Will India be able to make World-Class Products?

The past six months has been interesting experience sharing floor space with entrepreneurs in the Printing and Packaging Space, Leather Industry and Paper / Book Making Industry.

Each of these are very big industries by themselves, but the more I understand these industries I wonder if India will ever be able to produce World-Class outcomes out of these.

1. The machinery that is used in all these industries is imported. it is either Japanese or German if it is high end. it is chinese if it someone is doing a low-cost market.

2. Forget large scale digital offsets and the likes that cost in the crores, even a machine as simple as a mechanical cutter comes from China.

3. Take for example a simple print job. If you want high end outcome, you go to the fanciest printer - who either has a HP Indigo or KM machine. Thats imported, so no cost advantage there. The consumables - ink etc is imported, so no cost advantage there. The Paper etc is imported from Sweden, Germany and Italy, so no cost advantage there. In fact in all three of these aspects we are at a disadvantage because there is an added import tax.

4. Yet, everyone expects "cheap but best" products out of India. and everyone is hoping to capitalize on the cost arbitrage. In this equation the only cost arbitrage is the workforce.

So printers,manufacturers etc cut corners and hire people who pretty much can follow preset functions but can never really take full advantage of these machines. You go to them with a small order job that requires customizations, it will never get done. But that is also fair cause you are getting a 10-12% cheaper price compared to getting it printed outside of India (and you save on shipping on wait time).

What you don't count is the enormous amount of time that goes into managing this production to ensure that the quality is consistent - else you will see 10 good prints, the 11th one with a grease stain etc.

Reality : India's "cost arbitrage" doesn't come from efficient processes, indigenously built tools or consumables produced here, it comes from underpaying talent. And that is at best an exploitive business model.

How do we get to producing world class stuff?

Simple. We have to at the least start making the machines, and the consumables in India - to even get a shot at it. Take the precision engineering sector for eg, even the drill bits for the aerospace, military or scientific parts come from germany or UK or Switzerland. The day cheap labour is no longer viable, India loses its place in the global market - it will be cheaper to get everything done elsewhere and import finished goods.