Shri Anand Mahindra: Chairman, Mahindra Group, Thank you Secretary Dharmendra and Ashok for those very generous introductions. And for once I'm very glad that none of my family members are here in attendance to offer you a second opinion about me. Honorable Minister, distinguished members of the government, the diplomatic core, ladies and gentlemen, I was a bit taken aback when secretary Kwatra called and asked me to deliver this lecture. And my first reaction of course was, why me? Wouldn't you want somebody who has substantial diplomatic experience, more foreign policy insight or more academic knowledge of international relations because I'm a businessman and businessmen frankly have never been seen as instruments of policy or allies in foreign policy creation. And I remember Vinay ji laughed and he said, well then at least give us credit for acknowledging the business community as a partner. So after that, I couldn't protest any further. So, thank you Secretary Kwatra for your faith in the business community. I'm proud and honored to be here. And it's a particular honor to have Minister Jaishankar here today.
I think it would be no exaggeration to say that during his ambassadorial career, Minister Jaishankar was one of the world's most effective diplomats. He's an unabashed champion of the country's interested interests and has not tolerated any bullying of India, while at the same time managing to build bridges, make friends and influence people. Thank you again for your presence, minister. And of course, I'm extremely honored that this lecture is a memorial to the late Shri Atal Bihari Vajpayee. Undoubtedly, he was one of our most distinguished Prime Ministers. But as the film said, he was that rarity in politics, a renaissance personality, and allow me to share just a couple of personal anecdotes, which to me revealed much about the man. I personally met Prime Minister Vajpayee many moons ago in 2003 when I was just appointed the President of the Confederation of Indian Industries. And in that capacity, I was given a personal audience with him at his official residence. And to break the ice, I mentioned my late father, Harish Mahindra, who he knew well. And I jokingly mentioned to him that some magazine had run a series called Separated at Birth, featuring juxtaposed photographs of prominent people who looked alike. And Mr. Vajpayee was featured in one of the articles and next to him as his lookalike was my late father. He was thoroughly amused. He chuckled loudly in his characteristic manner and he said, (shayad hum judwe bhai the jo kumbh ke mele main bichad gaye the). And that was his fame, sense of humor and charm on display.
Now, I then took the opportunity to ask Prime Minister Vajpayee for his advice to me as President of CII and how could business be of service to the nation? And he responded saying something I've never forgotten. He said that in spite of considerable progress, (humare desh main charo taraf garibi hai) and as long as we remained poor, we would never receive what he termed antarrashtriya samman, international respect. And he said therefore business had a vital role to play in increasing growth. But he said that business (ko aise projects main nivesh karna chahiye jinse rozgari bade, tabhi garibi par apka asar ho payega). Now interestingly Prime Minister Modi slogan of Sabka Saath Sabka Vikas clearly resonates very powerfully with that viewpoint.
And in addition, the goal of achieving international respect also resonates today. Because obtaining a seat at the global high table for India is a major priority for the Prime Minister and the Ministry of External Affairs as well. And if that is correct, then I think that gives me a very powerful cue to embark on the theme of my address this evening, which is that business and commerce can make a vital contribution towards our aspiration of earning international respect. So what is it? What is that thing or those things that create global influence or antarrashtriya samman? There's reams of scholarly literature on the subject, but Secretary Kwatra again told me that the last thing they were expecting from me was an academic dissertation. So please do not expect quotes from Max Weber or Hegel from me today. And I'm going to take a far more practical approach.
Let me look at the country, which for better or worse is regarded as the most powerful and influential nation in the world today, the United States of America. And I believe there are three self-evident pillars. Two America's global position of power, one world leading military might. Second unparalleled soft power and influence across the world. And three, a dominant role in the world economy which embraces the power of American businesses. So I ask, could this inspire a template for our own journey? Can we create a three-pronged approach that is uniquely Indian and will earn us antarrashtriya samman or international respect?
