Anand Mahindra urges enhanced government-private sector collaboration for ‘Made in India’ to be a global brand | Autocar Professional


Anand Mahindra urges enhanced government-private sector collaboration for ‘Made in India’ to be a global brand | Autocar Professional

Underlining India’s latent potential to emerge as a global powerhouse, Anand Mahindra, chairman of the Mahindra Group, has called for a collaborative approach between the government and companies to unlock scale, spur innovation, and expand the market globally.

Speaking at the fourth annual Atal Bihari Vajpayee Memorial Lecture in Delhi on March 10, 2024, he said: “I am advocating for a government partnership with private companies in three major areas – scale, innovation and global reach.”

The Indian government has been for some time now aggressively driving its growth programme towards the country becoming a global powerhouse and achievee developed-nation status by 2047. A number of initiatives including Make in India, Digital India and production-linked incentive (PLI) schemes have been rolled out, all with a goal to drive both local and global gains. The PLI scheme, which aims to significantly boost domestic manufacturing, covers around 14 sectors at present, including automobiles, electronics, pharmaceuticals, solar energy, batteries and white goods.

While acknowledging the PLI scheme as a powerful instrument of partnership, Anand Mahindra sought government support in extending it to cover larger sections of the industry. “We do need nurturing and incentivisation for scale. Not through protectionism but through support for a limited time horizon,” he added.

The Mahindra Group chairman believes that more focus on improving cost structure and more advances in the port model will have a multiplier effect on the industry. “We also need government support to tackle the root cause that affect our competitiveness. Manufacturing costs are unnecessarily high. Land cost, utility costs and logistic costs – all of these contribute to our lack of competitiveness,” he said.

The National Logistics Policy targets reducing the country’s logistics cost to 8-10% of the Gross Domestic Product, compared to the earlier 13-14 percent. By lowering logistics costs on par with major developed countries, India can optimise costs across the entire supply chain, boosting the competitiveness of its products globally.

Commenting on the reach and development front, Mahindra said India’s spending is much lower. “India spends a much lower share of its GDP, less than 1 percent. Compare this to the US and China, which spend more than 2 percent. This needs to be boosted,” he pointed out.

Drawing examples from the US government’s early-stage support for the development of the internet and chips, he said higher government funding to universities and reach institutions can foster groundbreaking innovations that can eventually be commercialised.

Making and innovating in India for the world
While emphasizing the importance of global reach to fully leverage scale, Anand Mahindra said: “Made in India must become a globally recognisable brand. This calls for more marketing, more trade shows, and more participation in global meets to showcase Made in India to the world. In a nutshell — bigger budgets and effective pitching.”

The recently held Bharat Mobility Global Expo 2024 was an attempt to present India as a mobility hub in the global landscape. The government projects India to be the world’s largest electric market by 2030. The Bharat Mobility Global Expo will now be an annual event, with the biennial motor and component exhibitions set to converge.

For extending India’s global reach, the Mahindra Group chairman made a pitch for making business an instrument of foreign policy as well as tying up international aid to the Indian industry. “We extend substantial aid to developing countries. But this could be tied to purchasing from Indian manufacturers . . . it could help open markets for Indian companies, in otherwise closed markets,” he said.

He also called upon regulators to work as partners and proponents with innovators rather than being taskmasters. “I spoke to several startups on what their issues were. Almost all of them mentioned that they were literally lost in the maze of existing regulations and controls applied to them, sometimes retrospectively,” he added.

Apart from government support, Anand Mahindra noted that the Indian industry needs to have lofty aspirations and strong self-belief. The private sector is lagging when it comes to big investments and the recent growth has been disproportionately fuelled by government investment. According to him, the mindset of risk aversion and lowered aspiration as a result of “post-colonial subservience disorder” are the major reasons for the wariness of the private sector.

Lead image: courtesy Anand Mahindra / X

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