Invest in manufacturing: Kapil Sibal to US industry
At the Indo-US Resurgence Summit held at New Delhi, Indian and US industry leaders converge and look forward to developing a stronger partnership
[ By Sucheta Das Mohapatra ]
America is interested in only selling its products in India and is showing least interest in manufacturing,” said Kapil Sibal, Union Minister of Communications and Information Technology, and Law and Justice. He opined that the only way forward in the Indo-US relationship is by keeping in mind the interest of 1.2 billion people living in India and their stake in global economy. “India will be a manufacturing economy in the days to come. Invest in manufacturing,” he told the US industry and suggested: “we are the oldest and strongest democracy. Whether you like it or not, willy-nilly we are long-term partners.” The Minister was speaking at the “Indo-US Resurgence Summit: A Search for Innovative Strategies” organised by the Indo-American Chamber of Commerce (IACC) at New Delhi on December 2.
Sibal even suggested that the organisers change the name of the summit from Indo-US Resurgence Summit to Indo-US Convergence Summit. “We need to talk about convergence before talking about resurgence.” India is the largest potential market and keeping in view its growing population, there are different areas where the US can invest as we leapfrog from the industrial revolution to digital revolution.
While the Minister’s statement received great applause, representatives of the American industries in India spoke out in defence stating that offset for them is not a compulsion but a choice. “We look at offset as an opportunity and not as an obligation. It makes sense to us as a global company,” said Nikhil Khanna, Country Director India, Global Business Development, Raytheon International Inc, while Pratyush Kumar, President, Boeing India said that Boeing’s journey in India came much before offsets. The India Heads of the US defence and aerospace majors gave out details of their programmes in India and their plans for component manufacturing, training of new generation aerospace engineers and creating capacity in India for a thriving and growing aerospace and defence sector in India. Nalin Jain, President and CEO, South Asia, GE Transportation, also spoke on how an ecosystem is building up in India. He gave details of how GE is helping India in building infrastructure, infusing technology in defence and aerospace and the many transfer of technology (ToT) agreements with the Hindustan Aeronautics Limited (HAL) for Tejas, Hawk, Navy frigates, etc. Ajay Kumar, Programme Director, US-India Aviation Cooperation Programme, informed about a workshop being organised during the India Aviation 2014, and said that there are many proposals meant to develop India’s aviation ecosystem and an ex-number of projects have also been identified.
Presenting the micro, small and medium enterprises (MSME) was Commodore (Retd) S.L. Deshmukh, the Vice President (Technology and Industrialisation), Aerospace and Defence, Sun Group who complained that while there has been a lot of debate on offset, it is still being seen as a compulsion by the industry and the number of offset contracts signed till date is only a few. While he welcomed the Indian Government’s policies on MSMEs including the provision in the Defence Procurement Procedure (DPP) 2013, he questioned can a sector which contributes 50 per cent of industrial employment and 50 per cent industrial production in India, be neglected.
“The landscape of US-India relationship in the last one decade is nothing short of a revolution,” said Dr Vivek Lall, Chairman and Defence Committee, IACC, NIC and President and CEO, New Ventures, Reliance Industries Limited, and added that today the IndoUS relationship is broader and deeper than before. John McCaslin, Minister Counselor for Commercial Affairs, US Embassy, who has just finished his visit to six major cities of the country—Chennai, Mumbai, Kolkata, Ahmedabad, Bengaluru and Hyderabad—in his four-month tenure said that he is optimistic and the US Government is committed to further bilateral relationship. Raman Roy, Chairman, NIC’s IT and Cyber Security Committee and Chairman Managing Director, Quatro Global Services Pvt Ltd, spoke about disruptive innovation and said that if India and US are able to integrate the disruptive innovation, it will be mutually beneficial for the two large democracies having huge potential. Raghupati Singhania, Chairman and Managing Director, JK Tyre and Industries Ltd said that cost of doing business is certainly high in India, but we are not discriminating. He asked the Indians to make US industry feel at home and urged the US industry to be liberal in their investments in India. He said that the Indo-US relationship that moved forward with the dialogues that began between Prime Minister Manmohan Singh and President Barack Obama is now multifaceted and is building a strong edifice in the mutual relationship.
Speaking about the airlines industry perspective in India, Piyush Gupta, Partner, Kochar and Co, said that lack of proper infrastructure, bureaucracy/red-tapism, weak state-owned airline, high taxation, fuel prices and airport charges are the major hurdles faced by the industry. Dhiraj Mathur, Executive Director, PricewaterhouseCoopers, said that aerospace market has significant potential as well as challenges. He sent across some key messages to the government to rationalise indirect tax provisions for level playing field and encouraging MROs; simplifying and clarifying export procedure; bringing clarity on equipment that requires an industrial licence. He also said that the Indian industry should strategically leverage offset policy, invest and build capability for the long haul and collaborate with global players. His presentation was followed by Amber Dubey, Partner and Head-Aerospace and Defence, KPMG, who laid out the positives of the aerospace industry in India and said that there is huge opportunity for the American suppliers and business with India’s growing population. Policy changes will happen sooner or later; he said and added that the MRO sector is also opening up with the Indian defence’s plans to outsource maintenance of aircraft like MiGs and Antonov An-32s. On the aviation turbine fuel (ATF), West Bengal had already reduced or removed taxation on fuel and states like Goa and Odisha are also thinking on those lines. South China Sea is a concern, said Dubey, and added that India and US have to coordinate on this.