Now from his actions, it's clear that Prime Minister Modi has understood the importance of all three prongs and he's working feverishly on all fronts. Viksit Bharat founded on atmanirbharta is central to the prime minister's vision of a successful and prosperous India on the global stage. It's the key to ensuring that we as a nation get what Vajpayee ji called antarrashtriya samman and it is the need of the our given current global uncertainties as Ashok outlined. At an event last week, Prime Minister Modi recalled his vision for a developed India. And he said, I quote, the decade that we are in now is the most important decade of independent India so far. And this is the right time to strengthen the foundation of an efficient, capable, and developed India. So with that same spirit of urgency, let me come back to talking about those three sources of influence that I alluded to.
And as a businessman, I will dwell largely of course on the third prong, the economic power. But I do want to spend a bit of time emphasizing something that I think we do not sufficiently acknowledge today that without industry as an actor, the first two prongs, military and soft power would only be pale shadows of themselves. And let's take military power to begin with. The development of the military industrial complex in America was the pivotal factor in building the might of its armed forces. And of course there was substantial government funding and spending on military research for sparking innovation. But it was the formidable manufacturing capabilities of large American corporations like Lockheed, Northrop and general dynamics that provided the muscle and sinews of American military power. And I say that today, there is a huge opportunity for an Indian version of a military industrial partnership to emerge.
We welcome the lists of defense hardware that have been put out by the defense ministry and which ensure that certain products can only be sourced from Indian supplies. A step that speaks of confidence in Indian industry. And that's a promise we will fulfill. And the very nature of warfare, as we all know, is changing dramatically with mosquito like drones, taking out elephant time tanks. And with this emphasis on cutting edge technology, I hope to see a flood of innovation in the next few years, particularly from the IT sector. Innovative Indian companies are going to have a vital role to play. And India has one historical advantage that attracts companies like mine. It makes me very proud that in spite of having the fourth largest military budget in the world, independent India has never fought a major war of aggression. Even in international conflicts, we've always been part of the UN peacekeeping forces. And that tradition of using military might only for defense and deterrence, that's what earns us the moral high ground. That's the moral high ground combined with military strength, which earns us respect and which will continue to do so.
Now, what about the role of business in soft power? And if we look at the American playbook, again, their soft power dominates the world's mind space. Hollywood sells the American dream to the entire world. Gigantic corporations purvey American music to every corner of the globe. And of course, international students still flock to American universities. And interestingly, all these manifestations of soft power are privately funded and yet they have a disproportionate impact on America's prestige. Now, India too hasn't done badly when it comes to culture. Our films are enjoyed across the world in countries as far apart as Egypt and Japan. American college students formed Bhangra clubs. Indian music has influenced world music from Jazz to the Beatles. And going out for Indian is now a weekly mealtime call for many around the world. RRR, as we all know, was able to get the world dancing to its tune.
But I think we need to imagine things on a much larger scale. I mean, just look at the K-Wave that is sweeping the world, that small nation of South Korea has had an outsized impact on the world. And maybe we need to change gears to create our own eye wave. The superheroes of our epic and folktales are more than a match for the Marvel universe. But even superheroes need help. We need larger scale corporations in media which can digest the upfront financial risk required to turn this heritage into new IP and content. And very frankly, Reliance's recent acquisition of Disney India is a welcome step in that direction.
On the education front, alumni of Indian universities are running huge global corporations and yet our universities struggle when it comes to global rankings. And that's another area of opportunity for private players. Because we have top class technical education institutions. And under the Prime Minister, under Prime Minister Modi, the proliferation of new IITs, IIMs and AIIMS has been mind boggling. But if innovation is to flourish, we need the private sector to chip in and double or even triple that number. Private universities such as the Azim Premji University or Shiv Nadar University are stepping in. And I would like to say that our own Mahindra University has been set up with the dream that India's private universities would someday rival the best in the world, not just in the sciences, but in the arts as well. Autonomous institutions endowed, nurtured, and supported by the wealth of Indian corporations could make India a driving force of soft power. So in short, just as in America, private enterprise and soft power are made for each other.
