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The promise of the Nano

January 31, 2008 09:41 IST

The recently-launched Nano has created extraordinary ripples not only in India but across the globe. While in the early weeks, the debate on the potential impact of Mr Ratan Tata's dream project was largely confined to the automobile sector and on the urban infrastructure and environment, lately the focus seems to be shifting to a more broadbased discussion on India's emerging prowess in the domain of engineering/manufacturing. In such discussions and media posts, by and large, the overall tone is highly positive on India.

Can, therefore, Mr Tata's dream project and his dogged determination to make it a reality mark another major turning point for India and do for the Indian manufacturing sector what Infosys, Wipro, and TCS did for the Indian IT sector?

Would the vastly enhanced international admiration for Mr Tata spur other Indian business titans to dream big on the scale of the Nano and lead to unprecedented product and business process innovation across multiple industrial and service sectors in India?

A lot, of course, depends on the on-road performance of the prototypes shows at New Delhi earlier this month and the ability of Tata Motors to manage the Nano business itself. However, should the Nano live up to its promise in terms of price-performance-experience, the implications for India would be absolutely wonderful!

India is seeing an unprecedented quantum of investment in many sectors. Beyond the boost for the Indian automotive sector and the likely emergence of India as the world's small car development and manufacturing hub, the first indirect fallout of the potential success of the Nano could be a vastly greater interest of global capital goods and equipment manufacturers to look at developing and producing the next generation of products for emerging markets like India that offer far more appropriate price-performance ratios.

There are already some signs of the same in the healthcare equipment arena, where global giants like GE, Siemens and Philips are reportedly looking at engineering new low-cost, enhanced-performance medical equipment, especially in the diagnostic/imaging areas designed specifically for low-income countries like India.

The same trend could well extend to other engineering sectors too including construction/earth moving equipment, farm equipment, and power generation equipment.

Beyond manufacturing, I hope that the "Nano" challenge is taken up in other sectors too. For example, textile and clothing remains as one of the most important industrial sectors for India. This sector continues to provide the highest quantum of direct and indirect employment compared with all other sectors, and impacts India right from the hundreds of thousands of cotton farmers to the 1.2 billion consumers of textile products in the country.

Unfortunately, for all its promise and India's competitive strengths at every level of the textile value chain, the sector has largely underperformed in recent years compared to its potential.

A Nano-like mission to provide good-quality, good-performance textile and clothing products to all but the top 150-200 million Indians (i.e. the remaining 1 billion) has the power to make an incredible positive impact on the Indian economy itself.

Like the Rs 100,000 car, a seemingly improbable price point of a Rs 100 shirt or a pair of trousers or jeans, or a Rs 250 saree set or salwar suit has tantalising implications.

Healthcare is another area where a Nano-like missionary zeal has the potential to transform the quality of life for hundreds of millions in India and many more outside India that do not yet have access to affordable, quality healthcare services.

With a little support from the state and central governments to create the right policy framework to give an initial fillip to massive private investment in this sector, a Rs 1,000 preventive health check-up, a Rs 1,000 per day high-quality hospital bed or a Rs 100,000 cardiac (or other major) surgical procedures is certainly feasible and deliverable.

Applying cutting-edge research and development, and appropriate technology as well as agri methods and processes has the potential to transform fortunes of over 700 million Indians living in rural India and directly or indirectly dependent on the performance of the agriculture sector.

Reform in just the cotton-growing sector - with the introduction of genetically modified BT cotton - has led to a near doubling of India's cotton crop output in the last five years. Much more can be done in almost all other agri-product categories since India's output per hectare remains at the lower end of the spectrum compared to international best practices.

If only the political thinking can get liberal on the subject of agriculture, and if only the government can consciously allow and encourage the entry of private enterprise, Nano-like thought processes can happen in this sector as well.

Whatever be the outcome of the actual launch of the Nano on the Indian roads, Mr Tata has to be given credit for dreaming to make possible and viable - the impossible and commercially unviable. It is now up to others in his elite peer group to make and deliver similar promises in other sectors too.
Arvind Singhal
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