New technology could disrupt government’s manufacturing push, Anand Mahindra

DAVOS Will the Chinese slowdown lead to the automatic rise of India as a manufacturing superpower? It’s not inevitable, according to Anand Mahindra, chairman, Mahindra & Mahindra, India’s leading SUV and tractor maker. Indian government officials and economists have been projecting that higher costs and wages in China and the excess capacity built up there would help make India an attractive base for manufacturing. Prime Minister Narendra Modi’s overseas trips since taking over were aimed at getting foreign companies to invest in India in a variety of sectors such as electronics, heavy industry and defence.

But Mahindra, one of the panellists in a debate on ‘Transformation of Tomorrow’ at the World Economic Forum in Davos, said it will not be easy. And the reason is not government policy but the rapid emergence of radical new technologies like 3D printing, smart robotics and artificial intelligence that are already upending business models around the world. These new technologies are likely to change the face of manufacturing, and India’s attempts to do another China will have to take this emerging challenge of the Fourth Industrial Revolution into account.

“Indians should be most worried. Will there be demand for the stuff that we will produce?” Mahindra asked. He said that the conventional wisdom and thinking underlining development models in India will have to be reconsidered and government planners must ensure that the benefits of the Fourth Industrial Revolution flow to villages and the countryside. He said the belief that cheap labour will migrate to cities — which means greater development of urban centres and the use of this labour to drive an export revolution — will have to be rethought.

He said 65% of India lives in villages and the development of rural areas must take priority. Advanced technology like 3D printing and the use of satellites in agriculture will change the countryside and improve rural living standards. He said Mahatma Gandhi envisaged a similar redevelopment of villages but was misunderstood and considered out of touch with the aspirations of a new and independent India. The Fourth Industrial Revolution can bring to villages the prosperity and transformation that Gandhiji wanted, he said.