And now down to business the third prong, let's talk about economic power and influence. How does business emulate the prowess and the scale and global dominance of American companies? And as I said, it's ironic that some of the most notable American transnationals and new age businesses are headed by CEOs of Indian origin, Satya Nadella, Revathi Advaithi, Sundar Pichai and the list goes on and on. But they are enabling the continuing dominance of US businesses, not the creation of Indian ones. And in order to gain global influence, very large Indian corporations or very innovative Indian corporations must find a seat at the high table. As Ashok referred to it in 2023, I was fortunate enough to be invited to a meeting at the White House called the Tech Handshake presided over by Prime Minister Modi and President Biden. Who were the people that President Biden seated quite literally at that high table? Tim Cook, Sundar Pichai, Satya Nadella, Sam Altman. And the projection of economic power was unmistakable. And what power was he projecting? It was not just the power of scale, also the power of innovation and disruption. Nobody knew Sam Altman till a few months before that meeting. Today, both of these are symbols of economic might.
And there's a story about how once President Nixon jokingly offered a world leader any of his generals in exchange for one of their star generals. And in response that head of state said, I would like general electric, general dynamics and general motors. Now this story itself may be apocryphal, but it underlines the fact that the success of business domestically and globally contributes to the respect the antarrashtriya samman with which a country is viewed. And what do we need to do to develop this kind of muscle? And you're probably expecting me at this point to launch into a long list of demands. But before we make demands of the government, we in industry need to take a long hard look at ourselves. I believe there are two important preconditions for Indian industry to get a seat at the global high table. And that has nothing to do with the government or anyone else they're about to do, they're about our mindset. There are two things we need to make it big, lofty aspirations and strong self-belief. And I claim that we were robbed by the shackles of our colonial past of both those attributes.
Now, I'm not here to indulge in a diatribe against the economic evils of colonialism or to hog back to the glories of pre-colonial India. I'm not here to calculate and catalog the depredations of the British Empire and how we were robbed. To my mind, the real cost of colonialism is what I called post-colonial subservience disorder, or to coin an acronym PCSD, the most prestigious legacy for them and but the most pernicious for us was the colonization of our minds, impeding us from believing that India could be the best. Now having studied film making, I think more in terms of imagery and storytelling to express a point. So please do indulge me as I go into some flashbacks and share some personal memories of PCSD.
I went to a high school in South India from where I gave the Indian school certificate examination in 1970. And yet until then, until 1970 at least all the examination papers saved for Indian languages were set in England and shipped to us from there, but they were placed in a very large iron safe and it was locked. It was placed on the stage in a very large hole. And at that point, the headmaster would come in, walk onto the stage, and with great gravitas, he would open the safe, he would take out the papers from there, which were set and sent to us from England, and he would then distribute them to all the nervous children in front. After the allotted time was up, our answer papers were collected. They were placed back in that safe for onward shipment to England for correction. And it's almost inconceivable to imagine that this was happening even 23 years after independence. Let me emphasize, my school was not a private school or run by missionaries. It had been taken over by the Indian government in '49 and came under the purview of the HRD Ministry. And that exam, the ISC was conducted in a similar manner in all Indian schools that offered the ISC. Please try to imagine the subliminal messages being transmitted to the young minds in that hall that we Indians were not competent enough to correct our own examination papers, let alone set them. And frankly, I was blissfully unaware of the insidious effect that scenario was probably having on my psyche. We were invisibly being robbed of self-belief, which is the foundation stone for the innovation that is so vital for the rise of a resilient and resurgent India.
