What are the challenges for the Indian industry? As I see it, in the short term it is quality, productivity, cost, response time and innovation. In the long term, the challenges will be scale (our scales have been miniscule), technology upgradation (our technologies are out-dated), product design (we have very poor concepts of product design) and finally strategic partnerships not only within India, but outside, and also attitudinal changes and mindset changes.
New paradigms in the generation and protection of intellectual property rights will pose new challenges. We believed in July 1991, when we moved to integrate the Indian economy with the global economy, that integration started and ended with the capital T, as in trade. But unless the other T, as in technology, is emphasized and technology is also integrated, we cannot reach a competitive position. The second problem is that we had a misperception that with the opening up, there will be an enormous flood of foreign capital and foreign technology. If we draw of technology has not really taken place in important areas. Indian firms that seek technology are looked at today as competitors. When IPCL was trying to get technology for alpha olefins to make alpha olefin sulphonates, we went Idemitsu, Chevron, Shell and others, but they would not sell. Because, India was no more being considered as a bottomless pit for demand but as competitors. This is something that we will have to realise.
There has been no significant forward technology licensing. There have been conditionalities in terms of technology markets, stake-holding, product swap, technology being broken into different packages, not even straightforward technology licensing agreements because mergers and acquisitions distort the entire picture. Then, of course, there is the dual-use issue. These are the real issues that India will have to grapple with.
Strength respects strength – and that is the key issue. You can always extend your hand and ask someone to shake it. It is upto the other person to decide whether he will shake hands with you or not. He will look at your technological muscle. I believe unless we develop this strength, we are going to be in a very hopeless situation. So what do we do?