Welcome everyone and thank you so much. Now let me set the context for our conversation today. India's manufacturing sector is not only an economic engine, it is the foundation of our journey towards Viksit Bharat. Contributing around 17% of the nation's GDP, manufacturing is set to play a transformational role in India's economic future, with the government ambitiously working to raise the share to 25% in the near term. The Make in India initiative, which has completed a decade, has been pivotal in fostering and strengthening India's global manufacturing status by enhancing foreign direct investment, skill development, and updating manufacturing infrastructure. In fact, thanks to Production Linked Incentives, or the PLI scheme as we all know it, FDI in the manufacturing sector has surged by an impressive 76%. But India's vision now extends beyond Make in India, it is making India for the world. With shifting global supply chains, India has emerged as a strong alternative manufacturing hub as companies seek to diversify and reduce dependence on several nations including China, a shift that has accelerated with Donald Trump's return as the 47th US president and his renewed focus on trade policies. The evolving landscape presents both challenges and unprecedented opportunities. With this impressive growth potential, our panel today represents three unique voices in manufacturing to discuss how India can sustainably achieve its goals and become a global manufacturing powerhouse. Let me welcome Dipali Goenka, CEO and MD, Welspun Living Limited; Habil Khorakiwala, Founder and Chairman, Wockhardt Group; Rajesh Sharma, CEO, Kaynes Technology India Limited. Now in this panel we have three distinct sectors but all of them very, very crucial to this dream of Viksit Bharat. Look at it this way, every time there is a requirement, it's the private sector asked to come up, put in the capex, create the jobs, and of course drive us to Viksit Bharat. Let me start with that thought with you, Dipali. This claim or this assertion that the road to Viksit Bharat is paved by the country's manufacturing sector, would you agree with it?
I totally agree with that because when we talk about manufacturing and we are talking about 1.4 billion people and 30 to 40% of that is the youngest population in the world, definitely it is the path towards Viksit Bharat. When I talk about manufacturing and when I talk about Welspun and home textiles, let me tell you one thing. When you talk about the white collar and tech, that is another aspect for it, but the deployment of the grassroots level will be done by manufacturing. Like example, textiles, because after agriculture it is manufacturing and textiles that deploys the maximum people and I think it is one of the highest revenue earners as well for India today. So yes, manufacturing will be an integral part of what India wants, a journey towards Viksit Bharat, but there's a lot more to be done there, Tam.
I think it's also important to set the context of why manufacturing is so crucial. From the last 75 years plus of India's independence, we have made our name in the world as a service sector powerhouse. We're famous for the back office of the world, the call centers of the world. It's time to shift gears. And Dr. Khorakiwala, let me come to you on that point. Can we really continue to rest on the power of our service sector as AI threatens some of those industries? Why has manufacturing become so crucial and you see policymakers shifting gears as well?
One of the aspects of our industry, pharmaceutical manufacturing, is a very science and technology driven industry. So when you talk of our industry, manufacturing along with innovation is a very integral part of our industry. And our India's success of supplying medicine to us and other parts of the world is a result of a technology input over the years. And I believe that the health sector and medicine and drugs are undergoing transformational change over the years and the future is very unlikely to be the same like the past. And there is going to be a major technology shift from chemical-based entities, which is today the bedrock of our pharmaceutical product, to moving towards biological-based drugs. So new drugs which are recently approved in the last 5-7 years, 70% of them are of biological origin. So I think this is the area where already India has a base, but I think we have to build up the kind of strength we have done in chemistry in biologics in the years to come to be successful. The other important aspect is that in our industry, if you have to make a mark in the world, two things are required. One is ours is an intellectually driven industry more than the people-driven industry, so you need scientists. And it certainly helps and I think will certainly help the future of our industry. This therefore, what is important is that we need to establish a good base where there is only a little beginning has taken place, is finding new drugs. And therefore, research and innovation will be very important if India has to be recognized as a worthwhile pharmaceutical company other than supplying medicine.
