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.

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