Now, restoration of my self-belief for me came in an unexpected and equally impactful manner through another personal experience much later. Indulge me again please as I share that story. In 1987 when my younger daughter, I have two daughters, was 1-year-old and she had just begun walking, unfortunately, she grabbed a small glass vial of medicine lying on a low lying table and she fell while carrying it. And a small sliver of glass from that vial that broken vial, cut one of her fingers and severed a tendon. We were advised to rush her to London to an expert micro-surgeon. We did so. And after he had repaired it, her hand was placed in a cast to allow healing for a month. After a month of waiting with anxiety in London, when the cast was removed, we were horrified and so was the surgeon to find that the stink, the finger still would not bend and the surgery had been unsuccessful. So we were then advised to go to Paris to meet another micro-surgeon called Dr. Glishen Stein (ph). And when we entered his clinic, he examined her, looked at us and said, why haven't you consulted Dr. Joshi? And I said, I'm sorry, excuse me. Who's that? And he said, he's one of the finest hand surgeons in the world. He's Indian and he has much more experience than all of us, sadly, because of the number of people who suffer hand injuries in your country. He then gave me Dr. Joshi's address. It was in wordily Mumbai, barely 10 minutes away from my office. We returned to India, consulted Dr. Joshi. The very next day, he took my daughter once again into surgery. And he explained to me that the key was not the microsurgery procedure itself, it was the recovery process that was complex because the very same scar tissue that helps to heal a tendon potentially blocks the flexibility and free movement of the finger. So the trick lay in retaining the flexibility of the finger even while the scar tissue was forming and the simplicity of the solution that he deployed frankly was breathtaking. After the surgery, he stitched into my daughter's tiny fingernail, a simple metal eye hook of the kind you'll find in a blouse. He then wrapped a bandage around the same wrist and into that bandage, he sewed another eye hook placed in the opposing position to the first one. He then merely attached an ordinary elastic band. He strapped it between those two hooks. They were anchored to the two hooks. And that simple device during healing allowed some movement of the finger, but not enough that it would prevent healing by the scar tissue. Total cost of that device, two rupees. Miraculously it worked. A decade later, my daughter was playing the piano with the same hand and the same finger.
I have told and retold this story because it taught me one powerful lesson. Always, always look for solutions in your own backyard before you think the best solution lies overseas. And how did this affect me and my career? Well, I'm certain there after that, when it came to making big decisions and big bets in business that were based on homegrown technology, I never again lacked the courage to do so. For example, many people have asked me, how come I made such an enormous bet at risk to my career by pushing for the indigenous development of the Scorpio SUV in the late 1990s when we started? Why did I make that bet despite the cost that we were going to incur being higher than any Cap Ex the company had spent until then, despite our never having designed or built a vehicle by ourselves until then? Well, I'll tell you, I know that the humble Dr. Joshi had something to do with my willingness to make that bet because my mindset had changed.
Let me now move on to the second assault of colonialism on our psyche, which was on our aspirations. We were fed the story that we were second grade. And as a result, even today, much of Indian business tends to stick to the safety of the shore. Prime Minister Modi fully understands this. When I met him almost two years ago, to introduce him to Dr. Anish Sha, our group CEO. Anish asked the Prime Minister what advice he would give to him as a newly minted CEO. And the PM was extraordinarily frank in his response, he put it simply, he said, Indian industry is not ambitious enough. We aren't daring to think at a global scale. And he said, for example, given the scale of construction projects being implemented across this nation, why isn't an Indian construction company amongst the largest in the world, why isn't an Indian accounting firm one of the big four, even though the big four are full of Indian talent? And looking clearly at us, he said, why aren't Indian auto firms targeting to be amongst the top five globally? Why not indeed? His words were undoubtedly accurate. How many of us in business truly think about global leadership when we launch new ventures or when we formulate plans for existing businesses? To be honest, only a handful of companies, notable companies have shown the gumption to take on world scale projects. We need many more to find that path and to follow their lead.
The private sector is lagging when it comes to risk and investment. We spoke about this Ashok just before coming here. Our recent growth has been disproportionately fueled by government investment. But as the Finance Secretary recently said, and I quote, there are limits to the government's ability to keep expanding capital expenditure investment. It cannot be a continuous substitute for the private sector. So what is the reason for the weariness of the private sector? And I'm not sure it's a resource problem. I think it's a problem again, of mindset, of risk aversion, of lowered aspirations. PCSD, post-colonial subservience disorder shackles us with invisible handcuffs that we don't even realize are there. It shakes our self-belief. It waters down our aspirations and it business, it makes us risk averse, sticking to the tried and true rather than blazing new paths. It makes us fear failure. It makes us settle for jugaad when we are capable of Jhakaas. Jhakaas is a Maharashtrian colloquial word, which means wow. For too long have we carried this imputed sense of inferiority? It's time to change. And the good news is that there are some green shoots which are beginning to sprout. There are increasing large scale investments in sunrise industries such as semiconductors and batteries. And I hope that this is the beginning of a strong investment cycle. I have no doubt that we have the capability to harness our innovative capabilities to build truly transnational corporations and take our place at that global high table. All we have to lose is our shackles.