So Zosurabalpin is something that everyone's talking about, new innovations coming in from across the board.
Oh yeah, we have invested for the last 25 years to finding new antibiotics. And today I can, without exaggeration, can say we are in antibiotic space on drug discovery, probably we are the most successful drug discovery company anywhere in the world.
That is amazing. That is amazing. Remember we are going through a phase of antibiotics that are getting more and more resistant. So to put in context, an innovation coming out of India from an Indian company of an antibiotic which is at the forefront becomes very crucial. The other aspect of innovation and Mr. Rajesh, the industry that you are in is so exciting. Why it's also exciting to hear from you is what happens when there is government and policy push. So for example, the PLI scheme and how much of it has ensured that in your space you can charge ahead and compete with the rest of the world.
So certainly, Tam, first thing I'd like to say actually instead of Viksit Bharat we should call it Re-Exit Bharat, Viksit Bharat, because if you read the history of India in the AD 1 to 1000, India had almost 33% of the world's GDP share and we are talking in 2047 to reach that level again. So if we are talking of that and that's where something where the government is working towards, it's very important for the success of schemes like this where the industry leaders do come together. In addition to that, the government policymakers have to join hands together very strongly supported by the financial markets because without financial institutions coming forward, a collaboration between these three segments is extremely critical for manufacturing to really become large in the country. Coming to your specific question, certainly PLI has given a great push to the Indian manufacturing. That was one of the areas, you know, where when China was growing into the manufacturing side, the support from the government was very, very critical. Now if you look at the infrastructure development where the ports, the highways, the supply chain, the logistics is improving in terms of integrated supply chain which is very, very crucial to the whole thing. And then the talent pool which is very critical. Now Dipali already talked about the age, the average age of the people in India with average being between late 20s and early 30s, that workable age of employees that are going to be in India is very, very important for manufacturing segment. So the PLIs have certainly given a great push to the manufacturing in India. Specifically in the scheme, one of PLI, whether it was Telecom, has been a great opportunity for companies like Kaynes and the other electronics manufacturing companies to gain the advantage of that and make better offerings at competitive price to its customers.
So the EMS story is well known from a manufacturing perspective, from a stock market perspective. And we'll go around again to the next point and I'll come to you, Rajesh, on this. When you hear about reciprocal tariffs from the American perspective, what does it mean for you considering your company is now also foraying into semiconductors?
See, of course the importance of semiconductors was very much realized during the pandemic time, yes, when the whole world was completely shifting to the technology schools, working from home, the jobs happening from home, the need for your display fabs, your mobile phones, your tablets, your laptops, everything was in short supply. And it's not just India, the countries around the world focused on their semiconductor policy. It's not just that India alone set up an India Semiconductor Mission, there are many countries who actually established specific semiconductor missions making a push for the semiconductor policy of their country so that they can support the increasing demand for the electronics and technology for the country. So there could certainly be tariff pushes that will come up from the US and other countries, but I think more than reciprocal, the government has to work towards the bilateral tariff system with the countries. And that's because it's not that everything either India could manufacture or China can manufacture or any other country can manufacture. It is, you know, it's a global village today. We all talk about global village, unless we all work together with bilateral tariffs, bilateral system, that will be very, very important for the success of manufacturing.
Which is why the next few weeks become so crucial from the perspective of the manufacturing sector in India and the world. Dr. Khorakiwala, when you hear about reciprocal tariffs, what is your response? Are you worried or are you not?
See, our industry, pharmaceutical, basically to make a change in formulation, for example, takes roughly 3 to 5 years. So from that context, unlike steel or cement, you can switch suppliers at a day's notice, you can't do this in our industry. So the view I have is, in short term, any tariff coming on Indian goods will be passed on to American consumers and Indian companies will not be affected. But long term, one doesn't know what happens after 3 to 5 years.
Yeah, no, no, let me repeat that. This is interesting. Any tariffs that are imposed on Indian companies will impact American consumers, not Indian companies, because we'll just pass it on.
