Jagdish Sheth is bullish on India. The Emory University marketing professor says the time is ripe for the country to seize the moment to flex its manufacturing muscle — just like China did decades ago and the United States did after its Civil War.
“There is no better time than now.” said Dr. Sheth, the Charles H. Kellstadt professor of marketing at Emory’s Goizueta Business School.
He spoke Thursday during Emory’s India Week about the “Make in India” policy: India Prime Minister Narendra Modi‘s ambitious initiative to spur manufacturing.
Energetic and passionate as ever, Dr. Sheth spoke off the cuff to about 60 people on “Why ‘Make in India’ Makes Sense”, displayed slides punctuating his points and answered questions.
Dr. Sheth lauded India’s natural potential, with its 1.2 billion-plus population and the civil infrastructure put in place when it was a British colony.
India could have soared after its independence, but the country made a couple of missteps, said Dr. Sheth who sits on the board of directors of Indian IT giant Wipro Ltd. and other companies.
It missed outsourcing opportunities. If it had done so, “there would be no Japan, Taiwan, Korea or China as we know it.” Then, it aligned itself with the Soviet Union in the ’70s, a relationship that Dr. Sheth calls a “disaster.”
“It set back India by at least a quarter of a century and opened the door for China,” he said.
Throughout his talk, the status of China, a one-time adversary that engineered astounding growth over the decades, hovered in the backdrop, as a model, as a partner, and as a competitor for the Indian nation.
If China can turn the page from an agrarian land into an industrial powerhouse, he said, so can India.
“It’s not like a dream or a mirage,” Dr. Sheth said, noting that leadership has been “the missing ingredient.”
Dr. Sheth sees the political will and leadership emerging in New Delhi and the nation’s business community. Mr. Modi, he said, is a “pragmatist.”
The goals of “Make in India” are to “facilitate investment,” “foster innovation,” “enhance skill development,” protect intellectual property rights,” and “build the best in class manufacturing infrastructure,” Sheth said.
Cutting the cost of doing business is key, he said, but there are challenges. Burdensome land, labor, visa and tax laws persist, and infrastructure bottlenecks abound. Developing energy to keep the new industries going and deciding what kind of energy it should be are urgent priorities.
Another hurdle is coping with cultural traditions, particularly in the poorer and less developed states, where old ways collide with new visions.
But several trends, he said, are going India’s way, including the sharp drop in oil prices, the growing domestic consumer market, rising costs in Chinese manufacturing and the appreciation of the U.S. dollar.
India’s status in the BRICS Development Bank (the newly launched infrastructure fund backed by the emerging-market bloc of Brazil, Russia, India, China and South Africa) is a positive, Dr. Sheth said.
Dr. Sheth quotes praise of India from Christine Lagarde, the managing director of the International Monetary Fund, who sees the nation as a “bright spot” in a gloomy world economy.
Agriculture, rail and infrastructure are key sectors for development, Dr. Sheth said. Others include defense, electronics, aviation, space, hospitality, textiles, IT services, cars, and film (think Bollywood).
He also listed several strategies to achieve manufacturing growth, including making Indian diplomats marketers themselves and leveraging the Indian “intellectual and scientific diaspora.”
He also urged India to invite Chinese companies to manufacture in India and to encourage Japanese and South Korean firms to export from India. Continued partnership with the U.S. on defense would also help move further up the value chain.
He invoked baseball metaphors to describe the stakes for India.
Will India “hit a home run” or will it be “strike three”?
He thinks India could hit it out of the park.
“Gods are blessing India,” he said. “May the force be with you!”