives for all stakeholders.
- It is time for India to come out of the comfort zone of conventional concepts like student-teacher ratio, and learn from best practices of institutes abroad.
- A clear long-term strategy requires imagination and will like China.