Dr. Jamshed J. Irani
The author is director, Tata Sons Ltd

After India achieved political independence, and for several decades thereafter, the manufacturing base of Indian industry was largely protected from the outside world by high tariff walls. Investment in the sector was guided by a government policy, which had a strong preference towards the public sector. Under the banner of "self-sufficiency", inferior-quality products were tolerated and thrust on to the Indian public.

Though there were some half-hearted moves to put Indian manufactured products in the international market in the decade of the 1980s, and there were also some signs of liberalisation of Indian industry the watershed year came in 1991. Under extreme economic pressure, Manmohan Singh and Narasimha Rao presented a budget which threw open the doors of the country to foreign competition and paved the way for liberalisation of Indian industry from the stranglehold of government controls. Liberalisation brought in competition from abroad, albeit in a controlled manner. Competition brought in increased customer awareness and with it the quality of Indian products started to improve.

Almost overnight, "Export" became a national priority and the manufacturing sector woke up find itself at a disadvantage relative to products made in more developed industrial bases. There was feverish activity to change, to modernise. The single-minded purpose of early years, which was replaced by an equal emphasis on quality, cost competitiveness and most of all, customer awareness. Customer had become ‘king’.

In this surge to match and compete with the wave of imported products, there was a significant improvement in industrial relations, and the managements of corporates and their labour unions moved towards each other to save Indian industry from annihilation. Since then much ahs been achieved without changes in India’s labour legislation. Industrial strife, so prevalent in the decades of the 1960s and 70s, has been almost eliminated from the Indian industrial scenario.

In the earlier decades technology, often not of the latest variety, was freely imported by the Indian corporates. This trend has also changed. No longer are foreigners interested in selling technology into India. They would rather sell their products. It is now necessary for Indian corporates and academia to cooperate and develop technology within the country itself. Just as labour and management have come to terms, so also now must the academia, scientific institutions and manufacturing industries.

Industries of the so-called "old economy"will get a boost form the proficiencies in our IT and software industries. It has already happened where some of our industries have become extremely competitive vis-a-vis the rest of the world.

What we need in India is more focus. Obvisouly, we cannot be competitive in all industries across the board. We have to carefully assess our core strengths, o0ur raw material bases, our manpower advantages and concentrate on those areas where we know we can succeed.

In the past, Indian industry had suffered through the high cost of capital, but lately here also we have had distinct signs of coming closer to international norms. Capital formation in the country should now be easier and more economical.