So, you know, this is an interesting perspective. I suppose, Dipali, the concern is that doesn't make us less competitive because if it's reciprocal tariffs then from that perspective we are seeming higher.
So first of all, I think let's keep the tariffs aside, but let's talk about India in a position. For me as a textile hub or the manufacturing hub, I think the world needs India. And as we are speaking about Viksit Bharat, I think India has been put on the world map and is being spoken about in all the boardrooms across the globe of all the countries for being an integral part of that supply chain. So when we talk about America, I think, and when I talk about Welspun as a company, as an organization, I mean the complete integrated supply chain, one of the biggest manufacturing factories or companies this side of the world, apart from China, creating the entire supply chain and the serviceability for all the retailers globally and having more than 42 patents in home textiles. I think I can just tell you one thing that while we talk about the tariffs, I think first of all, I think it's going to be more bilateral because I think when we are talking about two countries, they've already come to a conversation where they're going to be talking about growth in both the countries and it's going to be beneficial to both the countries. So I think for me, I'm more positive about it. To Mr. Khorakiwala when he talked about it passed on to the consumer, for us in home textiles, it is a very small part of that wallet share where we are that towel or a sheet or that rug that they use and it is very, very sensitive. So I think it will be something that we will have to work mutually. But however, coming to the tariffs, I think for India and us, both of them need each other and I think the bilateral trade would be something that we will be talking about more than anything else.
You want to add a point? Yes, yes, of course. See, if you look on the semiconductor side, the US has predominantly and has a very large share of the design-led semiconductor. The manufacturing focus was always on the Far East, Asia, China, Japan, Korea, Taiwan and countries like that. And then the supply chain was completely dependent on China and Taiwan. So with that as the background, what we are looking at is shifting manufacturing into India. And if you look at the design workforce, almost 20% of the design workforce in semiconductor and electronic space is Indians, whether based out of India or based outside of India, they might as well do it here. So that's what would happen. So there's a lot of shift happening on design-led manufacturing and also on the manufacturing per se in the country.
I just would like to add, as far as the pharmaceutical industry is concerned, we are one of the largest suppliers of medicine worldwide. Our industry is about number three in terms of export earning today and we supply 40% of medicine the American consumers use. 60% of vaccine worldwide, it is supplied and that is same happened in COVID-19. So it's a very, very significant player. We are already there and therefore from that point of view, if we keep up with technology and science as we have done in the past, we can always aspire for more.
You know, we should acknowledge the role of Indian pharmaceutical companies in supplying affordable medicines across the world to nations and people who have not been able to afford them. So that is a huge contribution of the Indian pharmaceutical industry and that is something that we should acknowledge. But Dipali, since we were talking and this is something Rajesh brought up about being an alternative to China, so let's address the dragon in the room. We keep talking about India plus one or India versus China. As an alternative to China, how do you see us getting there in your industry? Are we able to capitalize on what we are seeing in neighboring Bangladesh which has been a textile hub and is undergoing some issues right now?
So, you know, we always speak about China plus one for India, but I think the important aspect let me point out here is that we are talking about the youth and the skilling here. There's a lot more to be done here. The government has leveraged, government has given us the opportunity for PLI. Even in the kind of budget when you're talking about, government is talking about upskilling, the whole PM Gati Shakti being the logistics because that's an integral part of the entire supply chain. The PLI, as we spoke about, there's something that we really need to do is about the culture in this country and the speed to market because it's not just about the investments in manufacturing, it's the investments in the manpower and the people. And I think there's something that we need to really look at. As if we compare ourselves to China, China, there's lots that we've done but there's still lots more to be done. And for us at Welspun, we deploy around 25,000 people and if we are talking, I mean, and I think as corporates and as we had spoken earlier, that it comes on to the private sector to look at capex, look at how we are taking on that burden or an opportunity to take that forward. I think at Welspun we actually are looking at skilling more people, looking at investing in technology, Industry 4.0, AI and other investments. So while we talk about China, I think we ourselves are our own brand ambassadors and I think at Welspun we believe in that when we take that forward. And whether it is the supply chain analytics sitting in America, or the warehousing doing the vendor managed inventories, or working on the patents or different kind of innovations, I think that's going to be a very important aspect. Now taking on the opportunity of investing in capex, investing in whether we need to make fashion towels here or fashion bedding or it could be the utility bedding, setting up even the pillow plant in America, I think there are interesting things that I think as corporates we'll also have to take on. So while the government will leverage, will give us some more opportunities, but I think it is on us how do we take that forward.
