I am just back from a trip to Mumbai and Delhi. Here are a few observations from my journey, the first in three years:
- Manufacturing as Core Strategy — At present 15 percent of India’s gross domestic product (GDP) is based on manufacturing; the goal is 25 percent by the end of the decade. This year, Apple has moved a part of its assembly line for the iPhone 14 to India. According to news reports, Apple could also make 25 percent of all iPhones by 2025 in India. It is evident that corporates are now seen to be adopting a China Plus One strategy.
- Women in Manufacturing and Shipping — Tata Motors recently commissioned an all-women assembly line at its manufacturing facility in Pune. More than 39 percent of the huge Infosys workforce is comprised of women and is growing. Maersk is looking for talented young women across the geography who can be trained to work on cargo ships, then move into white collar jobs. At present, women are under 1 percent of seafarers and 7.5 percent of new seafarers; the goal is 50 percent by 2027.
- India as the Third Largest Economy in World — India is set to pass the UK and Germany this year. It will do so by digitizing large portions of the economy, thereby making it more efficient, by increasing manufacturing and exports from India, by being a global leader in EVs, by bringing in more women into the labor market, by financing growth of small business, and by having data as a national asset. In fact, the Fourth Industrial Revolution plays exactly to India’s strengths.
- The Unified Payment Interface (UPI) — This is a government run open network that enables payments for all transactions from e-commerce to payment to small shop owners and beyond. Almost 7 billion transactions occur each month with a transaction value of $140 billion. On a daily basis there are about 220 million transactions with a daily (approx.) transaction value of $.5 billion. It gives small businesses a chance to compete with big players and allows the common man to participate in the formalization of the economy, away from cash and off the books.
- The Sustainability Story is Powerful — India will reduce the carbon intensity of its economy to less than 45 percent by 2030. The nation is on its way to achieving the aim of 65 percent of power generation from non-fossil fuel sources by 2030 and has declared that it will achieve more than that. Today India has 61 gigawatts of solar; that will rise to 280 gigawatts by 2030. Globally, solar power could cost 15 percent to 25 percent less in the upcoming decade, on the back of falling battery and solar panel prices.
- The India-U.S. Relationship — It will be based on common opportunities, not common threats. Both countries share values and work ethics. U.S. diplomats are describing the alliance with India as the most important global connection for the next decade.
- Hero Companies — Ready to expand and grow in the global market are giants such as Infosys, Tata, Mahindra, and Bharti. Tata has a $10,000 EV that has sold out online its 20,000-unit capacity for 2022 in the first week itself. Bharti is launching 36 satellites next week to complete its global network and compete with Starlink. Mahindra is going up-market with its EVs/ SUV against foreign competitors.
- International Solar Alliance — The India-France co-founded consortium of nations is working towards international solarization, especially in the least developed countries and small island developing states. In 2021, the U.S. also joined the alliance. Last year, 74 percent of the investments in solar went to OECD nations or China and only about 5 went to all of Africa. The 110-member country alliance, led by a technocrat and leading global climate expert, Dr. Ajay Mathur, will build a fund that is a backstop if payment is not forthcoming from the private sector for small projects such as solar panels on rooftops or solar pumps.
During my visit, we did events for clients which revealed data on Brand India. We found that companies headquartered in India are grouped with China and Mexico at the bottom of the rank in trust, far below the leaders (Canada, Germany), well behind the U.S. and Korea. We suggested that India needs hero products and hero companies such as Infosys and Tata. In addition to its services capabilities, India must project its manufacturing prowess, skilled labor and commitment to free trade. We highlighted the need for creating greater awareness about Brand India abroad. We finally said that the face of Brand India must not solely be its government alone; its CEOs should become global figures who attract the best and brightest talent to companies that will change the world.
Richard Edelman is CEO.