However, I do want to emphasize one point. If we only play a catch up game on scale and innovation, it would take far too long to earn genuine respect. Can we use a secret weapon? And I think we in Indian business do possess a Brahmastra a secret weapon that few other countries have. And that Brahmastra is the power of purpose. The central idea of being a purpose-driven business is that we can, we must in fact do well and do good at the same time. And of course, profits are important, but how we make those profits is equally important. And I believe the only sustainable way to do business today is to make profits in such a way that positively impacts the life of the people you serve. If not, they're going to vote with their wallets. And this is particularly so after 2008 where events like the Occupy Wall Street movement underlined the negative role that businesses can play and created an enormous trust deficit between business and society at large. So people today are looking for companies that look beyond profits that use profits to integrate themselves into the fabric of society. The West today is discovering the power of purpose, but to be honest, it's an idea that many Indian businesses have had since inception. The power of purpose drove the creation of so many businesses at the dawn of independence and thereafter. And we all share a dream of working to transform India into a prosperous nation and to drive positive societal change while doing so.
Our own group is a case in point. The first ever advertisement that was issued as far back as 8th November, 1945 did not talk about products or services done by our group. It talked about the ideas with which the company had been founded. And I'm quoting an extract from the ad that declared that this company and I quote, is a cooperative effort to secure for India that industrial development so indispensable to the full realization of her dreams. We were born with a purpose to help India fulfill her dreams of industrial development. And it's my experience that working in a tour purpose is not some soft fuzzy kind of stuff. In my 40 years of being a hardheaded businessman, I've learned that it's not bar charts and profit projections that lead to performance. It's engaging the hearts and minds of young people believing that one's work is part of a larger purpose and that it makes a difference. And this is a tool that works globally.
I recently addressed a group of our tractor dealers in New Orleans, America, and these were small business people from largely rural backgrounds whose businesses were on a downturn and they were struggling to recover. With all those difficulties, one would've expected them to be skeptical, if not outright dismissive when I talked about the power of purpose, namely about the Mahindra rise philosophy with believes we can rise only by enabling others to rise. Far from being cynical, those tractor dealers, they enthusiastically embrace the idea, the idea that their work was important, that it counted, provided light to them in their surrounding gloom. And today, companies all around the world are chanting the mantra of purpose, purpose, purpose. And I say this could be our opportunity to leapfrog to leadership and to earn respect for India in the economic sphere by championing the idea that India does business with a purpose and more important with a heart.
Now this viewpoint is not just some fanciful notion I've conjured up in my head. Serendipitously an article published just two days ago by the Japanese media group, Nikkei Asia propels a theory around how India's entrepreneurs are driven by higher order goals. And the article says, I quote, the Indian entrepreneurial landscape is characterized by a strong focus on inclusivity. As India rises up the ranks of the world's largest economies, Indian businesses have a unique opportunity to transcend the narrative of economic growth and become catalysts for a transformation with a deeper significance. Indian business could be an agent for positive change for society and the environment as a whole. So I rest my case. Finally, and I said I would come to this. What do we need from the government to capitalize on all these advantage just by having me here minister, secretaries, I believe that you have underscored the importance of a strong partnership between government and business. And I'd like to drive home how fruitful that partnership can be and how we can make it an enduring one. I'm advocating for a government partnership with Indian companies in three major areas, scale, innovation and global reach.