No, no, well said, very well said in terms of what the role is of the private sector. But let me just come to you again on the point you made of what we need to learn in terms of quick turnaround. And if I can ask you to elaborate on that because it's not as if there is no appetite for Indian goods, it's about whether we can deliver in the time and speed that is required.
So again, I think we all will agree here on the panel as well. I think the critical thing is about technology and digitization. And again, I mean, I'll just give a simple example of what we do. I have warehouses in America. I mean, for certain retailers, I do vendor managed inventories. That's like literally writing the use for them, actually analyzing what the consumer is wanting and actually integrating the entire supply chain together. So, you know, for all of us sitting here in this room, the key thing is that now it is about how you are going to contribute towards Viksit Bharat. It's not just going to be the government working with you, but it's also going to be how you're going to be working towards that as well.
Let me come to you, Rajesh, on the point of should India be looking at, or should Indian industry be looking at itself as an alternative to China, competing with China, and is this moment right for it? How should we position ourselves in a global scale?
Yes, see, in my opinion, we should stop looking ourselves as an alternative to China. We have our own strengths, we have our own market in India and outside of India, and that's what Indian Inc should be focusing on, delivering with your capabilities. See, one of the advantages how China positioned themselves was on scalability. If I look at electronics industry or semiconductor industry, if we talk of the factories in China and Taiwan and these places, they run into square kilometers. We talk about acres. If you have a 500-acre factory, we think it's like really big, and there we talk of factories of Foxconn which run into square kilometers. They talk of hiring 4 to 5 lakh people in one single factory. And we are talking about employment of a few thousand or maybe a few hundred, that's it. So that is the huge opportunity. The scalability can be delivered.
So how do we deliver that scalability? How do we get there? Because this is, I think, the nub of the entire conversation. Everyone's clear we are getting to Viksit Bharat, everyone's clear manufacturing is the driver. Now the question is about how.
See, the OEMs around the world are looking at India. So they are looking at Indian manufactured goods. Ever since the pandemic was over, the way we have been receiving the inquiries from some of the largest OEM brands around the world in various segments. When we talk about electronics, it's not just the white goods or the mobile phones or laptops, etc. We talk about automobile industry completely, we talk about electric vehicles, we talk about medical devices, we talk about railways, we talk about aerospace, we talk about defense, we talk about outer space. So these are 9 or 10 industries which Kaynes alone caters to in the electronic space. So it's every segment that is open and available for you to explore.
Let me just add on here. Being the thought leader, I think we just can't be followers and we can't just be doing just the manufacturing. But I think leading, and I think that's going to be a very key thing for us to work on. Now whether it's textiles or the semiconductors or pharmaceuticals as we are talking about, I think it needs to be that thought leadership that India needs to provide to lead also towards the Viksit Bharat.
Yeah, I mean an example of the world is sustainability. I think one of the biggest examples. And Dipali, you alluded to this question earlier. When we hear from policymakers, we hear from economists, there are two things that come in time and again when we're talking about our economy currently. Why is private industry not investing enough? Where is the capex? The second part is, are enough jobs being provided? Now I think entrepreneurs in this country are some of the most resilient people because you have to go through so much to be successful and move on that it takes real grit and determination. But the ask today is, please invest more, please provide more jobs, please provide higher paying jobs. What is the response to that ask? And I'll start with Dr. Khorakiwala on this.
