Make first, design next: Banmali Agrawala, new chairman of Tata Advanced Systems

Banmali Agrawala of Tata Advanced Systems (TASL) on Monday said the notion that one can ‘leapfrog’ into design without understanding manufacturing reflects an improper understanding of the manufacturing process.

The chairman of the aerospace and defence solutions unit of Tata Sons was the keynote address at one of the sessions of the Global Investors Meet (GIM) in Chennai.
“It’s like somebody saying I can try cooking (a) recipe without knowing how to cook,” he said. “It doesn’t work. If we want to develop Indian brands, we had better know how to make them. Then we shall know how to design and yes, sooner or later, then we can graduate to a stage when design itself gets to be such a unique component and feature that we can then get it made elsewhere. But we’ve got to simply start by manufacturing. We cannot leapfrog straight into high-end design.”

Agrawala went on to make a case for why fabrication was necessary, despite being capital intensive. He said it was important as these things teach the country lessons and set things up for the future.

“I certainly think we can set up a fab,” he said. “Is it expensive? Yes, it is. But then, someone’s got to do it. And it’s got to get done. And in this dimension, when it comes to semiconductors, let us appreciate that since we don’t have technology. We’re going to have to buy it and then develop it on the back of that.”

On the electronics manufacturing front, he said India ‘completely missed the bus,’ but now has an opportunity to catch up that must be utlilised.

“The model of the incentives (and) the way the government has positioned it is basically to make good for some amount of lost time. And any argument to suggest it should not be given, does not reflect the true understanding of what it takes to develop a complete manufacturing ecosystem,” he said.

Agrawala said the global trade in manufactured good is about $15 trillion and in electronics alone is $5 trillion (which is part of the $15 trillion). He said India’s share overall in manufacturing, and particularly in electronics manufacturing is almost negligible. He said the opportunity was massive and that it was ‘staring us in the face.’

“There is clearly a global realignment of the supply chain that’s going on,” he said. “The world is emphasizing certainty of supply over just cost of supply. And I think if you need to do things on scale, India does kind of get to be a very attractive destination. So the fact that India is a heavily digitised country, the fact that the size of the opportunity in absolute terms, particularly in electronics is so large, and the fact that we have tailwinds to support what we would like to do, I wou ..

However, he warned that the tailwinds he spoke of were likely to be there for a window of five years by which time, he said India needs to lay the foundations which have to be strong and allow the country to leapfrog in the space.

Source:https://bit.ly/3tMxsly