Korea and Japan help their companies to build scale through industrial policy and protectionism until their companies reach scale to go global. That is not a path India chose and I'm glad we didn't. But we do need nurturing and incentivization for scale, not through protectionism, but support for a limited time horizon. And the PLI schemes, the productivity linked incentive schemes are on the right path providing a runway for businesses to foray into new sectors and industries. Now there have been some questions about the scheme, but learning's and tweaks are welcome. I just say, let us not throw out the baby with the bath water. I say unequivocally that the PLI scheme has given us the courage to build capacity. And I'd argue it's a very powerful instrument of partnerships. Schemes can't last forever and that's a good thing. But can we spread it wider? Can we spread the reach of PLI schemes to cover larger sections of industry? We also need government support to tackle the root causes that affect our competitiveness. Our manufacturing costs are unnecessarily high. Land costs, utility costs, logistics costs, all of these contribute to our lack of competitiveness. I appreciate that measures are being taken. In fact, ports are showing the way. I understand that Indian ports now have an efficiency close to the best in the world. Gati Shakti is another great beginning, but logistics is such a major part of our cost structures that (yeh dil maange more). More focus on improving cost structures. More advances on the ports model will have a multiplier effect on industry.
Next, when it comes to innovation, the government's initiatives and setting up the India stack and the NPCIs payment rails are game changers. And they've already provided industry with efficiencies that deliver tangible value, more innovations like these, for example, in real estate regulations, judicial reform could release even more value. Another area to exploit is the natural porosity between government funded research and its impact on industry and civil society down the line. The internet, after all was a US government funded project at the time of its conception, today it lodges in every home. Similarly, LEDs, microchips and many more ideas were first funded by the US government. Our institutions of higher learning and research could do with much more government funding to generate such seminal innovations that can eventually be commercialized. But India spends a much lower share of its GDP, less than 1% on R&D compare this to the US and China, which spend more than 2%. So this needs to be boosted.
I also spoke to several startups about what their issues were and almost all of them mentioned that they were literally lost in the maze of existing regulations and controls that are applied to them. Sometimes even retrospectively. I know that government is working on increased ease of business for investors. How about making life simpler for our innovators who are pioneers and potential unicorns? We need regulators to work as partners and proponents rather than being seen as task masters. We need to encourage astronomical amounts of innovation for a re-surge in India. And the less obstacles there are in the way, the better.
My third ask is support on global reach. Scale and global reach go together like the proverbial horse and carriage. Once scale is unlocked, it needs global reach to be fully leveraged. Made in India must become a globally recognizable brand. And this calls for more marketing, more trade shows, more participation in global meets to showcase made in India to the world. In a nutshell, bigger budgets and effective pitching. Another way of extending global reach is through international aid tied to Indian industry. We extend substantial aid to developing countries. But if this could be tied to purchasing from Indian manufacturers, it could help open doors for Indian companies and otherwise closed markets.
In fact, why not make business an instrument of foreign policy? There is great potential for closer alignment with Indian industries that are ahead of the curve. For example, India is seeking poll position on climate change, particularly after last year's G20 meetings. The private sector has led the way in developing many innovative measures. Can we partner with government to invest in climate technology across the world, particularly in developing nations? Can we have a shared vision of Indian solar farms across the globe? Industry government partnership is at its root, a matter of mindset. And as I said earlier, the very fact that you invited a businessman here today is indicative of an open and flexible approach to partnership. May it be a game changer and long made endure.
Let me close by confessing something. I told the story of my school, but I didn't share the ending of that story. I saved the best for last. The story of Indian examination answer papers being sent to England for correction. And I first told that story to an audience of Indian entrepreneurs in Silicon Valley over a decade ago. And very coincidentally in the audience was a schoolmate of mine, someone from the same batch who had given the same exam at the same time. Six months later, he mailed me jubilantly, mailed me a news article from a UK newspaper. And in that article it was announced that the AQA, which is an autonomous body that sets and assesses over 50% of school leaving answer papers in England, was now outsourcing the correction of those answer papers to India. The tables indeed had turned. Ladies and gentlemen, it appears that today all roads lead to India.