Tata Sons Chairman N. Chandrasekaran has emphasized that India must move beyond its current assembly-led growth model to establish full end-to-end domestic manufacturing capabilities. Speaking at the Indian Foundation for Quality Management symposium, Chandrasekaran outlined this crucial shift as fundamental for sustaining the nation's robust economic growth into the future, particularly in line with the Prime Minister's 2047 vision.
Despite a challenging global environment, India's economy remains strong, consistently exceeding growth expectations. Chandrasekaran cited several indicators of this strength, including double-digit growth in auto sales, credit expansion, power demand, and cement consumption. He also highlighted that India's current account deficit is consistently below 1% of GDP, with services exports reaching approximately $418 billion, accounting for about 11% of GDP. Strong forex reserves, currently around $785 billion, and low bank non-performing assets further underscore the economy's stability.
Key Priorities for Long-Term Growth
However, to sustain this impressive growth trajectory, Chandrasekaran identified several critical areas requiring concerted effort:
- Energy Security: Ensuring a stable and secure energy supply is paramount for industrial and economic expansion.
- Manufacturing Jobs: The economy needs to create more advanced and precision manufacturing jobs, facilitating a shift of workers from low-productivity agriculture to highly productive industrial and modern services sectors.
- Human Capital: Significant investment in education, skill development, and technical training is essential to build a skilled workforce capable of supporting advanced manufacturing.
Chandrasekaran stressed that while assembly-led growth is crucial for fostering a strong SME sector, the transition to end-to-end manufacturing demands substantial investments in research and development (R&D) and the creation of intellectual property (IP). India must not only produce goods but also develop the equipment necessary for their manufacture, remaining closely aligned with market demands.
Quality as a Competitive Edge
Drawing lessons from global manufacturing leaders like Toyota and Germany, Chandrasekaran underscored the importance of quality as a competitive advantage. Toyota, he noted, uses quality not merely as a product outcome but as a driver for innovation, productivity, and overall competitiveness. Germany's focus on quality, engineering excellence, standards, and precision has similarly transformed its national competitive advantage, fostering a robust supplier and SME ecosystem.
India, he asserted, must adopt a similar approach, leveraging quality as a mechanism for innovation, productivity, and competitiveness to develop the capability to manufacture products at a global scale.
Infrastructure: A Critical Growth Multiplier
Infrastructure development will continue to be a vital growth multiplier for India. Chandrasekaran identified infrastructure, institutions, and intellectual property as the three critical pillars for the nation's long-term development. He pointed to ongoing initiatives such as PM Gati Shakti, railway modernization, dedicated freight corridors, and urban mobility projects like metro expansion as key components of India's infrastructure push.
The Tata Sons chairman also highlighted the necessity of building capabilities in strategic sectors including automobiles, aerospace, semiconductors, and batteries, noting that the Tata Group is actively investing in several of these areas. For India to realize its 2047 vision, growth must be inclusive, sustainable, and underpinned by world-class infrastructure, strengthened industrial capabilities, and substantial investment in human capital.