AM Naik, chairman of the country’s largest infrastructure development company Larsen & Toubro, today called upon the government to create the right ecosystem to channel the anti-China sentiment productively.
“The strong anti-China sentiment within India and around the world is a possible game changer for domestic industry,” he said, delivering the chairman’s statement at the 75th annual general meeting of the company.
“To leverage these trends and harness them for productive purposes, we need to move beyond knee-jerk responses and draw up a long-term strategy with a time-bound plan for implementation. It is essential that an enabling eco-system for growth is created.
“Reforms are urgently needed in many sectors including land acquisition and labour. The financial system is also in urgent need of attention. In tandem, the administration would do well to streamline processes and accelerate the pace of decision making,” he added.
The call comes at a time when both the government and people in general seem more aware of the need to reduce India’s dependency on its eastern neighbor for meeting its need for manufactured items.
There has been an increase in anti-China sentiment in the last two months after China encroached on territory that has been in Indian hands for over a century in the Himalayan region. Even though the Indian government claims that no territory is currently with the Chinese, most experts believe that China continues to occupy some of the Indian land it seized this summer.
An attempt to clear the area of Chinese troops ended up in a bloody scuffle that ended in the deaths of dozens of soldiers on both sides two months ago.
The scuffle, and the vitriol that resulted from it, has led to calls by people in India to boycott Chinese goods. However, India depends on China to meet most of its demand for manufactured goods, particular in hi-tech and electronics areas.
The government has, meanwhile, indicated that it will be setting in motion certain projects and schemes to encourage the manufacture of electronic items in India.
A large chunk of mobile phones are already assembled in India, though mostly by Chinese companies.
The government also recently put televisions in the restricted list of imports, making it difficult for companies to import fully assembled televisions.
However, India lacks indigenous factories to produce key electronic components, including the semiconductor chips and LCD displays that account for about 60%-70% of the value of most electronic devices these days.
Most of the electronics manufacturing taking place in India at present involves low-tech items such as printed circuit boards, chargers and the cabinets/boxes of TVs. These items are then assembled, along with imported semi-conductors, displays and other items, to produce a complete product in India.
Things are no better in the defence sector, where an estimated 75% or so of the budget is spent on imported equipment.
L&T, along with the Tata Group and certain government enterprises, is among the few players who have some presence in defence manufacturing in India.
L&T “has all along been championing self-reliance in the key sectors of Defence, Nuclear Power, Space Research, Power and Infrastructure,” Naik said.
“With ‘technology for sustainable growth’ as the central theme of our endeavours, we reiterate our commitment to rise to the occasion and contribute to the national cause.”
He called upon the government to take concrete steps to facilitate the production of goods in the country.
“I believe that aatmanirbharta [self reliance] represents the logical next step to ‘Make in India’ for it encompasses the entire value chain of design, procurement, manufacture and delivery. This is an opportune moment for government and industry to act in unison and advance national interests,” he urged.
COVID-19
Naik also said his company has been contributing its bit to the fight against COVID-19 pandemic and did not lay-off even contract workers.
“We took it upon ourselves to ensure that the 1,60,000 contract workmen at our project sites received good care, by continuing pay them their wages, provide food, shelter and medical assistance. This involved an outlay of approximately Rs 500 crores per month during stringent lockdown period,” he told shareholders.